Operator:

Greetings, and welcome to Ameren Corporation's Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations and Corporate Modeling for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons :

Thanks, Andrew. Good morning, everyone. We're pleased to have you joining us today as we cover our second quarter 2024 earnings results and recent developments across our business segments. Overall, it was a very productive and positive quarter. As always, our dedicated and experienced management team remained laser focused on executing our strategic plan, positioning us well to take advantage of future opportunities to drive significant value for our customers and shareholders. Speaking of opportunities, I'm tremendously excited about the investment opportunities ahead for us in this dynamic period for the utility industry. In my 20 plus years with the company, our economic development and sales growth pipeline is the most robust I have seen, which I'll touch on more in a moment. First, let me cover our earnings and operations results for the second quarter. Yesterday, we announced second quarter 2024 earnings of $0.97 per share compared to earnings of $0.90 per share in the second quarter of 2023. Key drivers of these strong results are highlighted on this page. And for the six months of the year, our results have been solid, driven by infrastructure investments made for the benefit of our customers, encouraging weather normalized retail sales and disciplined cost control. We remain on track to deliver earnings within our guidance range of $4.52 per share $4.72 per share. Turning to Page 5, our strategic plan is designed to deliver on our steadfast commitment to providing safe and reliable energy in a sustainable manner. We do this by investing in rate regulated infrastructure, enhancing regulatory frameworks, and advocating for responsible energy policies, while optimizing operating performance through ongoing continuous improvement in order to keep rates affordable. I'd like to express appreciation for my Ameren coworkers unwavering commitment to our strategy. On Page 6, we highlight our key accomplishments in the second quarter as we execute our strategy to deliver on our 2024 objectives. The strategic infrastructure investments we have made in the first six months of the year are designed to maintain the safety and reliability of the energy grid, to modernize the grid, and to harden against more frequent severe weather events. Over Memorial Day weekend, severe thunderstorms swept through Missouri and Illinois, bringing strong winds, flooding, and golf ball sized hail. As always, our teams quickly and safely assessed the damage, cleared trees, and worked long hours to make repairs to restore power as quickly as possible, allowing critical infrastructure to continue operations, businesses to remain open, and homes to stay cool and safe. But even better, during the first half of 2024, over 22,000 Missouri and 11,000 Illinois customer outages were prevented during storms due to rapid detection, rerouting and restoration of power by automated switches across our system and over 6.4 million minutes of customer outages across both states were avoided due to investments to modernize the grid. As we look ahead to future investment for the benefit of our customers, it's important to operate under constructive regulatory jurisdiction and legislative policies. This quarter, we've made significant regulatory advancements, which Michael and I will cover in more depth on the coming slides. At Ameren Missouri, our largest business segment, we continue to make regulatory progress with the Missouri Public Service Commission for new solar and natural gas generation, which supports our integrated resource plan. Our Cass County solar project was approved in June and is expected to be one of three solar projects placed in service this year, which collectively, along with Huck Finn and Boomtown, represent an investment of approximately $1 billion. The Commission also approved a constructive order for the securitization of costs associated with our Rush Island Energy Center in connection with its retirement in October of this year. And finally regarding generation updates, in June, we filed the CCN with the Missouri PSC for our dispatchable Castle Bluff Energy Center. Overall, we continue to make significant progress on our smart energy plan in Missouri, a combination of distribution, transmission and generation projects to bolster reliability and empower our customers. In late-June, Ameren Missouri filed its electric rate review request with the commission, which is substantially driven by infrastructure improvements made under this plan. If approved, Ameren Missouri customer rates would still remain well below national and Midwest averages. Turning to transmission, the Midcontinent Independent System Operator or MISO's long range transmission plan continues to evolve. In April, MISO concluded the bid evaluation process for the Tranche 1 competitive projects in our service territory, ultimately awarding all three competitive projects to Ameren. And they continue to develop the $23 billion to $27 billion Tranche 2.1 project portfolio, which promises meaningful brownfield and greenfield investment opportunities within our service territory. Finally, in Illinois, the Illinois Commerce Commission issued an order on the rehearing of Ameren Illinois' multi-year rate plan for 2024 through 2027. Importantly, the order supports our planned base level of grid reliability investment that is reflected in our 2024 earnings guidance. Further, the ICC order reflects 94% of the rate base in our ongoing multiyear rate plan proceeding. We look forward to an ICC decision on the multiyear grid investment and rate plans by the end of this year. In addition to these significant regulatory advancements, we have seen strong operational performance across the business with a focus on delivering safe, reliable, affordable energy service through enhanced automation, optimization, and standardization, which Michael will cover in more detail. Moving now to Page 7 for an update on our expanding customer growth opportunities. On the first quarter call, we touched on economic development opportunities in our service territory. Since then, collectively across Ameren Missouri and Illinois, we have seen a significant increase in the number of data center inquiries and formal engineering reviews underway, which combined would represent thousands of megawatts of additional demand. Our teams along with a variety of state and local stakeholders are working aggressively to attract these and manufacturing and other economic development opportunities to our service territories. Of course, Ameren has a strong track record of reliable infrastructure development and we have the people, resources, expertise and partnerships needed to go after these opportunities. Further, our Missouri and Illinois territories offer an attractive value proposition for commercial and industrial customers. This includes sites with transmission, fiber and water access coupled with competitive rates and tax incentives. In Missouri, we also have reliable generation with a growing portfolio of clean and dispatchable assets and the ability to expand in order to serve these economic development opportunities. So far this year, a construction agreement has been executed for a 250 megawatt data center, which would represent an approximate 40% and 5% annualized increase to Ameren Missouri's industrial megawatt hour sales and total megawatt hour sales respectively upon completion and full ramp up. Our construction to extend transmission and distribution services to support this data center is expected to be completed in December of 2025 with the customer ramping up operations from 2026 through 2028. In addition, we've received expansion commitments or executed new contracts for over 85 megawatts of additional load for manufacturing, smaller data centers and other industries across both states. We would expect these new and expanding customers to be fully ramped up by 2028 with sufficient generation to serve them, creating value for all customers over time. We're excited about these opportunities, which will bring jobs and additional tax base to benefit our state and local communities. Importantly, the new data center and other customer commitments were not reflected in the weather normalized sales expectations included in our five year earnings per share growth guidance issued in February. Of course, the ultimate net impact of any incremental load will be dependent upon a variety of factors, including customer ramp up time, additional generation investment needs, timing of rate reviews and tariff structures. To that end, we currently expect to update our Ameren Missouri Integrated Resource Plan or IRP by February 2025 following a careful evaluation of potential load growth and our planned generation portfolio. And we will work with all stakeholders to bring the economic benefits of these customer expansion opportunities to all customers, our communities, and shareholders. Turning to Page 8. We continue to execute our Missouri IRP, which focuses on maintaining and building a diverse generation portfolio to ensure a reliable, low cost and cleaner mix of energy resources to serve our customer needs. We had two key developments this quarter. First, in June, the Missouri PSC approved the CCN for the 150 megawatt Cass County solar facility, which is expected to begin serving customers in the fourth quarter of this year. This facility will serve business customers who subscribe through our Renewable Energy Solutions program to receive all or part of their energy needs from renewables. The Missouri PSC approval followed a successful auction held in May, where customers across Missouri signed up to take part in the Renewable Energy Solutions program expansion. Demand remains strong for programs that bring businesses readymade solutions to help them reach their sustainability goals. Second, in June, we also filed a CCN with the Missouri PSC for our Castle Bluff Energy Center, an on demand 800 megawatt natural gas simple cycle facility to serve as a reliable backup source of energy ready to operate on the most extreme winter nights and summer days. Castle Bluff, subject to commission approval, represents an approximately $900 million investment and is expected to be in service by the end of 2027. Moving now to Page 9 for an update on the MISO long range transmission projects. MISO and its transmission owners continue to engage in economic analysis of the Tranche 2 proposed set of projects. In June, an initial set of Tranche 2 projects now referred to as Tranche 2.1 were proposed with a cost estimate of $23 billion to $27 billion. The portfolio identifies a need for a mix of brownfield and greenfield transmission lines of varying voltage levels and new or improved substations in both our Missouri and Illinois service territories. Ultimately, we won 100% of the Tranche 1 projects in our service territories, reflecting our ability to deliver timely, cost effective, high value projects to our communities. We expect we'll be able to compete for Tranche 2 greenfield projects in a similarly competitive manner to better serve our customers. MISO expects to approve the Tranche 2.1 projects by the end of the year. Once approved, MISO plans to propose a second set of Tranche 2 projects or Tranche 2.2 in 2025 to address further transmission needs in the North and Midwest regions. Turning to Page 10, looking ahead over the next decade, we have a robust pipeline of investment opportunities of well over $55 billion that will deliver significant value to our stakeholders and create thousands of jobs for our local economies. In addition, we see several tailwinds forming across our business segments. Specifically, we are seeing significant sales growth potential, which I discussed a few moments ago, and this may require us to reassess our Ameren Missouri IRP and further expand our generation investment pipeline. We're seeing a growing focus amongst Missouri stakeholders on generation planning and reliability, and we see a strong need to embrace enhanced reliability focused policies in legislative sessions to come. Further, MISO's analysis of transmission needs in the Midwest region will likely identify additional opportunities to improve the ability to move electricity across the region. Maintaining constructive energy policies that support robust investment in energy infrastructure and to maintain reliability while transitioning to a cleaner energy future in a responsible fashion will be critical to meeting our country's growing energy needs and delivering on our customers' expectations. Moving to Page 11, in February, we updated our 5-year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2024 through 2028. This earnings growth is primarily driven by strong compound annual rate base growth of 8.2%, supported by strategic allocation of infrastructure investment to each of our business segments based on their regulatory frameworks. Investment in Ameren presents an attractive opportunity for those seeking a high quality utility growth story. Combined, our strong long term 6% to 8% earnings growth plan and an attractive and growing dividend, which today yields 3.4% result in a compelling total return story. We have a strong track record of execution, a strong balance sheet, and an experienced management team. I'm confident in our ability execute our investment plans and strategies across all four of our business segments. Again, thank you all for joining us today and I'll now turn the call over to Michael.

Operator:

We'll now conduct a question-and-answer session. [Operator Instructions]. Our first question is from Shar Pourreza with Guggenheim Partners.

Marty Lyons:

Yes. Thanks, Shar. We posted a slide in the appendix, Slide 27. The just provides to be listening a little bit of background in the case. But we were pleased that the judge ordered mediation, which hopefully will lead to some constructive settlement negotiations between the parties. We expect the mediation to take place this summer in the event that mediation isn't successful in reaching a settlement between the party. We would expect that the judge would likely have evidence year hearings in September, and we'd still get a resolution of the case this year. So I don't think any read through on exactly where we'll end up between -- in that bid-ask spread, but nonetheless, we think, a positive step forward.

Marty Lyons:

Yes, Shar. All good questions. So when you look at Tranche 2.1 and you look at the map that we provided on Page 9, you see a breakdown between the 765 kV lines and the 345 kV lines, and you see some of those in Missouri and Illinois. We're pretty excited about the way this is shaping up overall. With respect to the red lines, we see those as being more likely brownfield the green dotted lines more likely greenfield. And so you see a mix of those things there. At this point, no specific cost estimates for those lines that run in our service territory. The $23 billion to $27 billion numbers we give overall or MISOs estimates for the total portfolio, but I can't give you a breakdown right now on those that are in our footprint. And of course, if the brownfield, we would expect them to be allocated to us. If the greenfield, we would expect to compete for those. And we were very pleased with our ability to compete for the Tranche 1 projects. As we noted on our -- in our prepared remarks, really winning all three that were in our service territory. And Shar, at the end of the day, we think it speaks to our ability to deliver these projects in a timely way in a cost-effective way. Again, we feel like we are good at constructing these and great at operating them. And we've done a great job partnering with munis, co-ops, contractors and others to make sure we can deliver. Now with respect to the time line on the Tranche 1 projects, we really expect the construction of those to extend from 2026 to 2030. I think we have about $1.6 billion or so in our 5-year plan for those Tranche 1 projects. And then with respect to the Tranche 2.1 projects, I think largely that spend is probably outside of our 5-year plan. However, there's really no reason that these have to happen sequentially to the extent that any of these Tranche 2.1 projects can be started and overlap with some of the work on Tranche 1. No problem there. And again, excited about this Tranche 2.1, but also expect in Tranche 2.2 that we'll see even more projects in our Missouri and Illinois footprint. And so overall, again, just very pleased with the work MISO is doing here and the responsiveness to stakeholders in the process.

Nick Campanella:

So I just wanted to ask on the data center construction slide. It just seems that you're really only kind of focusing on things where third is turning but you have -- looks like gigawatts of opportunity. The Missouri system seems to have capacity to supplement this 85-plus megawatts, if I'm right. But what do you think the tipping point is to really accelerate procurements in this next IRP? And I guess how many more megawatts do you think you'll have realistically kind of have clarity on by the time you get to that fine line?

Michael Moehn:

Nick, this is Michael here. I might just add. That's a great update from Marty and just from an overall macro perspective, I mean, I think the backdrop in the St. Louis region is positive though, even putting aside this data center opportunity. I think we noted this in the slide, year-to-date sales residential up 2.5%, commercial 1.6%, industrial 3.1%. So a little bit over 2% year-to-date, which is a mark change where we've been in the past. And so there are some really positive things happening about 25,000 jobs created in the past year in the St. Louis region. One of the kind of hotter job markets here, unemployment rates running below the national average. So all of those things, I think, bode well with respect to all the things that Marty talked about as well.

Marty Lyons:

Yes. Yes, Nick. I'd tell you that was a great question/statement. I think you got it right. If you look back at our track record over the past 10-plus years, we've been growing EPS at north of 7%. And that's our goal, which is to deliver at or above the midpoint of our earnings per share growth range. And as I sit here today versus where we were 6 months ago, I agree with you that there are a number of tailwinds that have been forming. Inflation has been interest rates have been moderating. Stock price has been improving. You're all right on all those things. Our demand outlook has been improving with data centers and other. Michael just talked about some of the job growth that we're seeing in the Greater St. Louis region. We're really excited about these transmission investment prospects we have with Tranche 1, Tranche 2.1, Tranche 2.2, all very exciting. We still have a tremendous amount of investment needed for grid modernization and the clean energy transition and we've got a really strong balance sheet to be able to get it done. So very excited about those prospects and again, when we look back just in terms of what our team was able to accomplish in the second quarter, I'm very proud of that overall. We continue to make great investments for the benefit of our customers. And on Page 6, we'll set out a half dozen things that we completed during the second quarter that really position us for success in the years ahead. And I have to say this was all accomplished by a team that is also, at the same time, really focused on customer affordability. We put a lot of cost savings initiatives in place this year and the team overcame that and delivered a really strong quarter from an operations and earnings standpoint. And again, I think you're right, we're set up very well for the future given some of the tailwinds we have.

Jeremy Tonet:

Just wanted to pick up -- I guess, start with the Chevron doctrine here. In recent changes, does that impact your thought process going forward? Or any thoughts you could share there?

Jeremy Tonet:

Got it. This is Jeremy. But Nick a friend, so we're all good here. But maybe to follow up on the -- just as far as that -- it just seems like a vast opportunity set with the multiple gigs you're talking about and how you think about, I guess, conversion rate there. It still seems like a sizable opportunity. But just wondering, there talks about double counting out there. So just wondering how you, I guess, think about that whole process.

Jeremy Tonet:

Got it. That's helpful there. Maybe just picking up real quick with stakeholders in the state, our conversations with stakeholders in Missouri seem to indicate a view of constructive commentary, I guess, coming out of the commission there, and we've seen some kind of changes over time with the composition. I'm just wondering, any updated thoughts you could share on Missouri. Any changes you see there?

Operator:

Our next question is from Carly Davenport with Goldman Sachs.

Marty Lyons:

Yes. Carly, it's a good question. And look, it's -- something we file in February, a lot of work to be done, as I mentioned, really trying to assess the load growth, get our arms around, what of this will come to fruition, how do we want to serve it. I think when you look at the IRP that we filed back in September 2023, it was a good mix of resources, maintaining our existing dispatchable assets thinking about bringing in a mix of renewables, dispatchable resources like simple cycle gas combined cycle gas as well as battery storage technologies. And my sense is that if we see load growth that we're going to build into our plans going forward, it probably means in the short-term, an acceleration of some of the renewables, the batteries and very possibly additional simple cycle natural gas. When you look longer term, we will have to give some thought as we file that, and to your point about how we think about the EPA's proposed greenhouse gas rules. And that may be impacted by whether the Supreme Court issues the stay of those later this year. But again, I would just say the things we have to think about, as I mentioned on one of our prior calls is the implications of those rules for carbon capture at our planned combined cycle facility as well as co-firing with gas at our Labadie Energy Center. And so those are some of the things we'll be thinking about. And given the uncertainty of whether that greenhouse gas rule will ultimately come into effect, we'll have to think about how we do or don't reflect that in our plans going forward. So a lot to think about. So I appreciate you teeing it up. I don't have any firm answer for you today, but those are some of the considerations.

Carly Davenport:

Got it. Okay. That context is super helpful, and we'll stay tuned there. The follow-up is just on MISO Tranche 2. I know you guys addressed kind of Tranche 2.1 a bit earlier. But could you talk a little bit about 2.2 kind of how that split of the tranches came about. And ultimately, if you have any views on what that could look like from a sizing perspective relative to Tranche 2.1 and also Tranche 1.

Operator:

Our next question is from Paul Patterson with Glenrock Associates.

Michael Moehn:

Paul, this is Michael. From a year-to-date standpoint, again, residential is up 2.5%, 1.6% on the commercial side and 3.1% on the industrial side. So about 2.2% overall. With EMEA impact, I mean, it is a little bit less than that. I don't have it right here in front of me. But overall, I mean, look, it's just -- it's been much stronger than it has historically been.

Michael Moehn:

Well, I mean, there certainly is some impact from an energy efficiency standpoint. Although I think it's less than that. I mean the one thing that you're not seeing in here a little bit is a bit of price variance. So as you're switching kind of from between summer and when at rates, you get some different price variances in the block sales. And so when you strip that out, that's masking a little bit of the growth there and that will -- should like it typically does will flip around as you kind of move through time. So -- but I mean, EE does have an impact.

Paul Patterson:

Okay. Sorry about that. Okay. And then with respect to your low forecast and the IRP that's going to be refreshed. I was wondering can you give us maybe just a little bit of a sense as to it sounds obviously like you've got a lot of positive things happening here. What kind of maybe range we might be looking at in terms of when the IRP -- when it's refreshed like how much it might go up?

Marty Lyons:

Yes. And I think, Paul, following up on Michael's comment there, I mean, we have the ability to serve that data center today with our existing mix of resources and the planned additions that we've got. So as we set up that IRP update, it's really about thinking about those thousands of megawatts that are in the queue today, looking -- doing its engineering studies, interconnection studies and really working with them and giving more thought to what if that's going to come to fruition? And what changes to the IRP might need to be made in light of those?

Marty Lyons:

Yes. Well, the customers that are signing on today, the 250 megawatts as well as the 85-plus megawatts are really utilizing existing tariffs that we have in place today that obviously have been vetted by the commission and put in place. And the goal of any of these tariffs is to make sure that costs are allocated appropriately and spread appropriately amongst customer classes. I think sit here today, I think we're fine. As we move through time, if we have thousands of megawatts that come to fruition, and we start to think about the different resources we may need to put in place to serve them. We're going to have to be thoughtful about what the appropriate tariffs are for those customers to make sure that they pay a fair price and that value again, accrues to all of our customers and communities.

Anthony Crowdell:

Just one quick one, kind of like a follow-up and maybe challenging to answer. I mean if I think back to -- and I know you guys don't have the exposure to the PJM capacity auction, but if I think back 10, 15 years ago, where we started to see some real bullish prices on capacity, I think the utilities kind of in that part of the country really responded with higher CapEx and the regulators really supported it. If we fast forward maybe last December, Illinois really, I think, tend to message or maybe slow down the CapEx spend in the state. I know you're not exposed to PJM capacity prices, but do you think the Illinois regulators maybe change their view and maybe realize the value of the added infrastructure maybe to help our customer build as more way to get power to them?

Operator:

Our next question is from David Paz with Wolfe Research.

Michael Moehn:

Yes. We have historically, David. For every 1% on the industrial side, it's about $0.05 here's a good way to think about it. Now that change will change over time as you kind of move through and you got to change the generation mix, et cetera. But I mean, I think it's probably a decent rule of thumb today.

Marty Lyons:

Yes. I think David, all things for consideration. As I mentioned a few moments ago, with respect to the data center that we show on Page 7, this 250-megawatt data center and the other 85 megawatts of load, again, they're able to use our current industrial tariffs, and we're able to serve them with our current generation and plan generation. So no need for any special tariff there. Over time, as I said, to the extent that these other opportunities come to fruition, we may need to think about special tariffs. One thing to point to is we just had that Cass County Solar project approved. And there, we did put a special sort of tariff arrangement into place to ensure that there was a -- an appropriate apportionment of cost between our customer base as well as those industrial customers that are going to take power from Cass County. So we do have some experience working with the commission to put special tariffs in place. And we'll be giving thought to that as we move forward with additional data centers that we may be able to serve. And then to your point on -- I think it was on PSA, Certainly, one of the things we pursued legislatively last spring that had very good support was the extension of PSA to dispatchable generation. Such as the simple cycle assets that we're planning and combined cycle asset that we're planning. And so again, we had very good support for that. Again, the legislative session ended with that not getting across the finish line, but certainly expect that strong support as we go into next year.

Julien Dumoulin-Smith:

Just following up on this, right? So just on the process behind the -- shall we say, shorter-term procurement potential here, right? You alluded to it earlier, obviously, you have enough resources to deal with the 250 here initially. Perhaps that's not it, as you alluded to -- how do you think about the process itself, right? You do typically these IRPs at relatively consistent periods interims as well as there's a construction cycle behind that. There's a PSC process behind that you mentioned kind of the shorter-term potential in the medium-term potential need. How do you think about expediting that? We've seen that potentially in some of your adjacent jurisdictions? How do you think about that, A; and then, B, going back to the point raised, would you expect some of these tariff dynamics just play out in the, like, should we say, a subsequent rate case process beyond the current instance?

Julien Dumoulin-Smith:

Okay. Even outside of the rare review, nice. It sounds like you got something in mind already. All right. And then separately quickly, just coal ash new rigs here in the last few months. I'm just curious on AROs accumulating and just the thoughts about some of the twist here.

Operator:

There are no further questions at this time. I'd like to hand the floor back over to Marty Lyons for any closing comments.

Operator:

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation’s First Quarter 2024 Earnings Call. At this time, all participants are on a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations and Corporate Modeling for Ameren Corporation. Thank you, Mr. Kirk, you may begin.

Marty Lyons:

Thank you, Andrew. Good morning, everyone, and thank you for joining us today as we discuss our first quarter 2024 earnings results. Our team continues to successfully execute on our strategic plan across all of our business segments, allowing us to deliver for our customers, shareholders and the environment, while laying a strong foundation for the future. Turning now to Page 5. Yesterday, we announced first quarter 2024 earnings of $0.98 per share compared to earnings of $1 per share in the first quarter of 2023. The key drivers of our first quarter results are outlined on this slide. Overall, our operating performance was strong during the quarter. We had periods of extreme cold weather in January and our natural gas and electric systems and our operating teams performed well. On balance, however, weather was mild during the quarter, marked by unseasonably warm temperatures in February and March. Despite the mild temperatures, our retail sales grew driven by encouraging signs of customer growth and usage. While we experienced higher operations and maintenance expenses, that was driven largely by a charge for proposed additional mitigation relief related to the Rush Island Energy Center New Source Review litigation. Despite the year-to-date weather headwinds and the Rush Island charge, our team is taking steps to contain spend, and we remain on track to deliver within our 2024 earnings guidance range of $4.52 per share to $4.72 per share. I’ll provide an update on our Rush Island Energy Center proceedings, and Michael will cover the first quarter and balance of the year earnings results in a bit more detail later. Moving to Page 6. On our call in February, I highlighted some of our top priorities for 2024 as we invest strategically, enhance our operating jurisdictions and optimize our business processes. Our team’s unwavering commitment to these objectives has already begun to produce results, as you can see on Page 7. Our investments continue to improve the reliability, resiliency, safety and efficiency of our service to our customers. In the first three months of this year, we have invested significant capital for the benefit of our customers. During the quarter, Ameren Missouri installed over 55,000 smart meters, 60 smart switches, 15 miles of energized underground cable, 8 miles of hardened overhead lines and upgraded 5 substations. In Illinois, our first quarter investments included replacing 550 poles due to standard inspections and storm damage, replacing switchgear at a key substation and installing 30 miles of underground cable for relocations, new customers and aged cable replacement. Further, our transmission business is on track to complete over 15 new or upgraded transmission substations and 45 miles of new or upgraded transmission lines in the first half of the year. These critical investments support our commitment to delivering safe and reliable energy for the benefit of our customers and we are seeing the benefit in 2024 in terms of reduced outages and shorter outage durations as a result of spring storms. For example, during the recent April storm, over 7,500 Missouri customer outages were prevented due to rapid detection, rerouting and restoration of power by automated switches across our system in over 2.3 million minutes of customer outages were avoided due to these investments. Moving on to first quarter regulatory and legislative outcomes. In March, Ameren Missouri received Missouri PSC approval of our largest-ever solar investment, three projects representing a total of 400 megawatts capable of powering approximately 73,000 homes. The approval of certificates of convenience and necessity, or CCN, for these projects is another constructive step along the pathway to executing our Ameren Missouri Integrated Resource Plan, or IRP. On the legislative front, the Missouri General Assembly is addressing power quality and reliability by considering bills to enhance and extend the current plant-in-service accounting, or PISA, legislation that would support investment in dispatchable resources and reliability. PISA has supported much needed reliability investments in the state’s energy grid over the past five years. While these bills, House Bill 1746 and Senate Bills 740 and 1422, have strong bipartisan support, time is short in the current general assembly session ends Friday, May 17. While the legislature has many priorities, we will continue to work with key stakeholders towards passage. At Ameren Transmission, progress continues to be made on the long-range transmission regional and beneficial projects, which I will cover in more detail in a moment. Turning to Illinois Electric delivery. We continue to diligently work for approval from the Illinois Commerce Commission, or the ICC of an electric grid investment plan, revised revenue requirements incorporating ongoing and prospective investments and an overall improved regulatory environment. In January, the commission granted a partial rehearing of our multi-year rate plan to address the base level of investment needed to operate the grid reliably. Subsequently, in February, we filed an updated plan as part of the rehearing proceeding. Then in March, we filed our revised multi-year grid and rate plans to address the commission’s findings stated in their December order. The rehearing and revised multi-year grid and rate plan proceedings are operating in parallel and with update rates for 2024 through 2027. We expect a decision from the ICC on the rehearing in June, which would provide a 2024 interim rate adjustment by July. We expect an ICC decision on the revised multi-year grid and rate plans by the end of the year, which would revise rates beginning January 2025. We continue to work with all impacted stakeholders to advocate for constructive regulatory frameworks and outcomes that support the state’s energy transition goals. Our ability to invest and deliver reliable and affordable energy is essential for our customers and the communities we serve and will support continued growth in our region. Moving on to operational matters. We remain committed to maintaining disciplined cost management to hold operations and maintenance expenses flat in 2024 to 2023 levels. I’d like to express my sincere appreciation to our Ameren team members who are working efficiently, collaboratively and safely to serve our customers. Now moving to Page 8 for details on the Rush Island securitization case at Ameren Missouri. Our request with the Missouri PSC to securitize the remaining balance of the Rush Island Energy Center and other related costs continues to make progress. In March, the Missouri PSC staff recommended securitization of $497 million as compared to our request of $519 million. Refinancing these investments through the issuance of securitized bonds, versus financing and recovery through traditional ratemaking will save our customers millions of dollars. Hearings were completed in April, and we expect the PSC’s decision by June 21. Now turning to Page 9 for an update on the new source review proceeding for Rush Island. As previously reported in 2017, the U.S. District Court of Eastern Missouri issued an order requiring the installation of a flue gas desulfurization system or scrubbers on our Rush Island Energy Center for violating new source review provisions of the Clean Air Act and install a dry sorbent injection system at our Labadie Energy Center, as mitigation for excess emissions at Rush Island. Upon appeal, the A circuit upheld the district court’s ruling with respect to the installation of scrubbers at Rush Island, but overturn the decision with respect to Labadie. Subsequently, we made the decision to accelerate the planned retirement of our Rush Island Energy Center, which was more economic for our customers than installing scrubbers. The District Court approved Ameren’s retirement proposal and established a retirement date of no later than October 15, 2024 to allow for the completion of various transmission reliability projects. The U.S. Department of Justice is seeking additional mitigation relief beyond the retirement of the energy center. In March of this year, the District Court ordered both parties to file proposals outlining additional mitigation relief for the court to consider. On Wednesday, Ameren Missouri and the DOJ filed their respective mitigation proposals. Ameren’s mitigation proposal consists of four essential elements

Operator:

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Shar Pourreza with Guggenheim Partners. Please proceed with your question.

Marty Lyons:

Good morning, Shar.

Marty Lyons:

Well, Shar, you’ve outlined a number of the considerations. I mean, first of all, we’re all just still absorbing the rules. And so our teams are studying the new rules thoroughly and will be over the coming weeks, really trying to assess what the potential impacts are on our IRP. And certainly, that could mean, as you know, a revision to the IRP. But of course, too, we’ll expect these rules to likely be litigated, and so we’ll have to take into account that litigation and the uncertainties that it creates. In my prepared remarks, I noted a couple of the more notable concerns that we have. The first being that the rules do really rely on carbon capture and sequestration, which I think we all recognize is it really ready for prime time today. And the things that would impact we have, as you know, in our IRP planned combined cycle facility, 1,200 megawatts plan for the 2032, 2033 time frame, which is really important from a reliability perspective as we expect to retire our Sioux power plant, our coal-fired power plant in that 2032 time frame. And certainly, new combined cycle that would operate with greater than a 40% capacity factor, which we would expect this one to – would be impacted by that carbon capture and sequestration. So that certainly has significant implications as it relates to that planned combined cycle facility. And we’ll have to reassess and thinking through that. The other one I mentioned is our Labadie Energy Center, that plant is scheduled to retire really in phases with about half of it in 2036 and the other half of it 2042. So the rule would have implications for the ultimate retirement date, pulling that forward a little bit. But in order to be able to maintain the life of that facility out through 2039. The rules require co-firing with natural gas in the 2030 time frame. And of course, trying to get things permitted and constructed in that amount of time, certainly proposes challenges as well. And so I highlighted those in my prepared remarks today. So at the end of the day, Shar, I think as we look at these rules, we do have concerns about the feasibility and ultimately the reliability of our system. Those were our primary concerns. But you’re absolutely right. As we think about these rules, it certainly could cause revisions to the IRP and on balance, suggest a greater level of investment that would be required to maintain reliability of our system over the next 10 years.

Michael Moehn:

Hey. Shar, it’s Michael. Good morning. A couple of things. I mean, as you noted, I mean, obviously, Zone 5, we’ve moved to this new seasonal construct, we did see quite a bit of variability. You had $30 in the summer and $0.75 in the winter and then CONE in the fall and the spring, at 719. So as you note, I mean, this is a capacity issue. It’s not an energy issue. And so I think it’s always important to start with that. We expect to have obviously enough energy available for customers we don’t foresee any issues with respect to providing reliable service, which I think is important. Also from a customer impact standpoint, we really don’t see any material, if any impact to customers as well. And it gets a little complicated. I mean the MISO model is a revenue neutral model and so it will be some shifting that goes on. We have Missouri owns generation in Zone 4, we’re able to point to those as hedges, and so it helps offset all that. But I think when you step back, I mean, it is right trying to send a price signal with respect to meeting additional dispatchable generation that you just spoke about. I mean, there were a couple of things I noted in my prepared remarks. I mean it was due to increased load. There were some accreditation issues with respect to some generation. They got dinged for some past performance. That should go away over the next couple of years. And then there was a reduction in import capabilities. And also, I think there’s probably some transmission opportunities there that would relieve that. So I think, again, it does speak to what we’re trying to do from a dispatchable perspective. And I think, Shar, there’s a way to work around this and see some relief over the next couple of years.

Marty Lyons:

Thanks for the question, Shar.

Jeremy Tonet:

Hi, good morning.

Jeremy Tonet:

Good. How are you?

Jeremy Tonet:

Just wanted to go to Missouri and as far as legislative initiatives there, if you could provide us, I guess, thoughts on the environment there, what you’re looking for and specifically PISA legislation and I think the session is ending soon. And so any thoughts there would be helpful.

Jeremy Tonet:

Got it. That’s helpful. And then maybe just pivoting towards Illinois. As far as the regulatory processes are concerned with the electronic hearing the grid plan refiling, any incremental thoughts you can share with progression versus expectations there? And really, I guess the question is more on the other side with the legislature. Do you see any potential there to maybe secure more constructive development?

Marty Lyons:

Yes, really, Jeremy, to add at this point. I mean, in terms of legislative initiatives, nothing to point to, of course, this year, both in Missouri and Illinois. We have supported a right of first refusal legislation in both states. In either states do we see those as moving forward at this time but continue to advocate for the benefit of those for our customers and for the reliability of the grid broadly but nothing to tack on right now.

Operator:

Our next question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.

Michael Moehn:

Hey, good morning, Carly. This is Michael. With the second part first, no, I think at this point, the expectation is kind of a little on that time frame and should have a decision here in July. In terms of sort of what’s embedded, that 305 is obviously over that four-year period. And so there’s a component, you can see that we have broken out for 2024. Again, feel good about what we have embedded in there and just sort of where the positions are. To the extent that something ended up changing that would have to just step back and look at it from a rate base perspective to the extent that it’s capital again, I mean, you’re earning 8.72%. So I mean that obviously minimizes the impact and we just have to see what our options are. I mean we do have flexibility with some additional capital there. But really just looking to see the process move along and feel better about the framework first.

Marty Lyons:

Yes, you’re talking about which one were you asking about? Were you asking about NSR case, Carly? Yes. I think, you were. Listen, as it relates to the NSR, as we outlined in our slide prepared remarks, we’ve proposed a program set up a value of about $20 million and the Department of Justice is outlined a series of programs that they’ve estimated at $120 million. And when you look at the components of the two programs that are very similar in terms of electric school buses, air filtration programs, charging infrastructure, so very similar. So it really is seemingly not a matter of the program mix. But sort of the extent of them and the cost of them. So we can’t predict what mitigation the court would ultimately order. We would generally expect though, that the positions I just talked about that the parties have and the proposed orders that sort of just book ends for the degree of mitigation relief that was either ultimately reached through a settlement between ourselves and the Department of Justice for a court order. But really can’t speculate further at this point.

Operator:

Our next question is from Paul Patterson with Glenrock Associates. Please proceed with your question.

Marty Lyons:

Hey, Paul.

Marty Lyons:

Well, Paul, it’s Marty. I think you hit on a number of the considerations. And I’ll go back to what I said before. It’s early days. We just got in the rules. We’re going to go through a thorough assessment of the rules and reassessment of the IRP. And again, you’ve got the likelihood of litigation, which will have to be factored in as well to our considerations. But I think when you look at the steps we’re taking between now and 2030 as we currently have outlined, I think the EPA rules underscore the importance of these. We’ve got 2,800 megawatts of renewables planned by 2030. We got 400 megawatts of battery storage planned between now and 2030. We’ve got 800 megawatts of simple-cycle generation plan between now and 2030. And I think given these rules, certainly, it underscores the importance of all of those things. I think the broader implications that are down the line. I think with respect to the retirement of the Sioux Energy Center that we have plan for 2032 generally in line with the rules. The Labadie Energy Center, I mentioned earlier, half of it retired in 2036, half of it 2042, again, if that need to be retired by 2039, maybe a little bit of a change in depreciation there recovery. But I think the bigger thing for Labadie then would be getting gas into Labadie and the ability to be able to co-fire with natural gas so that we’ve got that. And then I think when you think about that combined cycle facility and again, first of all, the feasibility of doing carbon capture much less of the cost of doing carbon capture, you really have to reassess that, that plan in light of these rules. But you’re right, what it might mean otherwise is more simple cycle gas fired generation, more battery, storage technology, more renewables. Because, again, anything if you’re going to operate a combined cycle over 40% capacity factor, it calls for carbon capture. So that – but those are – I think you’ve got your sort of finger on the things that you have to consider, which is what would be an alternative mix of renewables and dispatchable resources that can maintain reliability for the system.

Marty Lyons:

Maybe we’ll let Shawn Schukar who runs our transmission operations comment on that.

Paul Patterson:

Okay. Thank you. Good talk to you guys.

Operator:

[Operator Instructions] Our next question comes from Nick Campanella with Barclays. Please proceed with your question.

Marty Lyons:

Hello, Nick, same to you.

Marty Lyons:

Nick, it’s a great question. And I think, ultimately, wherever this settles, it really is a one-time item, it is non-recurring. Given the size of it today, we didn’t think it appropriate to sort of carve it out. And as we talked about on our call, we’d look to overcome the cost of that with respect to ongoing operations savings. However, again, as I outlined, the $20 million we proposed and the $120 million of the DOJ propose probably bookends as we think about settlement and an ultimate potential court order here. But like I would agree with you that ultimately, whatever this cost is non-recurring in one-time and won’t be something that affects ongoing operations or earnings.

Michael Moehn:

Yes. Hey Nick, it’s Michael here. Good Friday to you. Yes, look, I mean, we obviously reiterated our range of $450 million to $472 million really focused on the mid-point of that range. The team is completely aligned on flexing what we need to flex here from an O&M perspective. We talked about a number of programs. I think the first part of the year that we put in place with respect to some hiring freezes looking at discretionary spending and looking at contractors, travel, all those kinds of things. And again, those programs are fully ramped up at this point and feeling good about it. We have a long history of this. You’ve heard us talk about this. I mean we’ve been doing a number of things really from an automation and technology investment perspective. We’ve now fully deployed AMI [ph] and we feel we have distribution automation. We’ve done a great deal of stuff from the back office perspective in terms of accounting systems, HR systems, all of those are driving productivity improvements and we’re taking full advantage of. And I was sort of reflecting on the situation and thinking about 2020, that terrible COVID year, we only lost 15% of sales within about a week, and the team came together and really looked for tens of millions of dollars worth of opportunities that will really flex and continue to end up hitting our guidance for that year. I don’t see this as any different. We’ll continue to look for these opportunities. And ultimately, we’re going to make the decisions right for the long-term at the end of the day, but we do have the ability to flex out as we not as needed.

Michael Moehn:

Yes, yes, that’s correct. That still stands we delivered back there in February.

Michael Moehn:

Okay. Thanks for the questions.

David Paz:

Good morning.

David Paz:

Could you maybe expand on the data center opportunities? I know you mentioned them, mentioning centers along with some other large customers. But just what opportunity are you seeing there, particularly on the investment side, and maybe any sense of the size of the projects that potentially could come down the pipe and just how much would an incremental investment from Ameren for a typical size project? Thank you.

David Paz:

Great. Thank you for that color. Maybe just sneak a quick one. I think you sounded like your tranche, the Tranche 2 initial concept map suggests that there will be some opportunities in your service areas. Any sense how to compare that to what the initial concept at Tranche 1 looks for you guys? Is it roughly the same in terms of potential dollar either size or dollars?

David Paz:

Great. Thank you.

Operator:

We’ve reached the end of the question-and-answer session. I’d now like to turn the call back over to Marty Lyons for closing comments.

Operator:

Greetings, and welcome to Ameren Corporation's Fourth Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations and Corporate Modelling for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons:

Thanks, Andrew. Good morning, everyone, and thank you for joining us today. Beginning on Page four, our strategic plan highlights our steadfast commitment to providing safe and reliable energy in a sustainable manner. We do this by investing in rate-regulated infrastructure, enhancing regulatory frameworks and advocating for responsible energy policies, while optimizing operating performance through ongoing continuous improvement in order to keep rates affordable. Our strong 2023 operating and financial results, which we will cover today, reflect execution on our key business objectives for the year, which will continue to create value for our customers, communities, shareholders and the environment in the years ahead. I'd like to express appreciation for my Ameren coworkers' unwavering commitment to our strategy. Turning to Page five, this page summarizes our strong sustainability value proposition. Our operations and investments in 2023 made the energy grid safer, smarter, cleaner, more reliable and resilient, supporting thousands of jobs in our local communities in Missouri and Illinois, and driving a positive impact on the economies of each state. In the process, we helped hundreds of local, small and diverse businesses grow, and we gave back to numerous charitable organizations to help our neighbors in need. For example, last year, almost 60% of our total sourceable spend was with suppliers in our Missouri and Illinois communities, while 26% was with local small and diverse suppliers, creating jobs and economic growth and contributing to thriving communities in the areas where we operate. The positive impact of our investments was reinforced by our top quartile reliability performance in 2023, as measured by the frequency of outages. At the same time, our Ameren supplied residential customer rates, on average, were below the Midwest average. Today, we published our updated sustainability investor presentation called, Leading the Way to a Sustainable Energy Future, available at amereninvestors.com. I encourage you to take some time to read more about our strong sustainability value proposition. Turning to Page six. When I reflect on the business objectives we laid out at the start of 2023, I am pleased to say that we made some great strides in each of our three strategic pillars. That said, we did not achieve the results expected in our Illinois gas and electric regulatory proceedings. On Page seven, we lay out our key strategic accomplishments for 2023 in more detail. This past year, we invested $3.6 billion in infrastructure, spread strategically across our business segments, in order to improve service for our customers. These investments are needed to reduce the frequency and duration of outages in the face of volatile weather events, such as this past summer, when we experienced the most impactful storms in the last 10 years. Ameren, Illinois' work in restoring power to nearly 200,000 customers in the wake of the June 29, 2023 derecho was recognized with an Emergency Response Award by the Edison Electric Institute at its recent Winter Membership Meeting and there's plenty more work to be done to address aging infrastructure and make the grid stronger and smarter, while supporting the clean energy transition, making it truly an exciting time to be in the utility industry. Of course, every utility's ability to invest must be supported by constructive regulation, which brings me back to our regulatory developments in the fourth quarter. The State of Illinois has ambitious energy transition goals, goals which we continue to work collaboratively with stakeholders to support. Of course, achieving these goals will require significant sustained investment in the state's energy infrastructure in the coming decades. In 2023, Ameren, Illinois filed plans with the Illinois Commerce Commission, or ICC, to incorporate proposed investments in critical electric and natural gas infrastructure into prospective rates. Unfortunately, the ICC decisions in both the electric and natural gas rate reviews late last year were disappointing, reducing cash flows available for investment and delaying needed investments in energy infrastructure. We will continue working with stakeholders on a path forward to approval of an electric grid investment plan, revised revenue requirements incorporating ongoing and prospective investments, and an improved overall regulatory environment. We must work to build a stronger understanding that consistent, constructive regulatory environments are required to attract investment, support energy infrastructure development, economic expansion and jobs. Michael will cover the electric multiyear rate plan and the natural gas orders in more detail in a moment. Moving to Ameren, Missouri; in November, Ameren, Missouri filed a petition with the Missouri PSC, seeking approval to securitize the unrecovered investment in and costs associated with the planned fall 2024 retirement of our Rush Island Energy Center. The securitization is expected to result in significant savings for our customers when compared with cost recovery under traditional rate making. We, of course, recognize the importance of keeping our customers' bills as low as possible, while investing to improve service, which leads me to the third pillar of our strategy, optimizing operating performance. In 2023, our operations and maintenance expenses declined by 4% year-over-year. We automated and streamlined many of our finance, supply chain and customer service and workforce processes and we continue to drive new efficiencies in our field work through deployment of smart meters, work management systems and distribution automation. Notably, our Missouri customer rates have only increased 1.8% compounded annually since the smart energy plan legislation took effect in April 2017, with our Missouri residential customer rates consistently remaining 25% or more below the Midwest average. For our shareholders, yesterday we announced 2023 earnings of $4.38 per share compared to earnings of $4.14 per share in 2022. The result was above the midpoint of our original earnings per share guidance range of $4.35 per share. On a weather normalized basis, 2023 earnings results represent a 10% increase year-over-year. Turning to Page eight; here, you can see we have delivered consistent superior value to our shareholders for the past decade. Since 2013, our weather normalized core earnings per share have risen at an approximate 7.8% compound annual growth rate, while our annual dividends paid per share have increased approximately 58% over the same time period. This drove a strong total return of 173% for our shareholders from 2013 to 2023, which was significantly above our utility peer average. This track record of strong and consistent performance gives me conviction regarding our business strategy and rest assured, we are not looking back. We are focused on the objectives ahead. Moving to Page nine; we turn our focus to the current year. We expect 2024 to be another busy year and it hit the ground running. Notably, we will maintain our focus on strategic infrastructure investment for the benefit of our customers, while working hard to reduce operating costs and improve the regulatory environments in which we operate. We expect to invest approximately $4.4 billion in electric, natural gas and transmission infrastructure to bolster safety, security, reliability, resiliency and further the clean energy transition in a responsible fashion. This represents an increase of 22% from the prior year. Our plan includes approximately $1 billion of investment in new generation this year with new solar facilities expected to be in service by year end. The investment plans are aligned with our regulatory outcomes and expectations associated with each of our business segments. We also have several opportunities to enhance our regulatory and legislative environments in the year ahead. Next week, Ameren, Illinois will file a hearing testimony requesting to update 2024 through 2027 rates for 2023 yearend rate base and a base level of grid reliability investments. Then in March, Ameren, Illinois will file its revised multi-year grid plan with the ICC to address the commission's findings stated in their December order. An updated rate plan will also be filed to incorporate revised investment plans. Concurrently, we are evaluating all appropriate options to better align prospective regulatory outcomes with the goal of making progress on a reliable clean energy transition in an affordable fashion. We will work with all impacted stakeholders to advocate for constructive regulatory frameworks across our Illinois businesses, which will better support the state's energy transition goals. At Ameren, Missouri, we'd look to obtain approval to securitize the Russia Island energy center and advocate for Certificates of Convenience and Necessity or CCNs for future renewable and dispatchable generation, consistent with the integrated resource plan filed in September. The plan calls for investment in new dispatchable energy resources, including an on-demand 800 megawatt gas simple cycle energy center by 2027, which could be turned on as needed in a matter of minutes to ensure reliability of the energy grid during periods of peak energy demand. In January, we filed a request for the air permit for this simple cycle plant, Castle Bluff Energy Center to be located on the site of our retired Merrimack Energy Center. Utilizing this site, will keep construction costs down, bring back jobs and provide additional tax revenue for the surrounding region. We expect to file for CCN approval with the Missouri PSE later this year. We will also continue to support the analysis and approval of potential MISO tranche 2 transmission projects that will serve the needs of the Midwest region, improving the grid's ability to integrate renewable resources efficiently and effectively. Given the importance of dispatchable generation to reliability, we are advocating for improved Missouri regulatory treatment for generation investments, akin to the treatment afforded other investments in electric infrastructure in the state. Further on the legislative front in both Missouri and Illinois, we are advocating for Right of First Refusal -- Right of First Refusal Legislation to support the timely construction of transmission resources needed for system reliability and efficiency and to maximize customer benefits. Shifting our focus to operations, as we identify ways to continuously improve our business, we're focused on maintaining disciplined cost management to hold operations and maintenance expenses flat in 2024 to 2023 levels. Moving now to Page 10; yesterday afternoon, we announced that we expect our 2024 earnings to be in a range of $4.52 to $4.72 per share. Based on the midpoint of this range, this represents 6.2% earnings per share growth compared to the midpoint of our original 2023 guidance range of $4.35 per share. Michael will provide you with more details on our 2024 guidance a bit later. We expect to deliver 6% to 8% compound annual earnings per share growth from 2024 through 2028, using the midpoint of our 2024 guidance of $4.62 per share as the base. At this time, we expect earnings growth to trend below the midpoint of our range until the outlook in Illinois improves or the impacts of other growth opportunities are realized. That being said, we continue to have an outstanding portfolio of investment opportunities across our business segments, totalling more than $55 billion over the next 10 years and a strong balance sheet, which provide us potential earnings growth levers that warrant maintaining a guidance range with up to 8% growth. Our dividend is another important element of our strong total shareholder return proposition. Earlier this month, Ameren's board of directors approved a quarterly dividend increase of 6.3%, resulting in an annual dividend rate of $2.68 per share. This represents the 11th consecutive year that we have raised the dividend and reflects confidence by Ameren's board of directors in our business outlook and management's ability to execute our strategy. Looking ahead, we expect Ameren's future dividend growth to be in line with our long-term earnings per share growth expectations and within a payout ratio range of 55% to 65%. We expect our weather normalized dividend payout ratio in 2024 to be approximately 58%. Over the last decade, we have gradually lowered our payout ratio, which provides financial flexibility, while executing our robust energy infrastructure investment plans. Turning to Page 11; the strong long-term earnings growth I just discussed is primarily the result of rate-based growth driven by investment in energy infrastructure, made strategically under constructive regulatory frameworks. Today, we are rolling forward our five-year investment plan and as you can see, we expect to grow our rate base in an 8.2% compound annual rate for 2023 through 2028. This plan represents an increase of $2.2 billion compared to the $19.7 billion five-year plan for 2023 through 2027 that we laid out last February. The plan includes investment in renewables and simple cycle gas generation consistent with Ameren Missouri's integrated resource plan and because of the ICC's orders late last year, our capital plan for Ameren Illinois investments has been reduced by approximately $400 million from 2024 through 2027 compared to our prior five-year plan. We expect that this level of investment, which we expect will provide safe and adequate service as well as meet compliance requirements under the Climate and Equitable Jobs Act will ultimately be approved by the ICC. That said, we continue to believe that a higher level of investment supported by a more constructive return on capital investment would be in the best interest of our customers and communities and we will continue our advocacy. Finally, we remain focused on keeping customer bills as low as possible and improving earned returns in all of our businesses. Moving to Page 12; as we look to the future, our five-year plan is not only focused on delivering strong results through 2028, but it's also designed to position Ameren for success over the next decade and beyond. The right side of this page shows how our allocation of capital is expected to change over the next five years. Incorporating generation investment opportunities from our latest IRP, we expect our 2028 rate base to reflect our diversified approach for maintaining reliability with renewable generation and dispatchable generation representing 12% and 11% of rate base, respectively. Notably, our coal-fired generation is expected to be just 3% of rate base by the end of 2028. The bottom line is that we are taking steps today across the board to position Ameren to provide safe, reliable, affordable and cleaner energy for the long-term. Moving now to Page 13; our investment plan released today incorporated our intentions to invest over time in significant renewable and dispatchable resources as laid out in our Ameren, Missouri IRP. In 2023, we were pleased that Missouri PSC approved CCNs for the Huck Finn and Boomtown solar projects, and in doing so, indicated support for our responsible gradual transition and I'm happy to announce that we reached a stipulation and agreement regarding our next four solar projects, totalling 550 megawatts. These projects will support our lease cost plan for meeting customers' energy needs as we systematically invest to create a diverse mix of generation resources that preserves reliability as we retire our existing coal fleet over the next 20 years. While the Missouri PSC is under no deadline to issue an order on these four project CCNs, we expect a decision in March with these projects expected to go in service between 2024 and 2026. We expect to file additional CCNs consistent with the IRP later this year. Moving to Slide 14; as we've discussed in the past, MISO completed a study outlining a proposed roadmap of transmission projects through 2039. Detailed project planning, design work and procurement for the Tranche 1 projects assigned or awarded to Ameren is underway, and we expect construction to begin in 2026. During 2023, Ameren was awarded the first two competitive Tranche 1 projects, totalling approximately $100 million. Ameren submitted the third and final Tranche 1 competitive bid in October and expects the project to be awarded by June 2024. When awarding the competitive projects to Ameren, MISO noted our sound route design, engineering and cost containment plan, and innovative approach working with stakeholders as key factors in the winning bids. This is indicative of how we plan and develop all transmission projects. We believe our collaborative, customer-centric and community-respectful approach to building and maintaining low-cost projects is why we should be directly assigned these projects in the future in both Missouri and Illinois. MISO expects to approve a set of Tranche 2 long-range transmission projects in the first half of 2024, which will again address Midwest region needs. Turning now to Page 15; looking ahead over the next decade, we have a robust pipeline of investment opportunities of over $55 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. Of course, our investment opportunities will also create thousands of jobs for our local economies. Maintaining constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs and delivering on our customers' expectations. Moving to Page 16; discipline cost management and a focus on customer affordability is nothing new to us here at Ameren and we expect 2024 to be another year of disciplined cost control and value realization from continuous improvement initiatives, which Michael will provide more details on in a few minutes. Through innovation and new efficiencies, we continue to target flat operations and maintenance expenses through 2028. Moving to Page 17; to sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2024 and beyond will continue to deliver superior value to our customers, shareholders and the environment. We believe our expectation of 6% to 8% compound annual earnings growth from 2024 through 2028, is driven by strong rate-based growth and supported by a strong balance sheet, compares favourably with our regulated utility peers. I'm confident in our ability to execute our strategy and investment plans across all four of our business segments, as we have an experienced and dedicated team with a track record of execution. Further, our shares continue to offer investors an attractive dividend, and we are positioned well for future dividend growth. Simply put, we believe this results in an attractive, total return opportunity for shareholders. Again, thank you all for joining us today, and I will now turn the call over to Michael.

Operator:

[Operator instructions] Our first question comes from a line of Shahriar Pourreza with Guggenheim. Please proceed with your question.

Marty Lyons:

Yeah, I'll let Michael comment on that further, but I would say, Shahriar, you're right. What we've done here is we've baked in what we believe to be a prudent level of capital expenditures, given the overall outcomes that we had in Illinois. As we said in our prepared remarks, we do believe that this is an appropriate amount to continue to provide safe and adequate service to our customers and meet the requirements of CEJA And that's what's been baked in. I just repeat what I said earlier, which is that we do believe a higher amount of investment over time is originally proposed last year is prudent and appropriate for our customers to provide the kind of service that they expect to really further the state's energy goals and policy goals. But again, what we've modelled in here is what we do believe would be a level that would be expected to be approved by the commission over time through the rehearing process, as well as through our upcoming grid plan filing and rate plan. So again, we do expect that this level of investment is something that will ultimately be reflected in those outcomes, but with that, in terms of further clarity on the CapEx, Michael, any comment?

Shahriar Pourreza:

Got it. Perfect and Marty, just, thanks Michael. Marty, just on Tranche 1, is it versus Tranche 2, is it still your expectation Tranche 2 will exceed Tranche 1? And then just on Tranche 2 estimates, are they embedded in that $55 billion pipeline number? Could any of the awards fall within this kind of five-year cycle you've got out there? Thanks guys.

Operator:

Our next question comes from the line of Nicholas Campanella with Barclays. Please proceed with your question.

Marty Lyons:

Yeah, Nick, maybe we'll take that in two part. I'll actually turn it over to Michael first to maybe provide a little bit more clarity on our thinking around the growth and then I'll provide some color on some of the upsides in our plan.

Marty Lyons:

Yeah, I think, Michael started to touch on it a little bit. In terms of, the upsides, as I said in the prepared remarks, we certainly see good justification for keeping that 6% up to 8% growth and really what it reflects is that strong pipeline of investments that we have. We start there, $55 billion of potential investments over the next 10 years. We have baked into the five-year plan, the Tranche 1 investments that we've been assigned to us or that we've won, but we also have competitive proposal out there right now for another Tranche 1 project, which hasn't been baked in and that provides us some upside. We've talked about just a second ago, some of the Tranche 2 projects. We've got further investments to be made with respect to Missouri as it relates to the IRP. We've got some of those, certainly baked in today. As I mentioned, we had a very strong balance sheet and opportunities, as Michael just said, to continue to close the gap between our allowed and earned returns, which provides upside. And then of course, as we look ahead in Illinois, a couple of things, first, you know, the current multi-year grid plan or rate plan ends in 2027. And so as we look out even to 2028, there's opportunities to think about that differently and what our approach will be in 2028 and then I go back to maybe the most important thing, which is in the interim to really work to improve the Illinois situation and perhaps provide an opportunity for greater investment in Illinois. So, there, as we said in the call, we're gonna continue and engage in a dialogue with all stakeholders about the benefits of investment, risks of disinvestment, and our goal of really aligning our investments with the policy goals of the state around reliability, affordability, the clean energy transition and of course, we all know that our investments drive, not only improvements in critical energy infrastructure, but jobs and economics expansion. So, look, we've got to just continue to show financial discipline in the short term, but in the longer term, make sure we create this dialogue that having consistent constructive regulation, having strong investment in infrastructure in the state is going to benefit, our customers, their communities, the economy, the state and continue to work to make Illinois a place that attracts greater investment.

Michael Moehn:

Good morning again, Nicholas. This is Michael, let me take this, and Marty can certainly add in, and we've talked about this, obviously, over time. Customer affordability is not something that is new to us. I think we've been really focused as a company on it for a number of years, and really up and down the P&L and we've talked about this, we, I think, do a great job of kind of going in and continuing to benchmark ourselves, all of the different areas of our business. And some are really good, some have opportunities, and we continue to close the gap in those opportunities and I think, Marty pointed to the 4%. It was, obviously people are very focused on it. We've talked about flat O&M over the five-year period is a good way to think about it, but the bottom line is there are a number of levers that we're able to pull here. I think as we think about '24 specifically, I mentioned in my opening remarks, I think we're taking just another view here. We're looking at headcount, I talked about headcount, hiring freeze at the moment, being very thoughtful about just contingent workforce, consultant dollars, any sort of discretionary spend. I think all the right things to do just in this elevated rate environment anyway for customers, and so that's really the focus there. But we're also being very thoughtful and strategic about, as you mentioned, just rate reviews, etcetera and being thoughtful about investments on the digital side too, just to make sure we make these costs sustainable. That's really what we want to do. I think we've talked about, we've had an increased investment in the digital platform over the last several years after we got PISA passed, and it's allowed us to replace our work management systems, our back office accounting systems. We continue to put a great deal of distribution automation, etcetera, on the system and all of these things are productivity improvements over time, which just give us a lot of confidence. This is a lever that we can continue to pull. So, Marty, anything to add there?

Nicholas Campanella:

And I'm sorry, just to follow up on that, are you planning to file a Missouri rate case in the next year, or is that more than a year out?

Nicholas Campanella:

All right, thanks for taking my questions. Have a good day.

Jeremy Tonet:

Thanks for all the detail today, and just wanted to kind of follow up on some of the points that you've talked about before and just regarding your capital reallocation, how should we be thinking about Missouri bill impact over time from the higher CapEx, just any thoughts there. And then also as we think about deploying that capital, the timing for receiving approvals and permits with additional transmission investments, broadly speaking on that side, if you could provide some more color there would be helpful.

Michael Moehn:

Yeah, Marty did a great job there, Jeremy. I think the only thing that I'd probably add there is if you think about the $13 billion that we're allocating to Missouri, about 25% of its renewables and obviously an important factor is just the PTC, ITC that's being, given off with respect to those projects. So you think about the impact for customers, ultimately, there is a really big benefit there and so it's just something to keep in mind. I agree with everything else Marty said. We continue to be focused to all the comments I made before. It's not something new that we're doing here. Sometimes you can get a little lumpy impact in Missouri just because of the timing and the rate reviews, but the team really is focused on trying to keep these bills as low as possible.

Michael Moehn:

Yeah, I think, look, the first order of business as we look at is, as I said before, to really try to work constructively with stakeholders and right now I'd say our primary focus is a couple of things. It's number one, making the rehearing filing, which is we plan to make next Thursday. So there, the opportunity to have rehearing around incorporation of 2023 rate base, as well as baseline capital investments that we plan to make over the next five years and have those included in a rehearing. And then as we've said before, we follow that up with our grid plan update and filing in mid-March. There again, we get feedback from the commission, obviously on deficiencies that they saw within the initial filing. We're looking to address those. We're looking to work constructively with stakeholders, whether it's the staff or other parties to make our filing as strong as we can to address the commission's identified deficiencies and position ourselves for success in getting, again, both a good outcome in the rehearing, as well as getting that grid plan approved and ultimately incorporated into a revised rate plan. So, I think those are where really our focuses are in the short term. Like I said, in the longer term, we'd like to see a more constructive environment for investment, and that's going to take really engagement with all stakeholders and I think, what we found is a receptivity among stakeholders to have the conversation, to listen, and we'll figure out over time what the best path forward is to achieving the result we want, which is a more constructive environment for investment, which again, we believe is ultimately in the best interest of customers, communities and in the achievement of the state's policy goals.

David Arcaro:

I wanted to, in terms of whether normal load growth, just wondering how conservative...

David Arcaro:

Just in terms of whether normal load growth, was wondering how conservative the outlook is that you're presenting here. Is there any possibility for acceleration either from any manufacturing activity or data center activity that you're seeing or otherwise?

Marty Lyons:

Yeah, I would just say that, look, we have a broad service territory and we're deeply involved in throughout Illinois and Missouri in economic development activities and our teams support economic development expansion across both service territories. I would say this though, in the greater St. Louis region, both in the Illinois side and the Missouri side, I'm more excited than I've been in years with respect to, I would say, the collaborative approach to really going after economic development efforts and really thinking about, how we drive inclusive economic growth, economic development and compete for projects. And I've never seen the community as unified and speaking with one voice and going after these things. We're seeing some wins, some wins that'll produce, I think, economic expansion two and three years out, some positive announcements, as Michael said. But, and I hope we are being conservative with respect to our growth projections. That said, as we see growth, we often see also, continued efforts on energy efficiency, both the energy efficiency we promote, but also just kind of energy efficiency in general and so try to be realistic about our growth expectations of those efforts.

Michael Moehn:

Yeah, perfect. So, again, we haven't really given targets in the past. I think what we've talked about is, look, we like our ratings where they are, BAA1, BBB+, that downgrade threshold S&P is 13. 17 at Moody's. We've trended obviously closer to that 17%. Again, as I outlined in my opening remarks, we feel good about our balance sheet. I think we come into this from a position of strength as I look out over the five years, the equity needs that I outlined certainly support, I believe actually maintaining that BAA1 and so maintaining something over that 17%, over that five year period. And so, and again, I try to be clear on what we did from an equity standpoint, for 2024, we're assuming $300 million of equity. We've done about $230 million under our ATM program today. Really the remaining balance that we need to do is related to our DRIP 401k. And then for all the other years, it's really consistent with where we had been before. So basically $600 million and again, I think supports those credit ratings that I just spoke about.

Durgesh Chopra:

Hey guys, thanks for giving me time. I know it's close to the hour. Just Michael, on the point about equity, maybe you could just expand on this. So the CapEx plan is up, the five year CapEx plan is up close to 10%, a little over 10%, but the equity is kind of the same. Are you kind of modelling now lesser question versus the downgrade thresholds or are there other cash flow improvements that you might be missing?

Durgesh Chopra:

Got it. And then maybe just a couple of clarifying questions and this will be quick, hopefully, but in the current five year CapEx plan, the four solar projects that you have settlement for in Missouri, those are included in the plan. Confirm that for us and then the upside would be the Missouri IRP results and then any transmission project awards from the MISO planning. Am I thinking about it correctly?

Durgesh Chopra:

It was just the traffic upside.

Durgesh Chopra:

Got it. Thank you so much. I appreciate the time.

Julien Dumoulin Smith:

Hey, good morning team. Thank you guys very much for the time. I appreciate it, or squeezing me in here. Look, maybe just to kick off quickly here, just on the balance sheet, obviously you're bringing down equity slightly over the comparable period from last plan. I'm taking CapEx fairly meaningfully here. I just wanted to clarify, just where are you relative to the required metrics? Can you elaborate a little bit through the cadence of the plan, how you're thinking about the FFO to debt? Or just where are you starting and ending, if you will and then I got to follow up real quickly.

Julien Dumoulin Smith:

Got it, so every year kind of over that 17% threshold, give or take. And the rating is…

Marty Lyons:

And again, look, as we have frequent conversations, then we'll go in again and have another conversation with them, so.

Michael Moehn:

Well, look, I think one of the things you could look at, Julien, is every year at this time, we make a filing in Missouri where we're very transparent and lay out what our planned capital expenditures are, how we're justifying those, thinking about those, where they plan to go and so you'll see that actually today coming from Ameren, Missouri. It happens every year at the same time and then it's subject to public discussion about the plans and where they're going. I would say this, as you look at Missouri, it's really, as I said earlier, it's really to align our investment with the things that were in our IRP last fall. So, we do plan to invest in an 800 megawatt simple cycle plant. We do plan to continue to invest in our dispatchable resources, which is both our coal-fired energy centers to get them through to their retirement, making sure that they're reliable and efficient, making sure that we continue to invest in our nuclear facilities. So we've got a lot of dispatchable resources there. And then as it related to the IRP, also we had planned investments in renewables in some over this five-year period and in battery storage as well and so those are included in the plan. As I mentioned earlier, with respect to renewables, we got a positive order out of the commission on a couple of CCNs last year. We've got four that are pending right now that we believe will be filing a stipulated settlement here in the short term. And we would look to commission approval, but those would be subject to commission approval. And then we've got other planned investments in renewables, again, in accordance with that IRP. And then with respect to the remainder of the spend, it really has to do with continued investment in our distribution infrastructure. I think our customers are seeing a lot of benefits today, as I mentioned in our prepared remarks, especially when we have severe weather events. We're seeing the infrastructure investments that we are making, which are stronger, thicker, taller poles, smart automation, distribution automation, our system, new substations. We're really seeing the benefit of that in terms of reduced frequency of outage. I mentioned earlier, the hit top quartile in terms of safety measures or frequency of outages here. So seeing a lot of benefits from that, but, we've only really been at that since 2018, and there's a tremendous amount of investment still to be made, really decades of investment still to be made in terms of not only replacing aging infrastructure, but really modernizing that infrastructure to make sure that the kind of benefits that we're seeing in terms of reduced frequency and duration of outages across our service territory in Missouri. So again, all of that is subject to further planning and etcetera, but I think, again, I'd point you to today's filing in Missouri, which really lays out all the specifics in terms of the plans we had to invest and the justification. With that, I'll stop.

Marty Lyons:

Yeah, well, thank you. And I wanna thank everybody for their participation today, their questions. We thank you for your investment, your confidence in our Ameren team. We're going to work to build on the best we have of delivering reliable, safe and affordable energy for our customers and communities across both Missouri and Illinois. So look, everybody, be safe and we look forward to seeing many of you at conferences over the next few weeks.

Operator:

Greetings, and welcome to Ameren Corporation's Third Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons:

Thanks, Andrew. Good morning, everyone, and thank you for joining us today. We had a strong quarter, and we're excited to share an update with you on recent developments. But before I begin our quarterly update, I would like to take the opportunity to congratulate Warner Baxter, who retired as Executive Chairman on November 2. Over his 28-year career with the company, Warner has had a significant positive impact on our industry, company and community. And frankly, each of us here this morning. Under Warner's leadership, Ameren has successfully executed a strategy focused on robust energy infrastructure investments supported by constructive energy policies driving strong value for Ameren's customers, communities and shareholders. And consistent with his focus on sustainability, he leaves behind a strong team dedicated to maintaining that focus and continuously improving. Congratulations Warner, and I wish you well in your retirement. Moving now to Page 5 and our quarterly update. Our dedicated team continues to execute our strategic plan across all of our business segments, which entails investing in energy infrastructure to deliver safe, reliable, clean and affordable electric and natural gas services to our customers. Turning to Page 6. Our strategic plan integrates our strong sustainability value proposition balancing the four pillars of environmental stewardship, positive social impact, strong governance and sustainable growth. Here, we summarized some of the many things we are doing for our customers, communities, coworkers and shareholders. And today, we published our updated sustainability investor presentation called leading the way to a sustainable energy future available at amereninvestors.com. which more fully details how we have been effectively integrating our sustainability value proposition, balancing the four pillars of environmental stewardship, positive social impact, strong governance and sustainable growth. Here, we summarize some of the many things we are doing for our customers, communities, co-workers and shareholders. And today, we published our updated sustainability investor presentation called leading the way to a sustainable energy future, available at amereninvestors.com which more fully details how we have been effectively integrating our sustainability value transmission lines. Such legislation would support the timely and cost-effective construction of the MISO long-range transmission planning projects and other need to transmission investments. Unfortunately, the legislation was vetoed by the governor in August, it was not ultimately brought to a vote during the detail session. We will continue to work with key stakeholders to support this important piece of legislation in the spring legislative session. On Page 14, we look ahead to the next decade. We have a robust pipeline of investment opportunities totaling more than $48 billion that will deliver significant value to all our stakeholders by making our energy grid stronger, smarter and cleaner. The $48 billion does not reflect the incremental investment opportunities included in the recently filed Integrated Resource Plan. We will provide an updated number on our call next February, along with the new five-year capital plan. Of course, our investments create thousands of jobs for our local economies. Maintaining constructive energy policies that support robust investment in energy infrastructure and to transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs and delivering on our customers' expectations. Turning now to Page 15. In February, we updated our five-year growth plan, which included our expectation of 6% to 8% compound annual earnings growth rate from 2023 through 2027. This earnings growth is primarily driven by strong compound annual rate base growth of 8.4%, supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. Combined, we expect to deliver strong long-term earnings and dividend growth, resulting in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plans and strategies across all 4 of our business segments as we have an experienced and dedicated team to get it done. Again, thank you all for joining us today. And I will now turn the call over to Michael.

Operator:

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from Nicholas Campanella with Barclays. Please proceed with your question.

Marty Lyons:

Hey, good morning, Nathan. This is Marty Lyons. Before you get to your question, I just you may not have experienced this, but I think many of our participants that were participating on the webcast missed a portion of our prepared remarks because of systems issue, but I just want to reassure everybody, we will post our replay of the entire conference call as soon as possible following the end of the Q&A session. So with that, please carry on with your question.

Michael Moehn:

Yes. Perfect. Good morning. This is Michael. Yes, our equity needs are really unchanged from where they were at the beginning of the year, we issued our five-year guidance. We talked about $300 million of equity that we needed to do in '23 and then $500 million per year, beginning in '24 through the balance of '27, happy to report, I think we've said this before, we've taken care of those equity needs for '23. Those have been done under an ATM forward sales, so we'll bring those down here at the end of the year. We've sold forward about $100 million of the $500 million need for 25 through some forward sales. As we sit here today, we continue to find the ATM to be very effective, efficient. We'll continue to evaluate our needs. Our capital comes in pretty ratably. So the ATM works well from that perspective. And so -- but we're always open to, if there are better mechanisms to continue to take advantage of.

Michael Moehn:

Yes, you bet. I mean, it looks like the transferability market continues to evolve here nicely and continue to see some deals get -- starting to get done there, which is great. Yes. I mean as we kind of step back and think about it, it's certainly something we could avail ourselves of over time just because we don't have necessarily the tax appetite to use all those when we need to. And so as we think about from a financing perspective, I mean, there could be -- it could be a slight positive, right, just over time? I mean ultimately, you're going to end up providing those back to customers, which is great because it ends up lowering the cost of those renewables, which is what we all want. But there could be some positive temporary regulatory lag that we may experience from time-to-time. But not a huge, I think replacement any sort of financing needs going forward, if that makes sense.

Michael Moehn:

You bet, thank you.

Shahriar Pourreza:

Hey guys, good morning.

Shahriar Pourreza:

Good morning. Let me just starting with Illinois. I mean, can you just maybe talk a little bit about the outlook for the balance of the process here on the multiyear. I mean, obviously, your neighbor in Chicago was very dissatisfied with the ALJ. You have briefs out there. I guess what's your expectation for the ICC to depart from the ALJ at this point? And what's the next step, right? So would you consider filing for a rehearing of the ALJ stands as is? Would you look to defer redeploy CapEx? I'm just kind of curious what the next step could be if you get an adverse decision.

Michael Moehn:

Might agree with all those comments. And just Shar, remind you, I think you know this, I mean, it's about 18% of our rate base today. And again, as we sort of step back and just look at our overall capital plan, we got the $19.7 billion out there over the next five years and $48 billion over the next 10. I think we have really constructive jurisdictions to continue to allocate that. We'll continue to be thoughtful about that. As Marty said, I think where we are from a rate base and capital addition standpoint and that rate review process is a positive at 95% or so. But we have some flexibility to pivot if needed.

Michael Moehn:

Yes. I mean again, as I think as we sit here today, really just kind of stand by the comment I just made about the ATM itself. I think it provides us a great deal of flexibility. It's cost-effective. It's not to say that we wouldn't entertain something if we needed to. But again, just the way that capital is being laid in over time. It's been a pretty effective way to do it.

Shahriar Pourreza:

Perfect, thanks very much guys and big congrats to owner but I have a sense that he is going to be as busy as ever anyway even in Phase 2. Appreciate it guys.

Operator:

Our next question comes from Julien Dumoulin-Smith with Bank of America. Please proceed with your question.

Michael Moehn:

Hey Darius, Michael here, thanks again for the question. Look, again, as we sit here today and we updated and provided guidance in February, that's we feel good about that 6% to 8%, thinking about that midpoint of 435. We gave you some select drivers here, right, in terms of what we see sort of impacting us kind of year-over-year. But again, feel good about the situation that we again feel good about the 8.4% rate base growth that we have. We've had obviously the updated IRP that we released in September. We talked about an incremental $1.5 billion of capital that could come into the plan over time there. So again, as we sit here today, feel very good about that 6% to 8% earnings per share growth.

Marty Lyons:

Yes, happy to answer that question. This is Marty again. So again, with respect to the projects that were signed to us in Tranche 1, the $1.8 billion, as we're getting underway with those, which is fantastic. And then there were about $700 million of competitive projects. And the first one that we bid on was the Orient to Denny Fairport project. And we're very pleased that we were selected as the winning bidder on that project. As you mentioned, the ultimate price that we bid was lower than the MISO's original planning estimate. And I think our bid is indicative of the kind of work we do to partner with others, whether those be co-ops and munis in the area or vendors to really deliver a low-cost project. And as I mentioned, MISO's numbers are planning estimates and don't necessarily have the rigor that goes into the formal bids that we provide. But I wouldn't read too much into where that project came out relative to MISO's estimates. Each project is going to be different. Each project has its own routing issues, land acquisition requirements, partnering opportunities, et cetera. So you really can't extrapolate that outcome to the entirety. But again, I think we're very pleased with where we are. We are very pleased that we were selected as the winning bidder on that project. And we submitted another bid on another project, the Denny to Zachary Thomas Hill Maywood project. And we've got one more that we plan to bid on as well the Skunk River.

Operator:

Our next question is from Jeremy Tonet with JPMorgan. Please proceed with your question.

Marty Lyons:

Good morning.

Marty Lyons:

This is Marty again. I really can't comment on why, if you will, they got to that. They used some discounted cash flow and capital asset pricing model kind of calculations that used some data that was in the record. But again, in our reply briefs, we note certain data that alternatively should be used in our view, in those calculations if they were used. And of course, staff use similar calculations and came up with a little over 10%. So again, I can't say why, but we again feel like inappropriate data points were used in those calculations, which again, in our reply briefs we addressed, and I'd refer you there in terms of our thoughts in terms of those calculations.

Marty Lyons:

Yes, I think the conversation that's been had within the state is very much a balanced one. I think that some of the things that we put into this IRP as opposed to our prior one was the addition of 800 megawatts of gas simple cycle in 2027. And we made a couple of adjustments to, first of all, the timing of one coal-fired energy center to push that out for a couple of years and with it push out a 1,200-megawatt planned combined cycle plant. And then I can say we also move forward some of the battery storage technology we had planned by about five years. And I think the conversation has been balanced because in doing this, what we're really doing is putting -- stressing the fact that our integrated resource plan really represents what we believe to be the lowest cost approach to transitioning our portfolio of energy centers over time and maintain importantly, the reliability that our customers expect and as we do that, making sure that we're being good environmental stores. We're able to add those resources to bolster reliability, while still hitting carbon emission reduction targets that we've discussed previously of 60% by 2030, 85% by 2040, and ultimately, that net zero. So again, I believe the conversation has been really balanced because of that, our focus on affordability, our focus on reliability, while still hitting our targets in terms of environmental stewardship.

Marty Lyons:

Thank you.

Operator:

Our next question comes from David Arcaro with Morgan Stanley. Please proceed with your question.

Marty Lyons:

Yes. With respect to the Missouri renewables, earlier this year, the Missouri Public Service Commission approved to solar projects that we had proposed, both the Huck Finn and the Boomtown solar projects together, there are about 350 megawatts of investment. And those are projects that we will be constructed and that we will be own, and we expect closing date on those to be Q4 of 2024. So a good step forward in terms of commission approval of projects consistent with our IRP and our ownership. We also filed for CCNs this year for an additional 550 megawatts of solar projects, four projects in total. And that's going to be proceeding. We expect a commission decision on that early next year. And again, we do believe it's in the best interest of our customers and communities long term for these projects to be constructed for our ownership. In our Integrated Resource Plan, we didn't change the amount of our anticipated and planned overall renewables versus our prior IRP, we did include an expectation that the costs associated with those renewables would increase. However, those costs are being offset by the impact of the higher production tax credits and investment tax credits that are available under the Inflation Reduction Act. So when we go to -- when you look at the IRP, which we laid out the timeline on Slide 10 that we provided. What you see there is a really good balance of the growth in renewable projects, but also investments in assets that will preserve reliability, as I mentioned a second ago, both the gas simple cycle, the gas combined cycle, some of the battery storage technology that's really going to ensure that we continue to have a reliable system. But the important thing is that this combination of resources, along with the continued investment, ensuring the reliability of our existing dispatchable assets, both our Callaway nuclear plant as well as our coal assets through retirement. We really believe that this represents a least cost plan for providing energy to our customers in Missouri and preserving again, the reliability that they expect. So again, the CCNs that we're proposing for the renewables really fit with execution of this IRP. And then with respect to your last question. While you can't rule out the possibility of PPAs. What we've really demonstrated over time, if you look at some of the renewable projects that we've put into our portfolio and have had approved by the commission, is that we really do believe in the long term that our ownership and operation of these assets provides the long-term lowest cost for our customers.

Michael Moehn:

Yes, you bet. Good morning, David, this is Michael. Yes, this year has obviously been a little interesting. You see some of the decreases in residential. I think we attribute that to a couple of things. We had some significant storms number of them over the summer that certainly contributed a bit to that. And then also, we still just working through, I think, the going back from working at home into the office. And so you're certainly seeing that transition as well. And it continues to throw the number around a bit. We've -- obviously, we've had some extreme weather here and there, which always factors into kind of how you think about this on a normalized basis, but you try to get it as close as possible. I do think it is beginning to level out as we kind of look forward. And I mean, again, I think I pointed out, if you look at our residential side of things, I mean, you're seeing about 3% growth relative to where we were kind of pre-pandemic. And the other positive is we actually have customer growth year-to-date, too. So ultimately, you believe that's going to continue to transition into some sales growth. I think on the commercial side, we continue to see some positives. I mean the industrial line noted that obviously we are impacted by the strike at GM that was going on for some period of time that obviously seems to be concluding. There's actually an expansion that has occurred there and so we should see that be a positive element going into the remainder of the fourth quarter. And then I think there's some positive developments that we're seeing just broadly on the industrial side as well that are adding some little growth. So I mean as we look out in the future, I think we still stick by this about 0.5% kind of load growth over time. I think that has the ability, hopefully, to move up as some of this industrial continues to evolve, but that's where we are today, David.

Michael Moehn:

You bet.

Paul Patterson:

Hey, good morning guys.

Paul Patterson:

Just wanted to -- I apologize if I missed this, because I did have some tech problems. But the -- Darius, was asking about the competitive bid, and I was wondering, do you guys have any data that you guys provided or can provide on kinds of what kind of returns you're seeing in the competitive transmission versus just in general?

Paul Patterson:

Sure. Okay. But I guess maybe it's competitive to tell us what that might be? Is that right? Or can you?

Marty Lyons:

Well, I think, Paul, as it relates to the court cases as we watch court case around the country, both in Texas as well as a couple of other states. We've seen them run into problems in Texas. We've seen the ROFRs upheld in other states. So we're going to continue to watch the developments across all of these cases. And then make sure that whatever we bring forward, which we do plan to bring forward next year, these rights of first refusal, both in Illinois and Missouri. That we make appropriate adjustments to the proposed legislation to ensure that they're able to withstand legal challenges and hold up. If for some reason through the process of these things going through the courts, we don't believe that they'd be lawful. Obviously, that would affect whether we move forward with seeking these rights of first refusal or not. But as we sit here today, we do believe both in Missouri and Illinois that these rights of first refusal really are very beneficial to our customers and communities. I think we just talked about this [indiscernible] that we won, which was this Orient-Denny-Fairport project. And I think it just goes to show that we are a low-cost constructor. We are a low-cost operator. And we do believe that these projects have very good value for customers. And when MISO puts these forward Tranche 1, I mean what's to come in Tranche 2, these projects have very good benefit to cost ratios. And by not assigning those to the incumbent transmission operator by putting them out for bid, you're delaying those benefits to customers by two years or so. And again, we've certainly demonstrated we're a low-cost provider. So we do think that these rights of first refusal are in the best interest of our customers. The citizens of both the states of Illinois and Missouri. And we look forward to working with stakeholders as we move towards the next legislative session to really build a stronger coalition and make sure people really understand the value, and we'll work with all stakeholders to put forward legislation that we think not only can pass, it should pass, but can withstand any core challenges. So back to your question, Paul, we'll continue to monitor these cases as we have and adjust as needed.

Marty Lyons:

Well, I do. And I guess we'd have to see how the Supreme Court rules, what they say. But when -- we talked about this a little bit on the last call. When we looked at Texas, we thought it was really more applicable to the situation in Texas whereas when we looked at crafting the rights of first refusal we've been putting forward more aligned with states where the ROFRs have been upheld in the courts. So I think we'd ultimately have to look at the ultimate -- the Supreme Court decision and its applicability. But I guess I can't really comment further at this time, Paul.

Marty Lyons:

You bet. Thank you. See you soon.

Anthony Crowdell:

Hey, good morning. Thanks for squeezing me in. Just hopefully an easy one. You talked a lot about the financing plan. It seems like it's intact. A lot of capital opportunities, rate base opportunities. I'm just wondering what do you think is the most challenging part of the play that you have?

Marty Lyons:

No, I think that's well covered. Anthony, any other questions?

Marty Lyons:

Look forward to seeing you.

Operator:

Mr. Lyons, there are no further questions at this time. I'd like to turn the floor back over to you for closing comments.

Operator:

This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.

Operator:

Greetings and welcome to Ameren Corporation's Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons:

Thanks, Andrew. Good morning, everyone, and thank you for joining us today. Before we cover our second quarter earnings results, I would like to discuss a series of major storm events which occurred in late June and July and disrupted power to a significant number of our electric customers across Illinois and Missouri. Collectively, this was the worst month for storm events Ameren has experienced in approximately 15-years. I would like to thank our customers for their patience as we work to restore their power. I'm also grateful for and proud of the Ameren team. Importantly, our team worked hundreds of thousands of man hours in challenging conditions with no significant employee injuries. These outages emphasize why we believe continued investment in grid reliability and resiliency remains as important and necessary as ever for our customers, which brings me to page four. Our dedicated team will continue to execute our strategic plan across all of our business segments, which entails proactively investing in energy infrastructure to deliver safe, reliable, clean, and affordable electric and natural gas services to our customers. And moving to page five. Our strategic plan, integrates our strong sustainability value proposition, balancing the four pillars of environmental stewardship, positive social impact, strong governance, and sustainable growth. Here we summarize some of the many things we are doing for our customers, communities, co-workers, and shareholders. And today, we published our updated sustainability investor presentation called Leading the Way to a Sustainable Energy Future, available at amereninvestors.com, which more fully details how we have been effectively integrating our sustainability values and practices into our corporate strategy. I encourage you to take some time to read more about our strong sustainability value proposition. Turning to page six. Yesterday, we announced second quarter 2023 earnings of $0.90 per share, compared to earnings of $0.80 per share in the second quarter of 2022. The key drivers of our second quarter results are outlined on this slide. As a result of our strong execution in the first-half of the year, I'm pleased to report that we remain on track to deliver within our 2023 earnings guidance range of $4.25 per share to $4.45 per share. Moving to page seven. On our call in February, I highlighted some of our key strategic business objectives for 2023. We continue to make great progress as a result of our team's dedication. Outlined on page eight, are a few key accomplishments this quarter. As you can see on the right side of this page, we've invested significant capital in each of our business segments during the first-half of this year, increasing spending nearly 20%, compared to the year ago period. These investments will continue to improve the reliability, resiliency, safety, and efficiency of our system as we make a clean energy transition for the benefit of our customers. During these first six months of the year, Ameren Missouri installed over 175,000 smart meters, 147 smart switches, and 32 underground cable miles and energized eight upgraded substations. Over 75% of our Ameren Missouri electric customers now have smart meters, allowing for better understanding of energy usage and choice amongst several time-of-use rates offered. In Illinois, our customers are benefiting from over 3,700 new or reinforced electric poles and 91 new smart switches on electric distribution circuits year-to-date, and we continue to focus on replacing mechanically-coupled gas service pipes. Further, our transmission business completed a total of 117 projects in the first-half of the year, including line rebuilds, new transmission circuits, transformer replacements, generator interconnections, and other upgrades to aging infrastructure, supporting the economic delivery of renewable energy resources for our customers, as well as the overall resiliency of the transmission system. This includes the transmission portion of our Intelligrid program which was completed this spring. Ameren's Intelligrid network is a safe and secure private telecommunications network, which enables the full functionality of smart grid technologies, giving Ameren greater awareness of system conditions, potentially reducing outage frequencies, and durations to milliseconds instead of minutes or hours. As a result, it will reduce costs and wait times for customers. I'd like to express my appreciation for the Ameren team's dedication, hard work, and collaboration so far this year to deliver value for our customers. Moving on to regulatory matters. In June, the Missouri Public Service Commission approved constructive settlement terms of the Ameren Missouri electric rate review, which called for a $140 million annual revenue increase. New customer rates were effective July 9, representing an increase of approximately 2% compounded annually since April 1, 2017 prior to Ameren Missouri adopting plant-in-service accounting, or PISA. PISA, which is effective through at least 2028, allows Ameren Missouri to make meaningful and timely infrastructure investments, providing significant benefits to our customers. We also continue to make progress on the clean energy transition through the addition of solar to our generation portfolio. Moving to Ameren Illinois. Our team has been working diligently with key stakeholders in our ongoing electric distribution multi-year rate plan, or MYRP, and natural gas rate reviews. We filed rebuttal -- answer rebuttal testimony in June and July, respectively, and are encouraged by the constructive progress made to date. Michael will discuss these in more detail in a moment. In June, the Ameren Illinois beneficial electrification plan approved by the commission in March was updated to include $65 million through 2025 for programs, incentives, and rates encouraging electric vehicle adoption and infrastructure development. In legislative matters, we were supportive of the transmission efficiency and cooperation law, or House Bill 3445, which was passed by the Illinois General Assembly in May. This bill would support timely and cost-effective construction of transmission projects, which I will touch on more on the next slide. Moving onto operational matters. We remain focused on keeping customer bills as low as possible through disciplined cost management, continuous improvement, and optimizing our operating performance as we transform our business through investment to ensure we sustainably provide safe, reliable, and cleaner energy for our customers. Finally, in early May, the Callaway Energy Center was brought back online following a brief planned maintenance outage, which was completed safely and on schedule. The next scheduled Callaway refueling and maintenance outage is planned for this fall. Turning to page nine. As I just mentioned, in May, the Illinois General Assembly passed House Bill 3445 or the transmission efficiency and cooperation law which, if enacted, would provide incumbent utilities, including Ameren, the right of first refusal to build MISO long-range transmission planning projects approved by year end 2024. If enacted, HB 3445 will support the clean energy transition, benefiting our Illinois customers and communities and the broader MISO region. As the local utility, we believe we are well-positioned to efficiently build, operate, and maintain these transmission assets over time. The right of first refusal allows for the construction process to begin sooner and the resulting customer benefits to be realized much quicker. Importantly, we competitively bid each component of our projects and utilized local suppliers and contractors who support the local economy. In addition, we have long-term relationships with key stakeholders in the region and work closely with landowners and communities when citing transmission lines. The bill supports the timely and cost-effective construction of the MISO long-range transmission projects, including one Tranche 1 project approved in July 2022 and Tranche 2 projects expected to be approved in the first-half of 2024. The legislation was sent to the Governor for signature on June 22, who has until August 21 to sign, veto, or abstain from acting on the bill. Should the Governor abstain, the bill will automatically become law. Turning to page 10. As we've discussed in the past, MISO completed a study outlining a potential road map of transmission projects through 2039. Detailed project planning, design work, and procurement for the Tranche 1 projects assigned to Ameren is underway, and we expect construction to begin in 2026. MISO requests for a proposal for its estimated $700 million of Tranche 1 competitive projects have been issued. We submitted our first bid related to the Orient-Denny-Fairport in May. The remaining two bids are due in October and November of this year. The proposal and evaluation process for the competitive projects is expected to take place over the course of 2023 and into mid-2024. Looking ahead to Tranche 2, MISO's analysis of potential projects is well underway and will continue for the remainder of the year and into next year. MISO anticipates the Tranche 2 portfolio of projects will be approved in the first-half of 2024. Continued investment in transmission is needed to facilitate the transfer capability of energy across the region as more dispatchable generation retires and renewables come online. On another matter related to MISO, an independent review was completed in July at the request of the ICC, which evaluated the benefits of Ameren Illinois' continued participation in MISO, compared to the PJM Interconnection regional transmission organization. The study considered reliability, resource adequacy, resiliency, affordability, equity, environmental impact, and general health, safety and welfare of Illinois residents. In conclusion, the independent consultant determine that Ameren Illinois remaining in MISO avoids significant economic costs for the customers of Ameren Illinois and Illinois residents more broadly. Before moving on, I'm happy to say that the Illinois Power Agency's procurement events this past May, which set energy and capacity prices from June 1, 2023 through May 31, 2024, resulted in significantly lower prices compared to last year. In fact, we expect a decline of over 25% in Ameren Illinois' Basic Generation Service rate. For customers taking power from Ameren Illinois, assuming normal weather, this could result in double-digit percentage decreases on their overall electric bill providing welcome relief for customers. Moving now to page 11. As laid out in our June 2022 Missouri Integrated Resource Plan, or IRP, we're taking a thoughtful and measured approach to investing in new generation as our older energy centers near retirement. In support of this transition, we were pleased with the Missouri PSC approvals of certificates of convenience and necessity, or CCNs, for the Huck Finn Solar Project in February and the Boomtown Solar Project in April. Construction of Boomtown began in July and construction of Huck Finn is expected to begin in October. In June, we filed with the Missouri PSC for four additional CCNs totaling 550 megawatts of new solar generation across our service territory. These projects support our ongoing generation transformation, which calls for adding 2,800 megawatts of renewable generation by 2030, while maintaining the reliability and affordability our customers expect. These projects will bring over 900 new construction jobs and additional tax revenues and other payments to the area. Subject to approval, these solar projects are expected to go in service between 2024 and 2026. While the Missouri PSC is under no deadline to issue an order on these CCN filings, we expect decisions in the first quarter of 2024. Ameren Missouri is in the process of finalizing its next IRP, and we look forward to filing it with the Missouri PSC by the end of September. We believe the plan filed in 2022 includes a balanced and measured approach to adding renewables over time. As we continue the transition to a cleaner and more diverse generation portfolio, we are focused on reliability of the system, in particular in the hot summer and cold winter months. As a result, we are evaluating the need for more dispatchable energy prior to 2030, which is also consistent with MISO's view of future generation capacity needs in our region. On page 12, we look ahead to the next decade. We have a robust pipeline of investment opportunities, totaling more than $48 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter, and cleaner. Of course, our investments also create thousands of jobs for our local economies. Maintaining constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs and delivering on our customers' expectations. Turning to page 13. In February, we updated our five-year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2023 through 2027. This earnings growth is primarily driven by our strong compound annual rate base growth of 8.4%, supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. Combined, we expect to deliver strong long-term earnings and dividend growth, resulting in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done. Again, thank you, all, for joining us today, and I will now turn the call over to Michael.

Operator:

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Julien Dumoulin-Smith with Bank of America. Please proceed with your question.

Michael Moehn:

Yes. Hey, good morning, Julien. I appreciate the question. This is Michael. Yes, from an overall amount, I mean, again, we provide that book value of $550 million, again, this will be probably a year from now. But you should think roughly in those lines. I mean, around $500 million would be some depreciation, etc., that will occur. There's couple of items that get incorporate into that like inventory, etc. But around $500 million. And I think as we've talked about in the past and then we have a lot of flexibility here in terms of what we do with that, in terms of additional investments. It's really not restricted. It just really needs to go back into infrastructure. We obviously can use it to buyback, debt, and other things as well. But I mean given our capital plan, there's lots to do there. I think from a timing perspective, that's what -- we're being very thoughtful about trying to determine the actual retirement date itself, get this well in advance of that to give us plenty of time to make sure that we continue to replace that rate base over time and avoid any sort of earnings hit there. Hopefully, that helps.

Marty Lyons:

Hey, Julien. This is Marty. Hey, thanks, again, for your questions. Just to first tack on to what Michael said and then answer some of your specific questions, but when we planned out our capital expenditures for this five years and we looked at the timing and amount on a year-by-year basis, we were thoughtful about the potential timing of this Rush Island closure and securitization filing. And so, within that, we had already timed some of our capital expenditures in a thoughtful manner to, as Michael said, ensure that as Rush Island comes out of rate base, that we don't have any kink, if you will, in the trajectory of our rate base growth and our earnings growth. So, some of that's already baked into our plan, Julien, I guess, first and foremost. Now you did ask about some of the transmission investment, and specifically about, the legislation coming through Illinois, the transmission efficiency and cooperation law, which was HB 3445 that you referenced. There, as we explained in our prepared remarks, the General Assembly passed that legislation in May of this year. And now it's really on the Governor's desk for his potential signature. So, it got to the Governor on -- in late June, June 22, and he has 60-days, which means the decision deadline for the Governor is August 21. And if you were to sign that, that would mean that the one Tranche 1 project in Illinois would come to us, and then any Tranche 2 projects that were approved in the first-half of '24, that's our expectation, but anytime in 2024 would also come to us as the incumbent transmission owner. Now, the Governor has expressed some concerns about that legislation. So, it's unsure what actions he will take. I'll tell you that supporters of the bill, including ourselves, continue to share the benefits of the legislation and hopefully address his concerns. If he signs the law, obviously, the bill obviously becomes law. And as we mentioned in our prepared remarks, if he takes no action, that bill becomes law as well. So, we'll see what action he ultimately takes. But we continue to believe that, that right of first refusal is really in the best interests of our customers and the residents of the State of Illinois. Then you just mentioned on overall what MISO is doing in terms of these projects. Again, as you know, MISO is evaluating what projects might come out of Tranche 2. I will say there that we continue to believe that the work that they're doing point to an overall portfolio that would be larger than what they approved in part of Tranche 1. And that's really because, as they've gone through this analysis, one of the things, obviously, that's come to fruition is the IRA legislation in D.C., which means that we expect more renewables than had previously been expected. And so, MISO is planning towards something that's between sort of a Future 2 and Future 3. And again, we expect that they'll continue to work through that. It's premature to say exactly how large that portfolio will be or exactly what transmission projects may fall into our service territories in Illinois or Missouri. But MISO continues to believe that they'll approve those projects in the first half of next year.

Marty Lyons:

Thanks, Julien.

Operator:

Our next question comes from Paul Patterson with Glenrock Associates. Please proceed with your question.

Marty Lyons:

Good morning, Paul.

Marty Lyons:

Julien -- or, sorry, Paul, I apologize. Paul, it's a -- yes, it's okay. I apologize, again. But look, it's -- some of the actions that have been taken in various states seem to be particular to the way that legislation was passed or -- and so, look, we're going to continue to pursue it. We think that if the Governor were to sign this into law, it would be applicable and applicable too, as we've said before, both to MISO Tranche 1 projects, as well as Tranche 2 projects that are approved in 2024. So, look, I guess, time will tell, but I think that as we sit here today, we think this would stand.

Marty Lyons:

I do believe that.

Marty Lyons:

Thanks, Paul.

Jeremy Tonet:

Hi, good morning.

Michael Moehn:

Hey, Jeremy.

Marty Lyons:

Yes. I think that maybe I'll start and perhaps Michael would want to tack on here as well. This is Marty. I think what you heard in our prepared remarks, again, is that we really feel like we're working constructively with stakeholders as we work through this process. Of course, this is the first multi-year grid and multi-year rate filing. And so, as to be expected, you're going have to work through some of the mechanics. But ultimately, I still believe that we're going to get to a constructive outcome, something that accomplishes the policy goals that [CEJA] (ph) had for the state. And you'll notice that when we started this -- down this path and direct testimony, the ICC staff's recommendation was about 56% of our overall ask. And through the rounds of testimony and additional support that we've been able to provide with the staff, we've been able to work constructively with them to were there suggested revenue increase now is about 70% of our request. So, we've made positive progress there. In our slides, we detailed that there's still a difference between our recommended -- or, requested cumulative increase in that recommended by the staff. And that difference is about $131 million over that four-year period. And we broke down some of the components for you. So, look, we're going to continue to work constructively with stakeholders. And like I said, I think we'll be able to get to a constructive outcome. And importantly, that accomplishes the policy goals of CEJA. So, I don't know if you have any more specific questions, or Michael, you want to add something?

Jeremy Tonet:

Got it. That's very helpful. And maybe a follow-up to peel back a little bit more, if I can, if there is anything left that can be said here. Just specifically with regards to your rebuttal strategy on the notably lower-than-expected ROE, the $700 million capital discrepancy, $100 million medical OPEB overfunded balance. Just wondering if you could speak to any changes in receptivity overall given Ameren's rebuttal?

Jeremy Tonet:

Got it. That's very helpful. One just quick last one, if I could. With the decrease in energy prices, as we've seen, has bid pressure kind of faded from the conversations with the public and policymakers? Or is it still front of mind in discussions?

Jeremy Tonet:

Got it. That makes sense. That’s helpful. I’ll leave it there. Thanks.

Operator:

Our next question comes from Sophie Karp with KeyBanc Capital Markets. Please proceed with your question.

Marty Lyons:

Yes. Sophie, this is Marty. One of the things CEJA called for in the legislation was that the cost of equity be determined consistent with commission practice and law. And we believe that means the use of traditional methods like capital asset pricing model, discounted cash flow analysis, IEIMA which was the prior legislation, had some very explicit language that required the use of formulaic. So we've certainly argued that the intent of CEJA was for the commission to use its traditional methodology. And I would note there that the staff and their testimony as part of the multiyear rate plan, instead of that traditional CAPM and DCF kind of analysis was used that they would get an ROE of about 10.02 as a recommendation. And of course, in our gas rate case that's pending, the staff there recommending a 9.89. So at the end of the day, that's what we're hanging our head on is that we believe that CEJA called for the use of that kind of methodology.

Marty Lyons:

Yes. Sophie, it certainly does. So as you saw in our slides in terms of our build-out, we do plan to have projects that are build transfer agreements that are built by developers, projects that are developed to a certain point and then we procure them and finalize the construction ourselves and then some self-build. And certainly, we're taking a host of considerations into account when we look at where these projects are being built and what they're being built with. And so if we can take advantage of a site that provides us with incremental tax credit opportunities, we'll do that. If we can take advantage of procurement strategies that -- resources that allow us to maximize the value of credits, we're going to do that. So at the end of the day, our goal with this is to build a portfolio of projects that really provides a good diversity, low cost for our customers, reliability for our customers. And we'll look to maximize those tax credits to the extent possible to again deliver the lowest present value of revenue requirements for our customers.

Michael Moehn:

Ultimately, I think it's a combination of both, Sophie. I mean, we're not sitting on a lot of credit today. But I mean, as we build into these, certainly again we'll be very thoughtful about. We've been very involved in these issues on transferability and get a clarification working through some of these rating agency issues, et cetera. But I absolutely think that it could be a combination of both as we move forward.

Michael Moehn:

You bet. Thanks.

Julien Dumoulin-Smith:

Hey, guys. I was worried it was going to end earlier. I wanted to squeeze in a couple here. Look, I wanted to come back to what was being discussed on Illinois real quickly. Do you have any thoughts about Illinois gas here? I know that's very preliminary, but it seems like there could be some conversations going into '24 on perhaps reform that might look akin to Colorado or something like that, But you -- or Minnesota at that. But you guys tell me, what are you guys hearing or seeing on any front there.

Julien Dumoulin-Smith:

All right. Fair enough. And obviously, you've got these new CCNs going on the Missouri side. Just any lessons learned from Boomtown, Huck, et cetera?

Julien Dumoulin-Smith:

Awesome. Alright, guys. Super quick. Thank you.

Operator:

It appears that there are no further questions at this time. I would now like to turn the floor back over to Marty Lyons for closing remarks.

Operator:

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation's First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons:

Thanks, Andrew. Good morning, everyone, and thank you for joining us today as we discuss our first quarter 2023 earnings results. Our dedicated team continues to successfully execute on our strategic plan across all of our business segments allowing us to consistently deliver for our customers, shareholders and the environment while laying a strong foundation for the future. And as shown on Page 5, our strategic plan integrates our strong sustainability value proposition balancing the four pillars of environmental stewardship, social impact, governance and sustainable growth. These areas of focus incorporate our carbon reduction goals which are consistent with the objective of the Paris Agreement to limit global temperature rise to 1.5 degrees Celsius. Here we also highlight a few of the many items we are doing for our customers and communities including being an industry leader in diversity equity and inclusion. We are honored that earlier this week DiversityInc named Ameren to its Hall of Fame, the first utility and only 11th company to be added. DiversityInc also recognized Ameren as a top company among all industries for ESG supplier diversity, philanthropy and employee resource groups or ERGs. For more than two decades, our team has made an explicit commitment to fostering diversity equity and inclusion within our company and in the communities we serve. It is a value that we believe is foundational to our mission to power the quality of life. We look forward to sharing best practices with other companies as we all work together to create vibrant cultures and communities. Further, our strong corporate governance is led by a diverse Board of Directors focused on overseeing the execution of our strategic plan in a sustainable manner. Finally, this page summarizes our sustainable growth proposition which remains among the best in the industry. As mentioned on our call in February, we have a robust pipeline of over $48 billion of investment opportunities to continue to modernize the grid and enable the transition to a cleaner energy future. Today, we published our updated sustainability investor presentation called Leading The Way to a Sustainable Energy Future. It's available at amereninvestors.com which demonstrates how we have been effectively integrating our sustainability values and practices into our corporate strategy. I encourage you to take some time to read more about our strong sustainability value proposition. Turning now to Page 6. Yesterday, we announced first quarter 2023 earnings of $1 per share compared to earnings of $0.97 per share in the first quarter of 2022. The key drivers of our first quarter results are outlined on this slide. As a result of our strong execution in the first quarter, I'm pleased to report that we remain on track to deliver within our 2023 earnings guidance range of $4.25 per share to $4.45 per share. Moving to Page 7. On our call in February, I highlighted some of the key strategic business objectives for 2023. We have been laser-focused on achieving these objectives. On Page 8, we outlined several of our key accomplishments to date. As you can see on the right side of this page, we have invested significant capital in each of our business segments during the first three months of this year. These investments will continue to improve reliability, resiliency, safety and efficiency of service to our customers. During the quarter, Ameren Missouri installed over 74,000 smart meters, 84 smart switches and 19 underground cable miles and energized one upgraded substation. In Illinois, our customers are benefiting from almost 1,600 new or reinforced electric poles and 36 new smart switches on electric distribution circuits as we continue to focus on replacing mechanically coupled gas service pipes. Further, our transmission business is expected to complete 40 new or upgraded transmission substations and 120 miles of new or upgraded transmission lines in the first half of the year. I'd like to express my appreciation for the Ameren team's dedication and hard work to start the year. It is worth noting that all of these system improvements were accomplished despite several major and minor storm events including tornadoes, which our teams responded to safely and rapidly to restore service to impacted customers. I am pleased to say that 97% of customers that lost power as a result of these storms saw service restored within 24 hours. Thank you again for your dedication to our customers and communities. Moving on to regulatory matters. We are pleased with the constructive settlement of the Ameren Missouri Electric rate review in April. The stipulation and agreement calls for $140 million annual revenue increase and is subject to Missouri Public Service Commission approval. If approved, residential customer rates will have increased approximately 2% compounded annually since April 1, 2017 prior to Ameren Missouri opting into plant and service accounting. This constructive regulatory framework which is effective through at least 2028 continues to allow Ameren Missouri to make meaningful infrastructure investments providing significant benefits to customers. These investments have contributed to a 12% improvement in reliability for Ameren Missouri customers since 2017. We've achieved additional constructive regulatory outcomes this year in Missouri and Illinois related to our clean energy transition, which I'll touch on more in a moment. Moving on to operational matters. To ensure strong operational performance over the coming summer months, last week we initiated a planned maintenance outage on the generator at the Callaway Energy Center. We expect the energy center to be back online next week. Finally, we remain focused on keeping customer bills as low as possible through disciplined cost management, continuous improvement and optimizing our operating performance as we transform our business through investment to ensure we sustainably provide safe, reliable, resilient and cleaner energy for our customers. Moving to page 9. As we've discussed in the past, MISO completed a study outlining a potential road map of transmission projects through 2039. Detail project planning, design work and procurement for the $1.8 billion of Tranche 1 projects assigned to Ameren is underway. MISO's request for proposal on the remaining $700 million of competitive projects in Missouri and Illinois have begun to be issued and we are in the process of preparing our proposals. We expect to submit our first bid relating to the Orient - Denny - Fairport line later this month. The proposal and evaluation process for the three competitive projects is expected to take place over the course of 2023 and into mid-2024. Looking ahead to Tranche 2, MISO's analysis of potential projects is well underway and will continue for the remainder of the year and into early next year. MISO anticipates the Tranche 2 portfolios of projects will be approved in the first half of 2024. Moving now to page 10. In February and April, the Missouri PSC approved certificates of convenience and necessity or CCNs for two Ameren Missouri's solar projects, the Huck Finn Solar Project located in Missouri and the Boomtown Solar Project in Illinois. The Huck Finn project which will support compliance with the Missouri Renewable Energy Standard will be our largest solar project to date. Construction of this facility is expected to create approximately 250 jobs. And once in operation, it will produce enough energy to power approximately 40,000 homes. In addition in April, the Missouri PSC approved Ameren Missouri's Renewable Solutions Program, which will be supported by the 150-megawatt Boomtown project. This subscription-based program is available to midsized and large commercial and industrial customers and municipalities across Missouri. Participating organizations can enroll for up to 100% of their future energy needs to meet their own renewable goals. 10 organizations are the initial participants in this innovative program, which is fully subscribed. Further I'm excited to say Ameren Missouri has entered into an engineering, supply and construction agreement to construct the 50-megawatt Vandalia Solar Project located in Central Missouri. This project represents the first larger-scale renewable energy center that will be fully developed and built by Ameren Missouri. We expect to file for a CCN for this project with the Missouri PSC midyear. We expect to announce additional solar energy projects in the next few months. These renewable projects are consistent with Ameren Missouri's Integrated Resource Plan, which includes a thoughtful and measured approach to transition our generation portfolio. Turning to page 11. I will cover progress being made in both Illinois and Missouri to provide incentive supporting investment infrastructure that will enable advancement of electric vehicles or EVs across our service territory and in our region. We continue to see electric vehicle adoption advanced in our region and expect further growth as a result of our EV programs in both states in addition to increased state and federal funding. In March, the ICC approved Ameren Illinois' beneficial electrification program, which expands on its existing electric vehicle charging program and provides at least $27 million through 2025 for programs, incentives and rates encouraging EV adoption and infrastructure development with a focus on equity and low-income customers. Through this plan, we will also support the governor's goal of having one million electric vehicles on the road in Illinois by 2030. In Missouri, the PSC approved our Charge Ahead Program in 2020 and extended it in 2022. This $11 million program aims to eliminate barriers and incentivize electric vehicle adoption. This includes the addition of approximately 1,800 public workplaces and multi-dwelling charging ports by 2024. Along the Missouri highway corridors, 14 fast-charging stations are already in operation as part of this program. In addition, we are participating in and supporting the Edison Electric Institute's National Corridor Charging initiative. We believe strong adoption of electric vehicles will provide benefits for our customers including lower rates due to load growth and importantly advance the clean energy transition. Moving to page 12. Looking ahead over the next decade, we have a robust pipeline of investment opportunities of $48 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. Of course, our investments also create thousands of jobs for our local economies. Maintaining constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs and delivering on our customers' expectations. Turning to page 13. In February, we updated our five-year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2023 through 2027. This earnings growth is primarily driven by strong compound annual rate base growth of 8.4% supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. Combined, we expect to deliver strong, long-term earnings and dividend growth, resulting in an attractive total return that compares favorably with our regulated utility peers. I am confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done. Again thank you all for joining us today. I will now turn the call over to Michael.

Operator:

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is from Jeremy Tonet with JPMorgan. Please proceed with your question.

Marty Lyons:

Yes. Look, you're right we've got just a little bit of time left, the legislative session. This is Marty Lyons by the way ends on May 12 at 6:00 p.m. And we have been supportive of right of first refusal legislation that's been moving along in the legislature. And so, you've probably been following House Bill 992 and Senate Bill 568 and we certainly support the legislative efforts there. Both bills have been heard in committees and we'll see whether there's any action on those bills as we approach the end of the session. So, we again, continue to believe that right of first refusal legislation is a positive. It certainly would allow transmission infrastructure to be built more rapidly in our state and at a cost competitive level. So, we're very supportive of that. We'll see whether it gets through. It's hard to predict any piece of legislation, whether it will go through, given the various priorities the legislature has. But in terms of the latter part of your question, whether that's influencing our thoughts on any of our path forward, I would say, no. As we look ahead, we continue to invest in a reliable clean energy transition, meaning, both reliable energy delivery infrastructure, renewable energy, as well as transmission. So, we'll continue to pursue those things. We do think things like right of first refusal are important to make sure that that infrastructure build-out can happen efficiently and effectively and maintain a good reliable system. But we'll keep forging forward, so thanks for your question.

Operator:

[Operator Instructions] Mr. Lyons, there are no further questions at this time. I'd like to turn the floor back over to you for closing comments.

Operator:

This concludes today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation's Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today's call, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Marty Lyons:

Thanks, Andrew, and welcome back. We're thrilled that you're healthy again and here with us for this call and ready to fully engage with our investors and the analysts. Good morning, everyone, and thank you for joining us today as we reflect on our 2022 performance and look ahead to 2023 and beyond. I'd like to start by expressing appreciation for the Ameren team's dedication and hard work over the last year. In 2022, we continued to successfully execute our long-term strategy, as shown on Page 4, which is delivering strong results today while laying a strong foundation for the future. Shown on Page 5 are some exciting strategic achievements from the past year for Ameren, our customers, shareholders, the environment and the industry as a whole. Let me touch on a few key accomplishments. We made $3.4 billion of infrastructure investments in 2022 that resulted in a more reliable, resilient, secure and cleaner energy grid, as well as contributed to strong growth at all of our business segments. For example, as part of our Ameren Missouri Smart Energy Plan, over 400 smart switches were installed to reduce outages from hours to minutes and even seconds, and 34 substations were upgraded or built new to better serve communities. In addition, over 300,000 smart meters were installed for our Missouri customers, enabling better visibility into their energy usage. In Illinois, our customers are benefiting from the replacement of more than 3,000 electric poles, 64 miles of coupled steel distribution pipelines and 24 miles of gas transmission pipelines. Further, our transmission business placed in service 19 new or upgraded transmission substations and approximately 200 miles of new or upgraded transmission lines. These are just a few of the many projects completed in 2022. As a result of these and similar investments, I'm proud to say that Ameren's most recent system average interruption frequency reliability scores have ranked in the top quartile of our industry. We also had several achievements on the regulatory and legislative front. In February, new Ameren Missouri Electric Service rates took effect as a result of our 2021 rate review, which was constructively settled. In June, we filed a change to our integrated resource plan, accelerating our planned clean energy investments, carbon emission reduction goals and our plan to achieve net-zero by 2045 while thoughtfully considering customer affordability and energy grid reliability. In July, our pipeline of investments was significantly enhanced when the Mid-Continent Independent System Operator, or MISO, approved a portfolio of long-range transmission projects, including significant projects in our operating footprint. And in August, Senate Bill 745 was enacted in Missouri, extending the constructive smart energy plan legislation that became law in 2018 out through 2028, with possible extension to 2033. I’m pleased to say that a result – as a result of these developments, in 2022, we were able to increase our 10-year investment opportunity pipeline from $40 billion to $48 billion. Further, in our Ameren Illinois Electric Distribution business, in September, the Illinois Commerce Commission, or ICC, approved constructive performance metrics, which paved the way for our multiyear rate plan filing this January. And finally, at the federal level, passage of the inflation Reduction Act will support the clean energy transition, reducing the cost of related infrastructure investments for both our customers in both Missouri and Illinois. I would like to express appreciation for all the hard work of the entire Ameren team to advance these important achievements. At the same time, across Ameren, we are all working to keep customer bills as low as possible while investing to ensure we provide safe, reliable and cleaner energy for our customers. We remain laser-focused on disciplined cost management, practicing continuous improvement and optimizing our operating performance as we transform our business. In 2022, we continued our transition to a cleaner energy generation portfolio, and as planned in December, we retired our oldest and least-efficient coal-fired plant, the Meramec Energy Center. Thank you to all of our coworkers who have worked at Meramec providing reliable energy over the past several decades. We recognize that our customers depend on us every day to supply the energy that supports their daily lives, and as such, we have kept them at the center of our strategy. We are honored that in 2022 and for the third consecutive year, our residential customers have recognized Ameren with a top-quartile overall customer satisfaction ranking among large electric utility providers in the Midwest. In addition, Ameren Missouri ranked number one in business customer satisfaction. And finally, for our shareholders. Yesterday, we announced 2022 earnings of $4.14 per share compared to earnings of $3.84 per share in 2021. This result was at the high end of our earnings per share guidance range. The strong execution of our strategy in 2022 reflects strategic alignment across all of our business segments. We are staying focused on optimizing our operations and safely completing billions of dollars of value-adding projects to deliver significant value to our customers, communities, shareholders and the environment. Turning now to Page 6. Here, you can see we have delivered consistent superior value to our shareholders for nearly a decade. Since 2013, our weather-normalized core earnings per share have risen 92% at an approximate 7.5% compound annual growth rate, while our annual dividends paid per share have increased approximately 48% over the same time period. This drove a strong total return of nearly 226% for our shareholders from 2013 to 2022, which was significantly above our utility peer average. While I am very pleased with our track record of strong and consistent performance, rest assured that we are not letting up. Our team will remain focused on enhancing performance in 2023 and in the years ahead so that we can continue to deliver superior value to our customers, communities and shareholders. Turning to Page 7. This page summarizes our strong sustainability value proposition and focus on environmental, social, governance and sustainable growth goals and reflects the way we integrate our sustainability values into our normal course of business. Beginning with environmental stewardship. Last June, we announced an acceleration of our transformational generation resource plan, now aiming to achieve net-zero Scope 1 and 2 carbon emissions by 2045 and across all of our operations in Missouri and Illinois, which is consistent with the objectives of the Paris Agreement and limiting global temperature rise to 1.5 degrees Celsius. This plan also advances our interim greenhouse gas emission reduction targets to 60% and 85% below 2005 levels by 2030 and 2040, respectively. As mentioned, in 2022, we were assigned certain projects as part of the Tranche 1 project portfolio to prospectively build and operate significant transmission investments in MISO territory. These as well as other transmission investments will provide our region access to a diverse mix of energy resources and are an important step forward to support a smooth clean energy transition. We also have a strong long-term commitment to our customers and communities to be socially responsible and economically impactful. One example is our effort to drive inclusive economic growth at Ameren and in our communities. In 2022, we spent approximately $1.1 billion with diverse suppliers, including minority, women and veteran-owned businesses, a 22% increase over 2021. Because of actions like this, in May, we were honored to be recognized again by Diversity Inc. as number one on the nation's top utilities list for diversity, equity and inclusion. This is the 14th consecutive year we have been named to this distinguished list. I am also very pleased to say that Ameren was named a top company for ESG for the third consecutive year. In addition, we continue to support many nonprofit organizations in the communities we serve, including programs focused on DE&I, to which, we have made a $10 million contribution commitment by 2025. Moving to governance. Our strong corporate governance is led by a diverse Board of Directors focused on strong oversight of our sustainability efforts. In 2022, we named our first combined Chief Sustainability, Diversity and Philanthropy Officer to further optimize our initiatives. And our executive compensation practices include performance metrics that are tied to diversity, equity, inclusion and progress toward a clean energy future for all. Finally, this slide summarizes our very strong sustainable growth proposition, which we believe remains among the best in the industry. Today, we published our updated sustainability investor presentation called Leading the Way to a Sustainable Energy Future, which is available at amereninvestors.com. It demonstrates how we have been effectively integrating our sustainability values and practices into our corporate strategy. I encourage you to take some time to read more about our strong sustainability value proposition. Moving to Page 8, we turn our focus to the current year. We expect 2023 to be another busy year, and we are excited about a number of strategic objectives. Notably, we will maintain our focus on significant infrastructure investment for the benefit of our customers. We expect to invest approximately $3.5 billion in electric, natural gas and transmission infrastructure to bolster safety, security, reliability, resiliency and further the clean energy transition in a responsible fashion. And as the nation's clean energy transition continues, we plan to help develop the needed transmission investment by submitting bids for the MISO Tranche 1 competitive long-range transmission projects as well as support analysis of potential Tranche 2 projects. We have an active regulatory calendar this year. We look to constructively conclude our Ameren Missouri electric rate review Ameren Illinois Electric multiyear rate plan and Ameren Illinois natural gas rate review. We will also work to successfully advocate for certificates of convenience and necessity for future renewable generation at Ameren Missouri. And our next Ameren Missouri integrated resource plan will be filed in September, which will include a comprehensive update of assumptions, including changes driven by the inflation Reduction Act enacted last year. Finally, we are focused on maintaining disciplined cost management with the expectation of holding operations and maintenance expenses flat in 2023 relative to 2022. Moving now to Page 9. I Yesterday afternoon, we announced that we expect our 2023 earnings to be in a range of $4.25 to $4.45 per share. Based on the midpoint of the range, this represents 7% earnings per share growth compared to the midpoint of our original 2022 guidance range of $4.05 per share. Michael will provide you with more details on our 2023 guidance a bit later. Building on the strong execution of our strategy and our robust earnings growth over the past several years, we expect to deliver 6% to 8% compound annual earnings per share growth from 2023 through 2027 using the midpoint of our 2023 guidance, $4.35 per share, as the base. Our dividend is another important element of our strong total shareholder return proposition. Last week, Ameren's Board of Directors approved a quarterly dividend increase of approximately 7%, resulting in an annualized dividend rate of $2.52 per share. This represents our third consecutive year of approximately 7% dividend growth, and the increase reflects confidence by Ameren's Board of Directors in our business outlook and management's ability to execute our strategy. Looking ahead, we expect Ameren's future dividend growth to be in line with our long-term earnings per share growth expectations and within a payout ratio range of 55% to 70%. We expect our weather-normalized dividend payout ratio in 2023 to be approximately 58%. I have full confidence in our team as we look ahead. Turning to Page 10. The strong long-term earnings growth I just discussed is primarily the result of rate base growth driven by investment in energy infrastructure under constructive regulatory frameworks. Today, we are rolling forward our five-year investment plan. And as you can see, we expect to grow our rate base at an approximate 8% compound annual rate for the 2022 through 2027 period. Our robust capital plan of approximately $19.7 billion over the next 5 years will deliver significant value to our customers and the communities we serve. Our plan includes strategically allocating capital to all four of our business segments, and importantly, includes investment in a signed MISO long-range transmission planning projects of approximately $800 million and renewable energy projects of approximately $2.5 billion through 2027. Finally, we remain focused on disciplined cost management to keep customer bills as low as possible and improved earned returns in all of our businesses. Moving to Page 11. As we look to the future, our 5-year plan is not only focused on delivering strong results through 2027, but is also designed to position Ameren for success over the next decade and beyond. The right side of this page shows that our allocation of capital is expected to grow our electric and natural gas energy delivery investments to be 81% of our rate base by the end of 2027. Incorporating renewable investment opportunities from our latest IRP, we expect our rate base from renewable generation to grow to 11%, and for coal-fired generation to decline to just 3% of rate base by the end of 2027. In light of the Rush Island and Sue Energy Centers approaching retirement by 2025 and 2030, respectively, only approximately 3.5% of the capital expenditures in our 5-year plan are expected to be spent on coal-related projects, focusing on investments needed for safety, reliability and environmental compliance. The bottom line is that we are taking steps today across the board to position Ameren to provide safe, reliable, affordable and cleaner energy for the long term. Turning now to Page 12. Looking ahead over the next decade, we have a robust pipeline of investment opportunities of $48 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. Of course, our investment opportunities will also create thousands of jobs for our local economies. Maintaining constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country’s energy needs in the future and delivering on our customers’ expectations. Moving now to Page 13. Our investment plans released today incorporate our intentions to invest in significant renewable resources as we execute the clean energy transition laid out in our Ameren Missouri Integrated Resource Plan. Our IRP lays out the most prudent approach to systematically invest in renewable energy generation to complement existing and planned dispatchable resources, building a diverse, reliable, resilient and affordable system for our customers. We continue to work in earnest with developers to acquire renewable generation projects and expect to announce further agreements over the course of this year. We are pleased to say that last week, the Missouri PSC approved our Certificate of Convenience and Necessity for the 200-megawatt Huck Finn solar project. Construction of this facility is expected to create approximately 250 jobs, and once in operation, produce enough energy to power approximately 40,000 homes. We expect the Missouri PSC decision on a remaining pending Certificate of Convenience and Necessity for the 150-megawatt Boomtown solar project by April, though the commission is under no deadline to issue a decision. We look forward to continuing to engage with stakeholders regarding our future generation needs and clean energy transition. Moving to Slide 14. As we’ve discussed in the past, MISO completed a study outlining a potential road map of transmission projects through 2039. In July, MISO approved the first set of projects, which includes $1.8 billion assigned to Ameren. Detailed design work and project planning for the assigned Tranche 1 projects are underway. MISO requests for proposal on the remaining competitive projects have begun to be issued, and we expect the proposal and evaluation process to take place over the course of 2023 and 2024. Looking ahead to Tranche 2, analysis of potential projects is underway and will continue for the remainder of the year. MISO anticipates the Tranche 2 portfolio of projects will be approved in the first half of 2024. Moving to Page 15. As noted earlier, we remain relentlessly focused on continuous improvement and disciplined cost management. Ongoing initiatives include the automation and optimization of numerous processes leveraging the benefits from significant past and future investments in digital technologies and grid modernization. Additionally, in 2022, we extended most of our collective bargaining unit labor agreements out through mid to late 2026 for nearly all Ameren union represented employees, which will provide predictability in our labor costs in the coming years. In 2023, we expect our operations and maintenance expenses to be flat with 2022, and we are targeting flat operations and maintenance expenses through 2027. Moving to Page 16. To sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2023 and beyond will continue to deliver superior value to our customers, shareholders and the environment. We believe our expectation of 6% to 8% compound annual earnings growth from 2023 through 2027 driven by strong rate base growth compares very favorably with our regulated utility peers. I am confident in our ability to execute our strategy and investment plans across all four of our business segments as we have an experienced and dedicated team with a track record of execution that has positioned us well for future success. Further, our shares continue to offer investors an attractive dividend and the strong earnings growth expectations we outlined today position us well for future dividend growth. Simply put, we believe this results in a very attractive total return opportunity for shareholders. Again, thank you all for joining us today, and I will now turn the call over to Michael.

Operator:

[Operator Instructions] Our first question comes from the line of Nicholas Campanella with Credit Suisse. Please proceed with your question.

Andrew Kirk:

Thanks, Nick. Appreciate it.

Marty Lyons:

Yes, Nick, this is Marty Lyons. Good morning. Thanks for the question. Yes. Look, as we go into each case, we certainly are hopeful of being able to reach a constructive settlement. And as we talked about many times, we have a good history of working with stakeholders in Missouri and reaching constructive settlements. We outlined where we are in the case today in our prepared materials, you saw in the slide deck, and we outlined some of the issues that divide us today, mainly in some of the traditional areas like ROE, but also on a couple of issues like High Prairie and Rush Island energy centers, where there’s some differences between us and the staff in particular. Importantly, all of us will be updating our cases based on year-end rate base as well as other true-up items that go through December 31. So you mentioned some of the differences in rate base. Really, those are just timing differences between the staff’s rate base, which was as of June 30 and the company’s filed position, which projected through December 31. But all of those things are going to be trued up here in the coming days up through December 31. So importantly, some dates that we highlighted, a final reconciliation of the parties’ positions will be due March 30, and that comes after server bottle testimony, which is on March 13. And then evidentiary hearings of those are needed would start on April 3. So traditionally, the best time to be able to reach a constructive settlement given where this rate case is, this rate review would be end of March, early April in terms of when you might be able to really reach a constructive settlement with the parties.

Michael Moehn:

Yes. Yes, you bet, Nick. Good morning. This is Michael, A couple of things, then I’ll get specifically on that question. I mean, again, I think as we’ve talked over time, I mean, we do believe our balance sheet really provides us a position of strength here. We’ve worked hard to continue to conservatively manage it. I think we like our ratings where they are, Baa1, BBB+. We obviously have more margin at S&P than we do at Moody’s. We talked about that from time to time. We continue to target this capitalization ratio of close to 45%, which I think, again, it served us well in these various regulatory proceedings and making sure we’re maintaining these balance sheets appropriately at the subsidiaries. In terms of what we need here, you’re right. I mean, the $2.4 billion of incremental capital, I think what we continue to message along the year, as we thought about any increases in capital associated with these opportunities around LRTP or the renewables that we should continue to think about our balance sheet in a similar fashion. And I think that’s what we’re doing here, we’re laying out this incremental really $800 million of equity. There’s some obviously retained earnings in there as well, kind of gets you back to that same sort of capitalization ratio. The ATM has served us well up to this point. I mean, we’ve taken care of all of our needs for 2023, Nick. We’ve sold forward in 2023. So we’re really finished with that $300 million. We started to sell forward into 2024. You’re right that we did increase the capacity of the ATM. We’ll have to continue to evaluate that over time as we would run into any limits there. But again, it’s a really efficient way for us to issue capital. We think it’s a manageable amount if you look at it relative to our total market capitalization. So we feel comfortable with it. And again, I think that it provides us quite a bit of strength there as we just think about the overall funding that we need over the course of the next five years.

Operator:

Our next question comes from Jeremy Tonet with JPMorgan. Please proceed with your question.

Marty Lyons:

Good morning, Jeremy.

Marty Lyons:

Yes. Good morning, Jeremy, this is Marty. There’s a few questions, I think, embedded in that question. So I’ll start and perhaps Michael would want to add on. First of all, the capital expenditures that we’ve put into the plan in Missouri for the IRP really tie to the plan that we laid out in the IRP. So if you go back and you look at that overall time line, we plan to add 800 megawatts through 2025 and then another 2,000 megawatts of renewables between 2026 and 2030. And if you just do some simple math there, it’s about 400 megawatts per year. So you end up with about 1,600 megawatts overall over a five-year period. And again, we’ve put in about $2.5 billion as an estimate for that. So that’s how it lines up. We were pleased to have the commission, Missouri Public Service Commission approved the Huck Finn project, which was a 200-megawatt solar project we’d proposed, they approved that one recently at CCN. And of course, we’ve got the Boomtown project, which is a 150-megawatt solar project before them now and awaiting the decision. And we continue to work with developers on additional renewable projects to really fill out that plan that we have under the IRP, which we think is absolutely the most prudent way to move forward to provide our customers the reliable, affordable and cleaner energy that they’re seeking. Now back to the overall CapEx plan. What you’ll notice is we’ve got a $19.7 billion overall capital expenditure plan for 2023 to 2027. That compares to the one we had previously, which was 2022 to 2026, we had $17.3 billion. So we’ve added about $2.4 billion overall as we move from our prior plan to this one. And in Missouri in particular, I’d point out that we previously had $8.9 billion of planned expenditures moving now to $10.4 million, which is about a $1.5 billion overall addition. So we’ve embedded the expectation of those renewable projects getting done in the overall $10.4 million. But I would say we’ve taken a measured approach to upping our overall capital expenditure plan, which gives us great confidence in our ability to achieve it. Again, we’ve already had one renewable project approved. We’ve got a strong pipeline of capital expenditure opportunity over the next 10 years, as we’ve talked about, $48 billion and have a lot of confidence in our ability to execute, not only the $10.4 billion plan for Missouri, but the overall $19.7 billion plan we’ve laid out today.

Jeremy Tonet:

Got it. That's very helpful there. And then moving, I guess, to MISO here, what are your current thoughts on potential MISO long-range transmission planning, given MISO seems to be modeling more aggressive assumptions in light of IRA. So wondering your thoughts on the outlook there.

Jeremy Tonet:

Got it. That's very helpful. And then just kind of tying this together, you've raised CapEx. You've raised rate base growth a little bit here. I'm just wondering what you think this could mean for EPS. You don't have the 30-year, I guess, bringing fluctuations in the way that it was in the past. So as you currently look at your EPS CAGR outlook, do you see any bias within the range towards the higher parts, given this step up in CapEx and rate base here, rate base growth?

Michael Moehn:

Yes. And Jeremy, I'd just reiterate what I said. We feel very confident in our ability to be able to execute that $19.7 billion CapEx plan, which gives us confidence in our ability to execute that 8% rate base growth plan. And that underscores our confidence in the 6% to 8% EPS CAGR that we've outlined today.

Andrew Kirk:

Thanks, Jeremy. Appreciate it. Glad to hear you, too.

Julien Dumoulin-Smith:

Hey, good morning, team. Thanks for the time, appreciate the comments thus far. Maybe to follow up on Nick's question earlier, just with respect to Illinois and prospects for settling here. Any further elaborations around the new compact there? Just as you step into this, I just want to understand. Does this need to be sort of fully litigated and fully fleshed out to establish more of a record, given the context of some shift in the compact here? And again, that's a question specifically directed at both the electric and the gas.

Julien Dumoulin-Smith:

Right. It holds through as and you probably want to work through a fully litigated case here.

Julien Dumoulin-Smith:

Yes. All right. And actually, as it pertains to QIP here, just – I know that there's a new framework on the electric side, and that's largely established at this point pending implementation. But QIP and its subsequent forms or iterations remains a little bit outstanding. Can you elaborate what your thoughts are, and perhaps going back whether legislatively or otherwise at this point, to get something new? Again, I'll leave it open ended on what that might look like. I know we've talked about this in the past at times, but is there a window today to revisit that conversation perhaps in the slate you did before?

Julien Dumoulin-Smith:

Yes. Excellent. And then sorry, quick clarification from earlier. Boomtown, just is there anything different about this? Say, relative to Huck Finn or something like that, that might stand out in terms of that approval process? Obviously, the timing here being a little different in terms of the duration for the CCF.

Julien Dumoulin-Smith:

Andrew, I echo the sentiment.

Operator:

We have reached the end of the question-and-answer session. I would now like to turn the call back to Marty Lyons for closing comments.

Operator:

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation's Third Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Megan McPhail, Manager of Investor for Ameren Corporation. Thank you. Mrs. McPhail, you may begin.

Marty Lyons:

Thanks, Megan. Good morning, everyone. And thank you for joining us. I'm pleased to report that we continue to execute on our strategic plan across each of our business segments, delivering significant value to our customers and shareholders while remaining focused on safety. At the start of the year, we laid out some key initiatives we were focused on. As I sit here today, I can confidently say that we have been able to deliver on these through strong execution of our plan. Starting with Ameren Missouri in February, our new Ameren Missouri Electric service rates took effect as a result of our recent rate review, which was constructively settled at the end of last year. In June, we filed a change to our Integrated Resource Plan, accelerating our planned clean energy investments, carbon emission reduction goals and our plan to achieve net zero by 2045. The Midcontinent Independent System Operator or MISO approved a portfolio of long-range transmission projects, including significant projects in our operating footprint. And in August, Senate Bill 745 was enacted in Missouri, extending the constructive Smart Energy Plan legislation that became law in 2018 out through 2028, with possible extension to 2033. I am pleased to say as a result of these developments in 2022, we were able to increase our 10-year investment opportunity pipeline from $40 billion to $48 billion. Further in our Ameren Illinois Electric Distribution business, in September, the Illinois Commerce Commission or ICC, approved constructive performance metrics, which keep us on track to file a multi-year rate plan next January. And finally at the federal level passage of the Inflation Reduction Act will support the clean energy transition, reducing the cost of related infrastructure investments for our customers in both Missouri and Illinois. I would like to express appreciation for all the hard work of the entire Ameren team to advance these important achievements. Additionally, I'd like to recognize our team's strong commitment to the communities we serve. This year we named our first Chief Sustainability Diversity and Philanthropy Officer to further optimize Our ESG impact. In October, she convened more than 1,000 Ameren team members and community leaders in person and virtually for a diversity and inclusion summit, featuring many nationally recognized leaders and speakers. Because of actions like this, in May, Ameren was recognized for the third time as DiversityInc’s top rated utility, and made the overall top utilities list for the 14th consecutive year. Another example of our team's commitment to our communities is our recently concluded 2022 companywide United Way Campaign, which raised approximately $1.7 million, funds which will go a long way towards supporting approximately 50 United Way organizations in our service territory. This is an addition to the nearly $2.6 million United Way contribution made by Ameren. Again, thank you for all you do. Moving now to quarterly results. Yesterday, we announced third quarter 2022 earnings of $1.74 per share, compared to earnings of $1.65 per share in the third quarter of 2021. The year-over-year improvement reflected increased infrastructure investments across all of our business segments that will drive significant long-term benefits for our customers. This page highlights the key drivers of our strong performance. Due to strong execution of our strategy, we have narrowed our 2022 earnings guidance to a range of $4 to $4.15 per share. This compares to our initial guidance range of $3.95 per share to $4.15 per share. Michael will discuss our third quarter earnings, 2022 earnings guidance and other related items in more detail. Moving to page 5, you will find our strategic plan reiterated. We continue to invest in and operate our utilities in a manner consistent with existing regulatory frameworks, enhance regulatory frameworks and advocate for responsible energy and economic policies and create and capitalize on opportunities for investment for the benefit of our customers, shareholders and the environment. Turning now to page 6, which highlights our commitment to the first pillar of our strategy investing in and operating our utilities in a manner consistent with existing regulatory frameworks. Our strong long-term earnings growth guidance is primarily driven by our infrastructure investment and rate base growth plans, which are supported by constructive regulatory frameworks. As you can see on the right side of this page, consistent with our plans for 2022, we are strategically investing significant capital in each of our business segments in order to maintain safe and reliable operations as we transition to a cleaner energy grid. These investments are the key drivers of our ongoing Ameren Missouri and Ameren Illinois rate reviews. Our energy grid is smarter, stronger, more resilient, safer and more secure. Because of the investments we've been able to make in all four of our business segments. At Ameren Missouri, as a result of significant investments we have been making under the Smart Energy Plan. We estimate over 6.5 million minutes of customer outages have been avoided in 2022. As always, while we invest to build a smarter, stronger, safer and cleaner energy grid for our customers, we continue to work diligently to manage our costs, leverage our investments and optimize our performance. Moving now to page7, and the second pillar of our strategy, enhancing regulatory frameworks and advocating for responsible energy and economic policies. As I mentioned, the Inflation Reduction Act or IRA was enacted in August, which among other things is designed to help reduce the costs of the clean energy transition. We are very pleased with results as it provides tax credits for wind, solar and nuclear energy centers, energy storage, carbon capture utilization and storage and hydrogen developments. The incentives in the IRA align well with our Missouri integrated resource plan and our Ameren wide goal of reaching net zero carbon emissions by 2045. Overall, the IRA will enhance affordability of the clean energy transition for our customers in Missouri and Illinois. Michael will discuss the expected impacts of the IRA in more detail in a moment. Before moving on, I would also like to briefly touch on the Infrastructure Investment and Jobs Act or IIJA that was enacted earlier this year. We are actively collaborating with stakeholders in Missouri and Illinois toward accessing benefits of the federal funding provided through this act for our customers. In July when announced our collaboration with local businesses and community groups, academic institutions and various companies to form the Greater St. Louis and Illinois Regional Clean Hydrogen Hub Industrial Cluster. This group is collaborating on infrastructure development and innovative technology deployment needed to drive decarbonization goals and collectively achieve greenhouse gas emission reductions for the region by 2035. The IIJA established an $8 billion competitive program, with the intent to fund six to eight regional hydrogen hubs across the country, and provides for an additional $8.5 billion program for development of carbon capture and storage technologies. By next spring, our regional hydrogen cluster expects to apply for funding through the program to take part in advancing this potential renewable energy source for our region. Turning to page 8. At the state level, our customers are benefiting as a result of Ameren Missouri Smart Energy Plan, a multiyear effort to strengthen and modernize the energy grid. As I just mentioned, Missouri Senate Bill 745, passed earlier this year and became effective in August, enhancing and extending the sunset date on the current Smart Energy Plan legislation through December 31, 2028 with an extension through December 31, 2033 if the utility requests and PSC approves. We believe extending Missouri Smart Energy Plan will continue to benefit our customers and communities as we transform the energy grid of today to build a brighter energy future for generations to come, while creating significant economic development and jobs in the state. Moving now to page 9 and an update on the Illinois Energy Legislation enacted in 2021. By January 20 of 2023, we plan to file a multiyear rate plan with the ICC for electric delivery service rates effective at the beginning of 2024. In late September, the ICC approved seven performance metrics, which will result in up to 24 symmetrical basis points of potential adjustments to the allowed return on equity under the multiyear rate plan. These performance metrics have been designed to incentivize improvement in areas such as reliability, supplier diversity, affordability, and customer service, as we continue to make significant investments in the state of Illinois for the benefit of our customers and communities. Turning to page 10, and the third pillar of our strategy, creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment. Here we provide an update on the MISO long range transmission planning process. As we have discussed with you in the past, MISO completed a study outlining a potential roadmap of transmission investments through 2039 taking into consideration the rapidly evolving generation mix that includes significant additions of renewable generation based on announced utility integrated resource plans, state mandates and goals for clean energy or carbon emission reductions, among other things. In July, MISO approved Tranche 1, a set of projects located in MISO north, which had estimates to cost approximately $10 billion. Approximately $1.8 billion of these projects are in our service territory and have been assigned to Ameren. Preliminary design work and project planning are already underway. Construction is expected to begin in 2025, with completion dates expected near the end of this decade. In addition to the assigned projects, MISO approved approximately $700 million of competitive projects that cross through our Missouri service territory, which provide additional potential investment opportunities. Request for proposals for the two competitive projects in our service territory are expected to be released in December 2022 and March 2023. Once released, we expect a proposal and evaluation process to take approximately 12 months. We are well positioned to compete for and successfully execute these projects, given their location and our expertise constructing, operating and maintaining large regional transmission projects. MISO continues its work on future tranches, and it's indicated that an initial set of Tranche 2 projects also located in MISO north, is expected to be approved in the second half of 2023. Projects include in Tranche 3 are expected to be located in MISO south, with approval scheduled by the end of 2024. While projects identified in Tranche 4, are expected to improve transfer capability between MISO north and MISO south, and will be studied upon approval of Tranche 3. Turning to page 11. Looking ahead over the next decade, we have a robust pipeline of investment opportunities that will deliver significant value to all of our stakeholders by making our energy grid smarter, stronger and cleaner. As a result of the Long-Range transmission projects just discussed, as well as the additional renewables and combined cycle generation included in the change to the IRP filed in June, we increased our pipeline of investment opportunities to $48 billion over the next decade. We expect to update and roll forward our five-year capital plan on our year-end call-in February. And as always, we will evaluate all of our opportunities across all business segments to ensure we maximize value for our customers and shareholders. When determining the timing of our projects, we remain mindful of portfolio diversification in both technology and geography, workforce and supply chain capacity and the impacts to grid reliability, while aggressively managing costs. Maintaining constructive energy policies that support robust investment in energy infrastructure, and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs in the future, and delivering on our customers’ expectations. Moving now to page 12, we are focused on delivering a sustainable energy future for our customers, communities and our country. This page summarizes our strong sustainability value proposition and focus on environmental, social governance and sustainable growth goals. The change to the Ameren Missouri IRP filed in June supports a 60% reduction in carbon emissions by 2030 and an 85% reduction by 2040 compared to 2005 levels. And our goal of net zero carbon emissions by 2045 is consistent with the objectives of the Paris Agreement and limiting global temperature rise to 1.5 degrees Celsius. Importantly, our energy policy advocacy and investment plans align with these goals. In terms of governance in October, the CPA-Zicklin Index once again named Ameren, one of the top three companies in the utility industry for corporate political disclosures and accountability. We also remain focused on supporting our communities, including utilizing our very robust supplier diversity program to help ensure we execute on an equitable clean energy transition. And we remain committed to helping our customers keep their bills as low as possible, through robust energy efficiency programs, and energy assistance for those in need. Lastly, our strong, sustainable growth proposition remains among the best in the industry. We have a robust pipeline of future investments that will continue to modernize the grid and enable the transition to a cleaner energy future. I encourage you to take some time to read more about our strong sustainability value proposition, you can find our ESG related reports at amereninvestors.com. Turning to page 13. To sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2022 and beyond will deliver superior value to our customers, shareholders and the environment. In February, we issued our current five-year growth plan, which included our expectation of a 6% to 8% compound annual growth rate earnings growth rate from 2022 through 2026. This earnings growth is primarily driven by strong rate base growth supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. We expect average future dividend growth to be in line with our long-term earnings per share growth expectations and a payout ratio range of 55% to 70%. In February 2022, Ameren’s Board of Directors last increased the quarterly dividend by $0.04 or $0.59, to $0.59 per share or approximately 7%. We plan to deliver strong, long-term earnings and dividend growth which results in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plan and strategy across all four of our business segments as we have an experienced and dedicated team to get it done. Again, thank you all for joining us today. And I will now turn the call over to Michael.

Operator:

[Operator Instructions] Our first question is from Julien Smith with Bank of America.

Michael Moehn:

Yes, perfect. Good morning, this is my Michael. Yes, I'll start and Marty can certainly supplement it. Look, we haven't really said exactly what our future cadence will be, you're correct as a QIP, is set to sunset at the end of ‘23. And so, we're indicating that we're going to file a case here, and it'll be effective under this QIP for the balance of 2023. I mean I think the thing to keep in mind is you step back, and you look at the Illinois gas regulations. I mean, it's still very constructive, even absent the QIP and all, I'll come back to that. But I mean, there is forward test year, rates are decoupled, bad debt tracker, et cetera. I mean, there's some real positives with respect to what goes on there. But as the team gets to look at the opportunities there. I mean, we may have to have a different cadence if it were ultimately expired. But there could be an appetite to extend something at some point. We just really haven't engaged in those conversations at the moment. But we feel like absent even getting an extended, there are certainly ways to continue to manage that business very constructively going forward. Anything to add, Marty?

Darius Lozny:

Great. Thank you for that. Appreciate the color. One more, if I can, and this is on the 2023 earnings considerations. I realize it's not a formal guidance or fully exhausted. But I noticed O&M is not included as one of the drivers. Are you planning to -- or are you managing to flat year-over-year? And maybe that's why it's not included on that list because it won't move the needle one way or the other on as an EPS driver? Or just how are you thinking about that cadence.

Operator:

Our next question is from the line of Paul Patterson with Glenrock Associates.

Michael Moehn:

Yes, I appreciate the question. I mean we really did try to provide some of that detail on '21 to give you a sense of sort of what's happening from a redemption standpoint. Obviously, we're going to have some just normal financings in the normal course. We didn't provide anything in there just because of what's going on with respect to rates. What I tried to also do, Paul, as you look at the recovery of interest rates in terms of how we think about it, transmission business. Obviously, formula rates got a little bit of a positive -- obviously, a positive hedge on the 30-year treasury offsetting in addition to you have a formula on the interest rate within the electric distribution business. And then Missouri itself, we're obviously in the middle of a rate review. So you'll be updating some of the capital structure and the cost of capital as we go through that rate review through the end of this year. So I tried to give that perspective just to give you a sense for what the impact would be in 2023.

Operator:

Our next question is from the line of David Paz with Wolfe Research.

Marty Lyons:

Yes, David, this is Marty. Yes, in our February call, we will plan to update you on our thoughts in terms of EPS CAGR from 2023 to 2027 at that point in time. We'll also, at that time, expect to update our capital expenditure plan which right now really runs through '26, we'll take that out through 2027. And we'll also update you on our expectations in terms of our rate base CAGR out through 2027. So those are all things that we plan to do on the February call. In terms of the overall investment pipeline, as we've discussed this morning, this year as a result of the Missouri Integrated Resource Plan, as a result of the MISO approving Tranche 1 projects, we bumped our overall 10-year pipeline from $40 billion to $48 billion. And as we mentioned in some of the specifics, some of those capital expenditures, we would expect to start to fall in the latter half of that five-year update. So those are things that we'll consider how best to fold-in to both our five-year CapEx guidance as well as that rate base CAGR.

Marty Lyons:

Yes. David, I think at this point, haven't made a firm determination as to whether what will fold-in or not. I would say with respect to some of those competitive projects, while it's a little bit of a different thing than we faced in the past, I would say, traditionally, we've been a bit conservative about rolling those things in until we have better line of sight to those being projects that we would be able to firmly execute. So I would expect with respect to those projects, we take a bit of a conservative posture.

Michael Moehn:

Yes. David, this is Michael. Yes, so when we roll forward our plan in February ‘22, so we had $300 million basically of external equity through the balance of that plan, plus $100 million of DRIP as indicated, very pleased with where we are today. I mean we've gotten the '22 and '23 offer there. So you should continue to assume that $300 million ‘24 through the balance, we continue to target a capitalization ratio close to 45% over that five-year plan. So we'll stay focused on that. And then as Marty just talked about, as we roll forward into February and roll forward the new capital plan, obviously, we'll step back and address any financing needs as part of what happens with that capital plan itself, but you should continue to think about that $300 million at the moment.

Marty Lyons:

Okay. Well, thank you all for joining us today. As you heard on the call, we've had a strong 2022 year-to-date. We remain focused on continuing to deliver strong value through the end of this year for our customers, communities and our shareholders. So Again, thanks for joining us. We look forward to seeing many of you, I think, at the EEI conference, which is just a couple of weeks away. Thanks all and be safe.

Operator:

Greetings, and welcome to Ameren Corporation's Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Megan McPhail, Manager of Investor. Thank you. You may begin.

Marty Lyons:

Thanks, Megan. Good morning, everyone. And thank you for joining us. We had a solid quarter and we're excited to share an update today on a number of recent developments. As always, our team continues to work hard to execute our strategic plan across all of our business segments, allowing us to deliver significant value to our customers and shareholders. Yesterday, we announced second quarter 2022 earnings of $0.80 per share, compared to earnings of $0.80 per share in the second quarter of 2021. The year-over-year results reflected increased infrastructure investments across all our business segments that will drive significant long-term benefits for our customers. The key drivers of our second quarter results are outlined on this slide. I am pleased to report that we remain on track to deliver solid earnings growth in 2022 and are reaffirming our 2022 earnings guidance range of $3.95 per share to $4.15 per share. Michael will discuss our second quarter earnings, 2022 earnings guidance and other related items in more detail later. Moving to slide 5, you will find our strategic plan reiterated. We continue to invest in and operate our utilities in a manner consistent with existing regulatory frameworks, enhance regulatory frameworks and advocate for responsible energy and economic policies and create and capitalize on opportunities for investment for the benefit of our customers, shareholders and the environment. Turning now to page 6, which highlights our commitment to the first pillar of our strategy, investing in and operating our utilities in a manner consistent with existing regulatory frameworks. Our strong long-term earnings growth guidance is primarily driven by our infrastructure investment and rate base growth plans, which are supported by constructive regulatory frameworks. You can see on the right side of this page, we continue to strategically invest significant capital in each of our business segments in order to maintain safe and reliable operations as we transition to a cleaner energy grid. Regarding regulatory matters earlier this week, Ameren Missouri filed an electric rate review with the Missouri Public Service Commission requesting a $316 million annual revenue increase. This request reflects significant modernization upgrades to the electric grid for system reliability, resiliency and safety, as well as investments to support the transition to cleaner energy for the benefit of our customers and local communities. In our Illinois Electric business, we recently requested an $84 million revenue increase in our required annual electric distribution rate filing. Again, key drivers for this rate increase includes significant investments to enhance the grid for our customers and communities, which will deliver long-term benefits. Michael will cover these in more detail a bit later. And we will provide updates on these proceedings as they develop later this year. As we invest to build a safer, stronger, smarter and cleaner energy grid for our customers, we also continue to work diligently to manage our costs, leverage our investments and optimize our performance. Moving now to page 7, and the second pillar of our strategy, enhancing regulatory frameworks and advocating for responsible energy and economic policies. Without question energy policy at the federal and state levels and constructed regulatory frameworks that incentivize meaningful and needed infrastructure investments have never been more important as we look too reliably and securely transition to a cleaner energy future as affordably as possible. As late last week, it was announced that Senators Schumer and Manchin reached agreement on proposed legislation that would, among other things, extend significant incentives for clean energy development and deployment. Given the Clean Energy Transition underway in Illinois and Missouri, as highlighted by our recent change to the Ameren Missouri Integrated Resource Plan, filed with the Missouri PSC in June and our goal of reaching net zero carbon emissions by 2045. We are very excited about the potential benefits of this legislation. Specifically, the credits proposed for wind, solar storage, nuclear, Carbon Capture Utilization and Storage or CCUS and hydrogen will align very well with the significant investments proposed in the Missouri IRP. Importantly, the benefits of these tax incentives will ultimately lower the cost of the clean energy transition for our customers in Missouri, and Illinois over time. These potential tax credits when coupled with the significant clean energy funding made available through the infrastructure investment in JOBS Act passed earlier this year will drive significant long-term benefits for our customers, communities and the country. I will also note that the proposed legislation includes a minimum corporate income tax for public companies with pretax book earnings above $1 billion. At the state level, as part of Ameren Missouri Smart Energy Plan, a multiyear effort to strengthen the grid, our customers are benefiting from stronger poles, more resilient power lines, smart equipment, including modern substations, and upgraded circuits to better withstand severe weather events and restore power more quickly. As we mentioned on our first quarter earnings call, Missouri Senate Bill 745, which enhances and extends the smart energy plan passed earlier this year with strong majority support in the General Assembly. The bill was later signed by Governor Parson. We believe extending Missouri's Smart Energy Plan will continue to benefit our customers and communities as we transform the energy grid of today to build a brighter energy future for generations to come. And while creating significant economic development and jobs in the state. Moving to page 8 for Illinois legislative matters, we continue to make progress working towards the implementation of the Illinois energy Transition Legislation enacted last year, including the performance metrics required by the legislation. Ameren Illinois has proposed eight performance metrics each worth three basis points of incentives for a total of 24 basis points of symmetric, equity return upside or downside potential. The ICC staff is mostly aligned with Ameren Illinois on the performance metrics and is proposed the range of 20 to 24 total basis points of increased or decreased return opportunities. We expect a final order from the ICC by late September in the performance metrics docket. We look forward to the ICCs order and filing our first multiyear rate plan next year, as we believe this legislation will support important energy grid investments and deliver value to customers. Turning to page 9, for an update on our plan to accelerate the retirement of the Rush Island Energy Center. Last month in response to our notification to MISO of our intention to retire the energy center, MISO issued its final Attachment Y report, designating the generating units at the Rush Island Energy Center as systems support resources. MISO also concluded that certain mitigation measures including transmission upgrades should occur to ensure reliability before the energy center is retired. Those transmission upgrade projects have been approved by the MISO and we have started the design and procurement process associated with the upgrades, which we expect to complete by late 2025. In the interim, until Rush Island can be retired, Ameren Missouri has proposed limiting operations at the Energy Center. The District Court is under no obligation or deadline to issue a rule modifying its remedy order to reflect the MISO SSR designation or proposed interim operating parameters. The original March 31, 2024 compliance date remains in effect unless extended by the court. We expected decision in the near term. Turning now to page 10 for an update on changes to our 2020 Ameren Missouri Integrated Resource Plan, which we filed in June. Our IRP is a 20 year energy plan created to ensure reliability for our customers for years to come. I'm excited to share with you that these changes to the plan accelerate our clean energy additions, reduce carbon emissions even further in the short term, and accelerate the company's net zero carbon emissions goal by five years. Specifically, the plan targets a 60% reduction in carbon emissions below 2005 levels by 2030 and an 85% reduction by 2040 and by 2045, our goal is to achieve net zero carbon emissions across all of Ameren. The new goals include both Scope 1 and Scope 2 emissions, including other greenhouse gas emissions of methane, nitrous oxide, and sulfur hexafluoride. We plan to achieve these goals by making significant investments in renewable energy, including 2,800 megawatts of renewable energy by 2030, representing an investment opportunity of $4.3 billion. This is an increase of $1 billion from our 2022 -- excuse me our 2020 IRP. By 2040 in total, in total, the plan includes 4,700 megawatts of renewable generation for a total investment opportunity of $7.5 billion. The plan also includes 1,200 megawatts of gas combined cycle generation by 2031, an investment opportunity of $1.7 billion, which will allow us to safely and reliably advance the net retirement timeline of our fossil generation, including the accelerated retirement of the Rush Island Energy Center. Further, the plan includes 800 megawatts of battery storage by 2040, representing an investment opportunity of $650 million, we expect to add 1,200 megawatts of clean dispatchable resource by 2042. And to also seek an extension of the operating license of our carbon free Callaway Nuclear Energy Center beyond the current expiration date of 2044. These changes to the 2020 IRP will drive our ability to meet customers rising needs and expectations for reliable, affordable and clean energy sources. Achieving these goals is dependent upon a variety of factors including cost effective advancements in innovative clean energy technologies, and constructed federal and state energy and economic policies. We have issued a request for proposal to solicit solar and wind projects that will allow us to take the next steps and deliver the best value for our customers. One thing is clear. Our IRP includes significant incremental investment opportunities, and we're very excited as we continue to execute our clean energy transition plan. Turning now to page 11. Speaking of executing our Clean Energy Transition Plan, in July, we filed Certificates of Convenience and Necessity or CCN with the Missouri Public Service Commission for two solar project acquisitions, Boomtown, a 150 megawatt solar energy center located in southern Illinois, is expected to be in service by the fourth quarter of 2020. Huck Finn, a 200 megawatt solar energy center located in Eastern Missouri, would be Ameren’s largest solar project to date, generating more than 25 times the amount of energy of Missouri's largest existing solar facility. This solar project is also expected to be in service by the fourth quarter of 2024. While the Missouri PSC is under no deadline to issue an order on the CCN filings, we expect decisions by March and April 2023 for the 200 megawatt and the 150 megawatt facilities respectively. Looking ahead, we expect to announce further agreements for the acquisition of renewables between now and the first half of 2023. Turning to page 12, in the third pillar of our strategy, creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment. This page provides an update on the MISO long range transmission planning process. As we have discussed with you in the past, MISO completed a study outlining a potential roadmap of transmission investments through 2039 taking into consideration the rapidly evolving generation mix that includes significant additions of renewable generation based on announced utility integrated resource plans, state mandates, and goals for clean energy or carbon emission reductions, as well as electrification of the transportation sector, among other things. In July, MISO approved tranche one, a set of projects located at MISO north, which had estimated to cost more than $10 billion. Of these projects approximately $1.8 billion represent projects in our service territory that have been assigned to Ameren. We expect to refine the scope, cost estimates and timelines for these projects over the remainder of this year. In addition to the assigned projects, MISO approved approximately $700 million of competitive projects that cross through our Missouri service territory, which provide additional potential investment opportunities. We are well positioned to compete for and successfully execute on these projects, given the location of the projects and our expertise constructing large regional transmission projects. Later this month, MISO is expected to post a schedule outlining the RFP process for competitive bidding, with the first RFP expected to be issued by late September. The competitive bidding process is expected to take 12 to 24 months. For the projects assigned to Ameren, we expect the capital expenditures to begin in 2025 with the completion dates expected near the end of this decade. MISO has also begun work on three additional tranches, and is indicated that an initial set of tranche two projects also located in MISO north is expected to be approved in the second half of 2023. Projects including tranche 3 are expected to be located in MISO south, with approval scheduled by the end of 2024 while projects identified in tranche 4 are expected to improve transfer capability between MISO north and MISO south, and will be studied upon approval of tranche 3. Turning then to page 13. Looking ahead over the next decade, we have a robust pipeline of investment opportunities that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. We have updated the investment opportunities to reflect the additional renewable and combined cycle generation included in the change to the IRP filed in June. We now expect over $48 billion of investment opportunities over the next decade, maintaining constructive energy policies that support robust investment in energy infrastructure, and a transition to a cleaner future in responsible fashion will be critical to meeting our country's energy needs in the future, and delivering on our customers’ expectations. Moving now to page 14, we're focused on delivering a sustainable energy futures for our customers, communities and our country. This slide summarizes our strong sustainability value proposition and focus on environmental, social, governance, and sustainable growth goals. The change to the Ameren Missouri IRP filed in June supports our goal of net zero carbon emissions by 2045. And is also consistent with the objectives of the Paris Agreement in limiting global temperature rise to 1.5 degrees Celsius. We also remain focused on supporting our communities, including our very robust supplier diversity program. Our strong sustainable growth proposition remains among the best in the industry. We have a robust pipeline of future investments that will continue to modernize the grid and enable the transition to a cleaner energy future. I encourage you to take some time to read more about our strong sustainability value proposition, you can find all of our ESG related reports at amereninvestors.com. Turning to page 15. To sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2022 and beyond will deliver superior value to our customers, shareholders and the environment. In February, we issued our five year growth plan which included our expectation of a 6% to 8% compound annual earnings growth rate from 2022 through 2026. This earnings growth is primarily driven by strong rate base growth supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. We expect Ameren’s future dividend growth to be in line with our long-term earnings per share growth expectations, and within a payout ratio range of 55% to 70%. We expect to deliver strong long-term earnings and dividend growth which results in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plans and strategies across all four of our business segments, as we have an experienced and dedicated team to get it done. Finally, turning to page 16, I would like to take the opportunity to congratulate Richard Mark on his retirement and extend my gratitude for his many contributions made to Ameren and our communities. Richard served in several leadership positions during his 20 year career at Ameren and was influential in the advancement of the electric and natural gas distribution grids throughout southern and central Illinois, including installing advanced technologies, improving reliability, and creating 1000s of jobs in addition to his strong community engagement. Thank you, Richard, and I wish you well in your retirement. I would also like to introduce to you Ameren Illinois’s new President Lenny Singh. Lenny brings more than 30 years of utility experience serving in both electric and natural gas operations, most recently as Senior Vice President of Consolidated Edison Company of New York. Over the course of his career, Lenny is focused on operational excellence and value creation, prioritizing safety, customer satisfaction, continuous improvement, action and accountability. I look forward to working with Lenny as he builds on Ameren Illinois success as we work to safely, reliably and securely drive the clean energy transition in the state of Illinois. Again, thank you all for joining us today. And I will now turn the call over to Michael.

Operator:

[Operator Instructions] Our first question comes from Shahriar Pourreza with Guggenheim Partners.

Marty Lyons:

Yes, you bet Shahriar, good questions. And, here I hope you have a Good Friday and a good weekend. But back to your questions, in terms of the competitive projects coming out of tranche 1, as we highlighted a little over $700 million of those. And as we mentioned in our prepared remarks that we do believe we're well positioned to compete for and successfully execute those, I think the bottom line is that we believe we're really well positioned to efficiently build, operate and maintain those assets over time. The projects that are competitive are within our footprint. They're places where we have strong relationships with local communities, regulators, suppliers, contractors, et cetera. And we've been operating in this area for many years. So we know the land, we know the environmental conditions and issues. And I tell you too that we've been working for several years now, as we've developed billions of dollars’ worth of transmission projects, and we've been working overtime with suppliers and contractors to really bring down the costs of construction. And because these projects, these competitive projects are contiguous with other assets that we own and operate, we think we're really well positioned to operate and maintain these assets at a low cost over time. So those are some of the reasons that we believe at the end of the day, we're well positioned to compete and execute on those projects. So we look forward to participating in that competitive process over time. And then your second question really got to some of the incremental capital into our plan. I'll let Michael comment on that. But you're right, in terms of the $1.8 billion worth of projects that were assigned to us, we do again, expect to begin those in 2025. And those cash flows and capital expenditures to be incurred over between 2025 and the end of the decade. Michael, any comments in terms of the added CaPex?

Shahriar Pourreza:

It does. Yes. I am sure it does.

Shahriar Pourreza:

Perfect. And then just I know, you just probably touched on it a little bit on just the Inflation Reduction Act. I mean, obviously, [Inaudible] proposed some changes, I think we go to a vote on Saturday. Can you just touch a little bit on the tax side? I mean, some of the utilities have talked about a technical fix with the 50% AMT? Are you in sort of EI lobbying against it? Could you get a carved out? And then if there isn't enactment of that AMT how do we sort of think about the cash flows and rate base growth impact and the recovery timing? Thanks.

Michael Moehn:

Yes, I think Marty, I think at a high level you gave it good justice there. I mean, I think overall, we do see it as being manual. There are a lot of moving pieces here. So I think that's why we're really trying to stay away from the specifics, but as we look at it and model it out we do think as Marty said both from a cash flow as well as any sort of impact, Shahriar, our FFO to debt metrics, that it definitely is something that's manageable. And I think the important thing to remember is just that the net benefit to customers just from an overall credit standpoint, certainly on the Missouri side, as you think about this clean energy transition that we're about to go through.

Jeremy Tonet:

Hi, good morning. Just wanted to round out the MISO tranche 1 conversation a little bit more. Would Ameren entertain the notion of pursuing competitive processes beyond the $700 million identified or is that the extent of what you would consider? And also we've heard about there being kind of some incremental upside to these projects, maybe 10% to 15% of CapEx, additionally for kind of ancillary components to these projects. And just wondering if you had any thoughts along those lines?

Jeremy Tonet:

Got it. That's helpful. Thanks. And then just as it relates to Rush Island here, if you could provide any incremental thoughts with regards to transmission upgrade opportunity here. Any – could you provide any estimates on what these upgrades could look like? I know it's bigger than a breadbox. We're trying to kind of scope out what that might look like.

Operator:

Our next question is from Julien Dumoulin-Smith with Bank of America.

Marty Lyons:

Yes so as it relates to the CSAPR rules, look, it's something we're not only monitoring but engaging with EPA in terms of providing comment. Of course, Merrimack is retiring this year, Rush Island is, as you mentioned, looks like it's going to retire in the 2024 to 2025 timeframe. Again, we don't expect the transmission investments to be fully completed until 2025. As we noted, we have proposed some limited operations between now and then between now and when the plant would ultimately retire all subject to the court's ruling in terms of operating parameters as well as the ultimate closure date. But certainly going to significantly reduce NOx emissions as we ramped down towards closure of that facility. So I think the focus really becomes, Julien, that on NOx controls, at Labadie and Sioux, and I would remind you there that we've made significant investments over time in terms of NOx controls, and we're more than complying with all the current standards that are out there. So with respect to the proposed additional rules I think we'll wait to comment on specifically what the impacts will be at Labadie and Sioux over time, until we get the final rules, which we expect to come out next March. But I will tell you that what we'll be doing and we are, we're analyzing strategies for compliance, and making sure that we get the full benefit of the controls that we do have in place today at Labadie and Sue.

Michael Moehn:

Yes, thanks, Julien. This is Michael. Look, inflation, it certainly we're in a little different environment today. But I mean, I think we've talked historically, and we've showed you a couple of times, even have a slide, I think that went through 16 through 21. And our overall operating costs were down about 3%. And so, look, we remain focused on it, you referenced this Missouri rate review that we just filed here. I would tell you that that's really predicated on a lot of capital investment within the Smart Energy Plan, we outlined, and I think the benefits that customers are getting associated with those investments. And obviously, it's also being impacted by what we just talked about with respect to Rush Island, and the net fuel costs and operating in that plant in a more limited fashion as well. So when you really cut through what's going on in case, it's not, it's really not about O&M costs, which I think is a testament to what this team has been doing in terms of just looking for ways to continue to hold down costs wherever possible. So in the present environment, I think we're managing well through it. As we noted, on the call, we had some O&M was up, but it was really driven by some one time things between the COLI performance towards some storm costs. And when you cut through it, it certainly lines up with what our expectations were on the February timeframe, we released guidance.

Michael Moehn:

Yes, sure. Look, I do. Yes, absolutely, I keep my comments consistent with already been in the past. And that's Marty and I and the rest of the team is very focused on these costs, and doing all that we can to control what we can control. And look, we aspire to keep these O&M costs. I think we said this for the really flat over the five year horizon, if at all possible, it's obviously, and it’s a bit more challenging in this environment. But again, as we look to our capital plan, we look to the investments that we're making in automation and digital and smart meters. I mean, we're using all of those things to increase productivity, lower costs where we can and we're going to stay focused on it and just do absolutely all that we can because we know again what it means to our customers, we understand we talked about this from a capital perspective for every dollar of O&M we reduce we can spend the equivalent $7 of capital and so, it is certainly top of mind, and continuous everyday focus here.

Paul Patterson:

Hey, good morning. So, just on Rush Island, just sort of technically speaking. If you don't get, I mean if the courts don' completely go your way, the plan to shut down, what would actually happen, or do we have an idea about what would happen?

Paul Patterson:

Okay. Fair enough. I don't want to push that. I guess it's all hypothetical, I guess, to certain degree. So with respect to wind curtailments that we've been seeing in the area, I was wondering if you could tell us what you've been seeing, not just in Ameren but the greater Ameren neighborhood so to speak, as well as how tranche 1 and other sort of activity occurring, like I guess, Green Belt is talking about a 25%, I think, increase among other things, as there's just a lot of moving pieces, I guess to put it right, so I'm just sort of wondering what if you could just sort of comment about what you're seeing there in terms of additions of generation plants, traditional plants, shutting down and transmission, what you see sort of the current situation with wind curtailments is generically speaking in your general region and what tranche 1 and other things might do with respect to the issue.

Operator:

[Operator Instructions] Our next question comes from Anthony Crowdell with Mizuho.

Michael Moehn:

Andy, we haven't actually said, I mean, you're right, we've been on kind of a two year cycle here at this point. And look, I mean, we obviously we want to continue to stretch these out as much as we possibly can. But just given the pace that we've been on from a capital standpoint two years has been sort of what the required paces be, needed to be. I think the only other thing to just keep in mind is that we are required to file every four years just because of the fuel adjustment clause, but otherwise we do want to try to stretch them out as long as we can.

Marty Lyons:

I really think MISO is going to do their best to make sure that there are very clear scope and design and construction expectations and attributes such that you can really get apples-to-apples comparisons in these bids. And I gave a fairly extensive answer to a question earlier, at the end of the day, I just want to reinforce, I mean we really do believe that we're well positioned to efficiently build, operate and maintain these assets over time. But it is our expectation that there'll be every effort made to ensure there's apples-to-apples comparisons.

Neil Kalton:

Hi, guys, how are you? Yes. So I know, it's not your project Greenbelts Express, though, there's been some recent developments, the capacity, as Paul mentioned, is going up on the project. And I would imagine IRA probably has some positive implications for the economics and prospects. I would love your latest thoughts on that project, if you will.

Neil Kalton:

Great, thanks. And then one other question. I think in your prepared remarks, you mentioned, hydrogen as being, you sort of mentioned as part of the IRA, can you elaborate a bit more on sort of how you're thinking about hydrogen? Is this sort of nearer term opportunity, or any thoughts on that as well, please?

Operator:

We have reached the end of the question and answer session. I'd now like to turn the call back over to Marty Lyons for closing comments.

Operator:

This concludes today's conference. You may disconnect your lines at this time. And we thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation's First Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you. Mr. Kirk. You may begin.

Martin Lyons:

Thanks Andrew. Good morning everyone, and thank you for joining us. We've had a solid start to the year and our team continues to effectively execute our strategic plan across all of our business segments, allowing us to deliver consistently strong results for our customers and shareholders. Yesterday, we announced first quarter 2022 earnings of $0.97 per share compared to earnings of $0.91 per share in the first quarter of 2021. The year-over-year increase of $0.06 per share reflected increased infrastructure investments across all of our business segments that will drive significant long-term benefits for our customers. The key drivers of our first quarter results are outlined on this slide. I am pleased to report that we remain on track to deliver within our 2022 earnings guidance range of $3.95 per share to $4.15 per share. Michael will discuss our first quarter earnings, 2022 earnings guidance and other related items in more detail later. Moving to slide five. You will find our strategic plan reiterated. We continue to invest in and operate our utilities in a manner consistent with existing regulatory frameworks. Enhance regulatory frameworks and advocate for responsible energy and economic policies and create and capitalize on opportunities for investment for the benefit of our customers, shareholders and the environment. Turning out to page six, which highlights our commitment to the first pillar of our strategy, investing in and operating our utilities in a manner consistent with existing regulatory frameworks. Our strong long-term earnings growth guidance is primarily driven by our infrastructure investment and rate-based growth plans, which are supported by constructive regulatory frameworks. Our plan includes strategically allocating capital to all four of our business segments. You can see on the right side of this page, we have invested significant capital in each of our business segments during the first three months of this year, in order to maintain safe and more reliable operations all while facilitating and driving a clean energy transition. Regarding regulatory matters in late February, new Ameren Missouri electric and natural gas service rates went into effect, reflecting significant investment in grid modernization, reliability, resiliency, security, and renewable energy generation. In addition, in April Ameren Illinois filed its required annual electric distribution rate update, reflecting similar infrastructure investments and service improvements in that jurisdiction and requesting an $83 million increase. Ongoing investment across all four business segments is building a safer, stronger, smarter, and cleaner energy grid for our customers now and in the future. At the same time, we are maintaining discipline with regard to costs, leveraging our investments and focusing on continuous improvement to optimize our performance and drive greater value for our customers. Moving to page seven and the second pillar of our strategy, enhancing regulatory frameworks and advocating for responsible energy and economic policies. Over the last several years, we have worked hard to enhance the regulatory frameworks in both Missouri and Illinois, to enable meaningful and needed infrastructure investments to support reliability, resiliency, and safety. In order to consistently deliver strong value for our customers, communities, and shareholders, while practicing responsible environmental stewardship, we continue to work towards enhancing regulatory frameworks and advocating for responsible energy and economic policies. Workshops related to the implementation of the Illinois energy transition legislation enacted last year are ongoing and performance metrics related to the multi-year rate plan are expected to be approved by the ICC by late September. We believe this legislation will support important energy grid investments and will deliver value to customers, such as the utility owned solar in optional battery storage pilot projects in two communities, Peoria and East St. Louis. We're excited to announce that we began construction of an approximate $10 million, 2.5 megawatt solar energy facility in East St. Louis in early March. This energy center will strengthen the energy grid, while building a cleaner energy future for this Illinois community. Before moving on, I'd like to briefly discuss recent energy and capacity purchases made by the Illinois power agency on behalf of our Ameren Illinois customers for the upcoming June, 2022, through May, 2023 planning year. As you know, global events have been impacting the cost of energy commodities, and power prices in the Midwest have been elevated. Further, a combination of factors, including higher energy usage, a reduction of dispatchable generation and the construct of MISO's capacity market are all being cited as causes of a spike in regional capacity prices. Unfortunately, as a result of these factors, some of our Illinois customers will be seen a meaningful increase to the energy supply component of their bills beginning in June. It is important to note that energy and capacity costs are passed on to our Ameren Illinois customers through a rider with no markup. While factors leading to these increases and potential perspective mitigation will undoubtedly be discussed amongst stakeholders, our approach remains the same. We will continue to focus on supporting our customers and communities by connecting them with bill assistance where needed and continuing to invest strategically to support a responsible clean energy transition in Illinois. Moving now to page eight and Missouri legislative matters. As part of Ameren Missouri smart energy plan, a multi-year effort to strengthen the grid, our customers are benefiting from stronger poles, more resilient power lines, smart equipment, including modern substations and upgraded circuits to better withstand severe weather events and restore power more quickly. I am pleased to report that yesterday afternoon, Senate Bill 745 passed by strong majority support in the general assembly. This bill enhances the smart energy plan legislation enacted in 2018. More specifically, the bill extends the sunset date on the current smart energy plan legislation through December 31st, 2028 with an extension through December 31st, 2033, if the utility requests and the PSE approves. The bill also modifies the rate cap beginning in 2024 from the current 2.85% compound annual all in cap on growth in customer rates to a 2.5% average annual cap on rate impacts of piece of deferrals. In addition, the bill expands and extends economic development incentives and provides for a property tax tracker. The bill will now be sent to the governor for signature. We believe extending Missouri smart energy plan will continue to benefit our customers and communities, as we transform the energy grid of today to build a brighter energy future for generations to come, all while creating significant economic development and jobs in the state. Turning to page nine. We will now provide an update on developments related to our plan to accelerate the retirement of the Rush Island Energy Center. As discussed on our year-end earnings call in late February, Ameren Missouri filed an attachment Y with MISO notifying it of our intention to close the energy center. As a result of that filing MISO is now studying the grid reliability implications of Rush Island's planned closure in order to determine any investments and interim operating parameters required prior to closure in order to mitigate system reliability risks. I would note MISO's preliminary study completed in January, 2022 recommended transmission upgrades and indicated additional voltage support will be needed on the transmission system to ensure reliability. While MISO is under no deadline to issue a final report, we expect a draft report will be issued this month. The District Court, which is awaiting MISO's analysis, is also under no deadline to issue a final order regarding the accelerated retirement date. Ameren Missouri expects to file an update to its 2020 integrated resource plan with the Missouri PSE in June, which will reflect the expected accelerated retirement date of the Rush Island Energy Center. Such filing will also include discussion of the expected use of securitization in order to recover the remaining investment in Rush Island. We continue to work with all parties involved to move forward with the accelerated retirement in the most responsible fashion. On page 10, we turn our focus to the third pillar of our strategy, creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment. This page provides an update on the MISO long range transmission planning process. As we have discussed with you in the past, MISO completed a study outlining the potential roadmap of transmission investments through 2039, taking into consideration the rapidly evolving generation mix, that includes significant editions of renewable generation based on announced utility integrated resource plans, state mandates, and goals for clean energy or carbon emission reductions, as well as electrification of the transportation sector among other things. Under MISO's Future 1 scenario, which is the scenario that resulted in an approximate 60% carbon emission reduction below 2005 levels by 2039, MISO estimates approximately $30 billion, a future transmission investment would be necessary in the MISO footprint. Under its Future 3 scenario, which resulted in an approximate 80% reduction in carbon emissions below 2005 levels by 2039, MISO estimates approximately $100 billion of transmission investment into MISO footprint would be needed. As part of Tranche 1, MISO working with key stakeholders, including transmission owners has identified projects located in MISO North estimated to total more than $10 billion. The projects crossing through our Missouri and Illinois service territories provide significant investment opportunities. We believe we are well-positioned to execute on these projects, given the location of the projects and our expertise constructing large regional transmission projects. MISO approval of Tranche 1 is expected in late July. Work on three additional Tranches has begun and MISO has indicated that an initial set of Tranche 2 projects also located MISO North is scheduled to be approved in the first quarter of 2023. Projects included in Tranche 3 three are expected to be located in MISO South, with approval scheduled in the fourth quarter of 2024, while projects identified in Tranche 4 are expected to improve transfer capability between MISO North and MISO South with approval scheduled in the fourth quarter of 2025. Moving now to page 11. We are focused on delivering sustainable energy future for our customers, communities and our country. This slide summarizes our strong sustainability value proposition and focus on environmental, social, governance and sustainable growth goals. Our preferred plan included in Ameren Missouri's 2020 IRP supports our goal of net-zero carbon emission by 2050, as well as interim carbon emission reduction targets of 50% and 85% below 2005 levels by 2030 and 2040, respectively, which is consistent with the objectives of the Paris agreement and limiting global temperature rise to 1.5 degrees Celsius. As previously noted the IRP will be updated in June to reflect among other things, MISO's long-range transmission planning, legislative and regulatory developments, and the early retirement of Rush Island. We continue to work diligently to optimize our sustainability value proposition, including our clean energy transition. In just last month, we announced completion of our newest clean energy resource, a six megawatt solar facility. The Montgomery County solar center is part of our Missouri community solar program, which began in 2018, offering customers the opportunity to invest in solar energy generation in their community through a shared system. The energy center is now up and running, supporting more than 2,000 customers who want to take part in clean energy generation without having to pay high upfront cost to install solar equipment on their own roofs or property. The program is fully subscribed, and we are evaluating expansion opportunities at additional sites. We also have a strong long-term commitment to our customers and communities to be socially responsible and economically impactful. I'm excited to say that this week DiversityInc announced once again, that they have named Ameren Number One on their top utilities list for diversity and inclusion, a list we have proudly been part of since 2009. DiversityInc also recognized Ameren as a top company for veterans, black executives, as well as a top company for ESG among all industries. This slide highlights a few of the many things we are doing for our customers and communities, including being an industry leader in diversity, equity and inclusion. Further, our strong corporate governance is led by a diverse Board of Directors focused on strong oversight that's aligned with ESG matters. We recently named our first Chief Sustainability and Diversity Officer to further optimize our ESG impact by aligning these interconnected areas. Finally, this slide summarizes our very strong sustainable growth proposition, which remains among the best in the industry. As mentioned on our call in February, we have a robust pipeline of future investments that will continue to modernize the grid and enable the transition to a cleaner energy future. This pipeline includes over $45 billion of investment opportunities over the next decade, that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. Of course, our investment opportunities will not only create a stronger and cleaner energy grid to meet our customers' needs and exceed their expectations, but they will also create stronger economies and thousands of jobs for the communities we serve. I encourage you to take some time to read more about our strong sustainability value proposition. You can find all of our ESG related reports at amereninvestors.com. Turning to page 12. To sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2022 and beyond will deliver superior value to our customers, shareholders and the environment. In February, we issued our five-year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2022 through 2026. This earnings growth is primarily driven by strong rate-based growth, supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks. I will note renewable generation and regionally beneficial transmission projects represent additional investment opportunities. We expect to announce further agreements for the acquisition of renewables over the course of this year and to file certificates of convenience and necessity, or CCNs with the Missouri PSC after the updates to the 2020 IRP have been filed in June. We expect to deliver strong long-term earnings and dividend growth, which results in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plans and strategies across all four of our business segments, as we have an experienced and dedicated team to get it done. Again, thank you all for joining us today. And I will now turn the call over to Michael.

Operator:

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Thank you. First question today will be coming from the line of Jeremy Tonet with JP Morgan. Please proceed with your question.

Martin Lyons:

Morning, Jeremy.

Martin Lyons:

Yeah. Jeremy, I appreciate the question. Look, as we said in the prepared remarks, we certainly believe we're well-positioned for projects that MISO has outlined that cross through our Missouri and Illinois footprints. But as we sit here today, we don't want to get ahead of the MISO in terms of their overall approval of their projects or the designation of which ones are brownfield or greenfield projects. So, we do expect that when they approve these projects in July, we expect that they will designate which ones are brownfield. They'll indicate which transmission owner has been assigned those projects. So -- and I would just say stay tuned. As I said, in the February call we'll, we expect to have more to discuss on our Q2 earnings call.

Martin Lyons:

Yeah. Thanks Jeremy. Yeah. We were actually very pleased that yesterday the legislature did pass Senate Bill 745, which was great. That's a bill that really extends the longevity of the smart energy plan, that we have in Missouri. And so, we're very appreciative of the strong support of the legislature with regard to that legislation. And I think it's a recognition that the investments that we've been making in Missouri, have really been producing good benefits for our customers in terms of safety and reliability of the service that we provide. And the fact that, we're really scratching the surface in terms of the investments that we need to replace aging infrastructure and modernize our equipment throughout our Missouri footprint. I think it's also a recognition of the economic development benefits associated with that legislation. We're having a positive impact as we invest on our economies, through the creation of jobs. We concentrate on using Missouri vendors substantially for the things that we procure and the things that we invest in. And there's some great economic development, incentive rates associated with this legislation that help Missouri businesses grow, as well as attract Missouri businesses to the state. So, we're really excited about the legislature passing Senate Bill 745. It now heads to the governor's desk for signature, and we're excited to be able to extend the benefits of the smart energy plan prospectively.

Martin Lyons:

Yeah. I think -- I don't think with respect to that legislation, that there are any immediate impacts other than making sure that as we move forward in time to the extent that, there are greenfield transmission projects that -- owners of agricultural properties are compensated fairly for their property. I think that's the primary impact going forward.

Operator:

Thank you. Our next question is in the line of Julien Dumoulin-Smith with Bank of America. Please proceed with your question.

Michael Moehn:

Yeah. You bet. Good morning. This is Michael Moehn. I would say things are moving along, just fine there. I think a lot of constructive conversations, workshops, et cetera. There's a number of different paths that are occurring. There's one associated with the performance metrics. I'll give you a few details. There's one around a multi-year grade plan, et cetera. And so, I think they're all moving along, as we sort of anticipated last year and so nothing that we see that's concerning. With respect to the performance metrics themselves, it really is kind of the standard stuff that you would think about from like a reliability standpoint. So, system average, days of disruption, you're looking at customer metrics in terms of customer response time on calls, et cetera. So, kind of standard stuff. Right now, we are advocating for about 24 basis points. So, there's about eight different metrics and ascribing three basis points to each one of those metrics. Everything still should -- it's be on track to conclude here by September of this year, and at that point in time, we'd make the decision. And as we've said before, we see ourselves opting into that and then the multi-year rate plan we need to be filed in January of 2023. Does that help?

Michael Moehn:

Yeah. You got both of those correct. So that $300 million that we've sold for, that does take care of the requirements here that we outline in February for 2022. And then that is part of that $750 million. That $750 million should get us through the end of 2023.

Michael Moehn:

You bet.

Shahriar Pourreza:

Hey, good morning guys.

Shahriar Pourreza:

Good morning. If you could -- I'd like to maybe touch on Illinois. The bill and kind of the reliability backdrop seems to be a little bit noisy amid sort of the year-over-year jump in PRA costs, planned retirements under [indiscernible] 33:15. And just the general concerns that obviously is coming from some of the C&I customers. I guess, how do you sort of see this kind of resolving in the next couple of years, especially as you're looking to go through multi-year rate plans in the interim?

Shahriar Pourreza:

Got it. That's perfect. And then, lastly for me. Obviously, you have the opportunity to earn on some of your generation length in MISO and flow that back to Missouri customers. Are you seeing that today? And any sort of quantification of the potential benefit to customers there?

Shahriar Pourreza:

Okay. Terrific. Thanks guys. I stop there. Appreciate it.

Operator:

The next question comes from the line of Paul Patterson with Glenrock Associates. Please proceed with your question.

Martin Lyons:

Good morning, Paul.

Martin Lyons:

Yeah. Paul, it's hard to say at this point. I would say it's premature to conclude one way or another. I think what we're seeing right now is folks really digesting the news in terms of the power -- higher power and capacity prices. And what that means in terms of its implications for policy going forward, we will -- we'll see -- I think it's premature.

Martin Lyons:

Well, with respect to Greenbelt, obviously, that's a project that's been underway for quite some time and has been progressing, and we had certainly anticipated that. One of the things that we've talked about in the past is last year -- or I should say in the fall 2020 when we filed our integrated resource plan, one of the things we did is assess the potential to utilize some of that capacity and wind in Kansas to meet some of our renewable goals and as part of our integrated resource plan. So, I think the biggest thing for us, Paul, is we think about that project -- when we think about the update to our integrated resource plan that we'll be filing in June, it's just the continuing optionality associated with that resource -- or those resources in potentially fulfilling the needs of our integrated resource plan. So, that's something that we will continue to assess as we move forward.

Martin Lyons:

Thanks.

Anthony Crowdell:

Hey, good morning, Marty. Good morning, Mike.

Anthony Crowdell:

Hey, like the Blues, I don't think they tie it up here. So, I'm rooting for them until they meet the Rangers. But just hopefully, two quick questions, I guess. One, if I think about Missouri and Illinois, both right first refusal states. And if the transmission lines are greenfield, does that mean they are competitively bid? Or maybe just wondering what's the distinction you're making between brownfield and greenfield?

Anthony Crowdell:

Great. And then, just another follow-up here. Moving to Illinois -- and I guess, maybe 30-year treasury. I think, right now, it's about 90 basis points above expectation, I think, for the year where you guys had thought was going to be. I calculate that as kind of like a $0.07 tailwind. I guess, are there any headwinds I think about that maybe could potentially offset that benefit when I'm thinking about the year? Or is maybe my number's wrong on from where the expectation was of the 30-year versus where it's at now?

Anthony Crowdell:

Great. Thanks for taking my questions and congrats on a good quarter.

Martin Lyons:

Thank you.

Martin Lyons:

Yeah. Thank you all for joining us today. We're really pleased. We had a strong start to 2022. And we certainly, as Michael said, remain focused on continuing to deliver throughout the year for our customers, our communities and our shareholders. I'd like to invite all of you to attend our Annual Shareholder Meeting, which is being held on May 12th, and we look forward to seeing many of you at the AGA Financial Forum in the next couple of weeks. So, with that, thank you all, and have a great day.

Operator:

Greetings, and welcome to Ameren Corporation's Fourth Quarter 2021 Earnings Conference Call. [Operator Instructions]. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you. Mr. Kirk, you may begin.

Warner Baxter:

Thanks, Andrew. Good morning, everyone, and thank you for joining us. To begin, I'd like to remind everyone that effective January 1 of this year, I became Executive Chairman of Ameren, Marty Lyons became President and CEO. Our transition to this new forward-thinking leadership structure is going very well. In light of the significant activities taking place in our industry, this new structure is enabling me to focus on key energy and economic policy matters and working with Marty on key strategic initiatives. At the same time, Marty has hit the ground running, leading the Ameren team in overall strategy development and execution, as well as managing the significant day-to-day operational and other responsibilities of the CEO. Our industry is transforming and millions of customers in Missouri and Illinois are depending on us to achieve our vision, leading the way to a sustainable energy future and our mission to power the quality of life. Each year provides a new set of opportunities and challenges, but one thing that remains constant in Ameren is our strong commitment to safely deliver reliable, cleaner and affordable electric and natural gas service. Our team continues to effectively execute our strategic plan across all of our businesses. including safely and successfully completing billions of dollars of value-adding projects for our customers; advocating for constructive federal and state energy policies and regulatory outcomes; leaning further forward on our digital transformation; and pursuing a wide range of sustainability goals. Simply put, continued strong execution of our strategic plan is delivering significant value to our customers, communities, shareholders and the environment, which brings me to a discussion of our 2021 performance. Yesterday, we announced 2021 earnings of $3.84 per share compared to earnings of $3.50 per share in 2020 or an increase of nearly 10%. Excluding the impact from weather, 2021 normalized earnings were $3.82 per share or an increase of approximately 8% from 2020's weather-normalized earnings of $3.54 per share. We made significant investments in energy infrastructure in 2021 and that resulted in a more reliable, resilient, secure and cleaner energy grid as well as contributed to strong rate base growth at all of our business segments. As outlined on this page, we also achieved several constructive regulatory and legislative outcomes that will facilitate additional infrastructure investments while keeping our customers' rates affordable. This strong execution of our strategy in 2021 will continue to drive significant long-term value for all of our stakeholders. Turning to Page 5. As you can see on this page, our laser focus on keeping our customers at the center of our strategy has delivered strong results for our customers. Our investments in infrastructure have resulted in top quartile reliability, affordability and customer satisfaction. The frequency of outages on our system continues to trend downward, resulting from our infrastructure investments, coupled with a focus on innovation and continuous improvement. Our disciplined cost management has helped drive our electric rates approximately 25% below Midwest and national averages. And I'm extremely proud to say that J.D. Power recently ranked Ameren Illinois #1 in residential customer satisfaction in the Midwest, among large electric utility providers, with Ameren Missouri ranking third. Further, we have continued to deliver superior value to our shareholders, as you can see on Page 6. Our weather-normalized core earnings per share have risen 84% and an approximate 8% compound annual growth rate since we exited our unregulated generation business in 2013, while our dividends paid per share have increased approximately 38% over the same time period. This has driven a strong total return of nearly 220% for our shareholders from 2013 to 2021, which was significantly above our utility peer average. I'm very pleased with our past performance. You can rest assured that our team will remain focused on enhancing performance in 2022 and in the years ahead so that we can continue to deliver superior value to our customers, communities and shareholders. Turning to Page 7. This page summarizes our strong sustainability value proposition and focus on environmental, social, governance and sustainable growth goals. Beginning with environmental stewardship, in September 2020, Ameren announced its transformational plan to achieve net zero carbon emissions by 2050 across all of our operations in Missouri and Illinois. This plan includes interim carbon emission reduction targets of 50% and 85% below 2005 levels by 2030 and 2040, respectively, which is consistent with the objectives of the Paris Agreement in limiting global temperature rise to 1.5 degrees Celsius. We plan to file an update to the 2020 Integrated Resource Plan in the first half of this year, which Marty will discuss a bit later. In 2021, we acquired the 300-megawatt Atchison Renewable Energy Center located in Northwest Missouri, our second wind generation investment. This acquisition is a significant step forward, along the path to meeting our clean energy goals. We also have a strong long-term commitment to our customers and communities to be socially responsible and economically impactful. This slide highlights a few of the many things we are doing for our customers and communities, including being an industry leader in diversity, equity and inclusion. We were honored to be recognized again by DiversityInc as one of the top utilities in 2021, in addition to a top company for ESG. And we continue to help drive inclusive economic growth by spending approximately $900 million with diverse suppliers in 2021, an 11% increase over 2020. Further, our strong corporate governance is led by a diverse Board of Directors focused on strong oversight that's aligned with ESG matters. And our executive compensation practices include performance metrics that are tied to diversity, equity and inclusion and progress towards a cleaner energy future. Finally, this slide summarizes our very strong sustainable growth proposition, which remains among the best in the industry. Today, we published our updated ESG investor presentation called Leading the Way to a Sustainable Energy Future, available at amereninvestors.com. This presentation demonstrates how we have been effectively integrating our focus on environmental, social, governance and sustainability matters into our corporate strategy. I encourage you to take some time to read more about our strong sustainability value proposition. As noted previously, as part of my new role of Executive Chairman, I will focus on key energy and economic policy matters, including through my leadership roles at the Edison Electric Institute and the Electric Power Research Institute as well as engaging with key stakeholders. Speaking of key energy and economic policy matters, we continue to strongly support and advocate for a robust federal clean energy tax package. In particular, we support clean energy transition tax incentives, including wind, solar and nuclear production tax credits, electric vehicle tax credits, transmission and storage investment tax credits as well as direct pay and normalization opt-out provisions. We strongly believe these forward-thinking policies to address climate change will advance the clean energy transition in a safe, reliable and affordable fashion and will deliver significant long-term benefits for our customers, communities and country. We will continue to work with key stakeholders, along with our industry colleagues to advance constructive federal energy and economic policies. In closing, our team has accomplished a great deal over the last several years. Their relentless commitment to our vision, mission and strategy has delivered strong value to our customers, communities and shareholders. Looking ahead, I'm even more excited about our future because I believe these efforts have positioned Ameren very well to deliver superior value over many years to come. Now here is Marty to tell you how our team will keep delivering under this strategy in the future.

Michael Moehn:

Thanks, Marty, and good morning, everyone. Turning now to Page 21 of our presentation. Yesterday, we reported 2021 earnings of $3.84 per share compared to earnings of $3.50 per share in 2020, an increase of 9.7%. Earnings in Ameren Missouri, our largest segment, increased $0.25 per share from $1.77 per share in 2020 to $2.02 per share in 2021. Increased investments in infrastructure and wind generation, eligible for plant and service accounting and the Renewable Energy Standard Rate Adjustment Mechanism, or RESRAM, positively impacted earnings by $0.21 per share. Higher electric retail sales also increased earnings by approximately $0.16 per share, largely due to continued economic recovery in 2021 compared to unfavorable impacts of COVID-19 in the year ago period. We've included on this page the year-over-year weather-normalized sales variances. Total weather-normalized sales in 2021 were largely consistent with our expectations outlined on our call last February. New electric service rates effective April 1, 2020, also increased earnings during 2021 by approximately $0.10 per share compared to the year ago period. Finally, these favorable factors were partially offset by higher operations and maintenance expenses, which decreased earnings $0.12 per share, primarily due to the amortization of deferred expenses related to the fall 2020 Callaway Energy Center scheduled refueling and maintenance outage. Moving to Ameren Illinois Electric Distribution, earnings increased $0.06 per share, which reflected increased infrastructure and energy efficiency investments and a higher allowed return on equity under performance-based ratemaking. The formula base return on equity was 7.85% in 2021 compared to 7.4% in 2020 as it was applied to -- and was applied to a year-end rate base. The 2021 ROE was based on the 2021 average 30-year treasury yield of 2.05%, up from the 2020 average of approximately 1.6%. Ameren Transmission earnings were up $0.02 per share, which reflected increased infrastructure investments that were mostly offset by the absence of the benefit from the May 2020 FERC order addressing the MISO allowed base return on equity and the impact of the March 2021 FERC quarter addressing the historical recovery of materials and supplies inventories. Earnings for Ameren Illinois Natural Gas were up $0.02 per share, which reflected new delivery service rates effective in late January 2021 and increased infrastructure investments, partially offset by higher other operations and maintenance expenses. Ameren Parent and other results were down $0.01 per share, which reflected increased interest expense, primarily from higher long-term debt balances. And finally, earnings per share and earnings per share drivers on this page are computed using 2020 weighted average shares outstanding. The higher shares outstanding in 2021 reduced overall earnings by $0.15 per share. Before moving on, I'll touch on 2021 sales trends for Ameren Illinois Electric Distribution. Weather-normalized kilowatt hour sales to Illinois residential customers were flat year-over-year and weather-normalized kilowatt hour sales to Illinois commercial and industrial customers increased 3% and 3.5%, respectively. Recall that changes in electric sales in Illinois, no matter the cause, do not affect our earnings since we have full revenue decoupling. Moving to Page 22 of the presentation. Here, we provide an overview of the $17.3 billion of strategically allocated planned expenditures for the 2022 through 2026 period by business segment that underlies the approximately 7% projected rate base growth Marty discussed earlier. This plan includes an incremental $200 million compared to the $17.1 billion 5-year plan for 2021 through 2025 that was laid out last February, which included the $500 million wind investment completed in 2021. As you can see on the right side of this page, we are allocating capital consistent with the allowed return on equity under each regulatory framework. Importantly, as Marty mentioned earlier, renewable generation and regionally beneficial transmission represent additional investment opportunities. Turning to Page 23. We outlined here the expected funding sources for the infrastructure investments noted on the prior page. We expect continued growth in cash from operations as investments are reflected in customer rates. We also expect to generate significant tax deferrals. These tax deferrals are driven primarily by the timing differences between financial statement depreciation reflected in customer rates and accelerated depreciation for tax purposes. From a financing perspective, we expect to continue to issue long-term debt in Ameren Missouri and Ameren Illinois to fund a portion of our cash requirements. Pursuant to a November 2021 note purchase agreement, we will issue $95 million of ATXI debt in August 2022. We also plan to continue to use newly-issued shares for our dividend reinvestment and employee benefit plans over the 5-year guidance period. We expect this to provide equity funding of approximately $100 million annually. In order for us to maintain a strong balance sheet while we fund our robust infrastructure plan, we expect incremental equity issuances of approximately $300 million each year starting in 2022 through 2026. Approximately $95 million of equity outlined for 2022 was sold on a forward basis under our at-the-market equity distribution program, leaving approximately $200 million to be sold for the remainder of 2022. Together, issuance of our 401(k), DRPlus and ATM equity programs are expected to support our equity needs through 2023. All of these actions are expected to enable us to support a consolidated capitalization target of approximately 45% equity over the 5-year plan. Moving to Page 24 of our presentation. I would now like to discuss key drivers impacting our 2022 earnings guidance. As Marty stated, we expect 2022 diluted earnings per share to be in the range of $3.95 to $4.15 per share. On this page and the next, we have listed key earnings drivers and assumptions behind our 2022 earnings guidance, broken down by segment as compared to the 2021 results. Beginning with Ameren Missouri, earnings are expected to rise in 2022. New electric service rates will be effective February 28, the 2022 earnings comparison is also expected to be favorably impacted by higher investments in infrastructure and wind generation that's eligible for PISA and RESRAM, which benefits earnings in January and February until rates are reset. We also expect to recognize earnings related to energy efficiency performance incentives from both 2021 and 2022 planned years in 2022. As a result, we expect energy efficiency performance incentives to be approximately $0.04 per share higher than 2021. These favorable factors are expected to be partially offset by higher operations and maintenance and interest expenses. Further, we expect the return to normal weather in 2022 will be decreasing Ameren Missouri earnings by approximately $0.02 compared to 2021 results. We also expect higher total weather-normalized electric sales of approximately 1% in 2022 compared to 2021, as residential sales decline and commercial sales continue to increase. We expect total weather-normalized sales to return to 2019 levels by mid-2022, with this year's growth expected to be primarily over the second half of the year. Moving on, earnings from our FERC-regulated electric transmission activities are expected to benefit from additional investments in Ameren Illinois and ATXI projects made under forward-looking formula ratemaking. The absence of the March 2021 FERC order on historical recovery of materials and supplies is also expected to increase earnings $0.03 per share. Turning to Page 25. For Ameren Illinois Electric Distribution, earnings are expected to benefit in 2022 compared to 2021 from additional infrastructure investments made under Illinois performance-based rate making. Our guidance incorporates a performance-based ROE of 8.05% using a forecasted 2.25% 2022 average yield for the 30-year treasury bond, which is higher than the allowed ROE of 7.85% in 2021. The allowed ROE is applied to year-end rate base. For Ameren Illinois Natural Gas, earnings will benefit from higher delivery service rates that were effective late January 2021 as well as from infrastructure investments qualifying for rider treatment. These favorable factors are expected to be partially offset by higher operations and maintenance and depreciation and amortization expenses. Moving now to Ameren-wide drivers and assumptions. We expect the increased common shares outstanding to unfavorably impact earnings per share by $0.04 and higher interest expense, primarily from higher long-term debt balances. Of course, in 2022, we will seek to manage all of our businesses to earn as close to our allowed returns as possible while being mindful of operating and other business needs. I'd also like to take a moment to discuss our retail electric sales outlook. We expect the weather-normalized Missouri kilowatt-hour sales to be in the range of flat to up approximately 0.5% compounded annually over the 5-year plan, excluding the effects of our MEEIA energy efficiency plan using 2022 as the base year. We exclude MEEIA effects because the plan provides rate recovery to ensure that earnings are not affected by reduced electric sales resulting from our energy efficiency efforts. Turning to Illinois. We expect our weather-normalized kilowatt-hour sales, including energy efficiency, to be relatively flat over the 5-year plan. Turning to Page 26 and regulatory matters. In December, the PSC approved a nonunanimous stipulation agreement that resolved both the electric and natural gas rate reuse for Ameren Missouri. The agreements were black box settlements, which did not provide for certain specific details of the final orders. In both rate reviews, an allowed ROE was not specified but did provide for approximately 52% equity ratio for use in calculating PISA and RESRAM. The electric revenue requirement increased by $220 million annually, reflecting a rate base of $10.2 billion. The approved agreement also provided for the continuation of key trackers and riders, including the fuel adjustment clause. The natural gas revenue requirement was increased by $5 million annually, reflecting a $313 million rate base. Both electric and natural gas rate changes are effective at the end of this month. Looking ahead, we will continue to assess the timing of our next rate review. In making this decision, we will take into account several considerations, including our capital expenditures and other cost of service considerations as well as updates to the Integrated Resource Plan expected to be filed in the first half of this year, reflecting the accelerated retirement of the Rush Island Energy Center and timing of our expected securitization filing. Regarding Ameren Illinois regulatory matters, in December, the ICC approved a $58 million base electric distribution rate increase in the annual rate update proceeding with new rates that were effective at the beginning of this year. Finally, turning to Page 27. We have a strong team and are well positioned to continue executing our plan. We delivered strong earnings growth in 2021, and we expect to deliver strong earnings growth in 2022 as we continue to successfully execute our strategy. And as we look ahead, we expect 6% to 8% compound earnings per share growth from 2022 to 2026, driven by robust rate base growth and disciplined cost management. Further, we believe this growth will compare favorably with the growth of our regulated utility peers. And Ameren shares continue to offer investors an attractive dividend. In total, we have an attractive total shareholder return story that compares very favorably to our peers. That concludes our prepared remarks. We now invite your questions.

Shahriar Pourreza:

Just a couple of quick questions here. First, just on supply chain. Are you seeing any impacts on the renewable side, especially as we think about the 2.4 gigs? I mean we've seen a few of your peers shift megawatts out either from panel shortages or other sort of supply chain disruptions. Any thoughts here? Any materials locked in or procured? And if this isn't transitory, since you guys are essentially swapping megawatts for megawatts as we think about renewables versus coal, could any project delays cause an impact to sort of the coal retirement time lines, especially as we're thinking about Sioux?

Michael Moehn:

Marty, no, that was pretty comprehensive. Nothing material to add to that answer. Shar, do you have something else?

Martin Lyons:

Yes, Shar. A terrific question. You know that the QIP in the gas business in Illinois has been really, I think, a terrific rider for the benefit of customers. It's really allowed us to do a lot of projects in Illinois, as much as 50% of our capital expenditures, replacing underground pipes, et cetera, to improve the safety and reliability of our gas system. So it's been a good rider. Certainly can't predict whether any legislative effort to end it prematurely will be successful or not. As you said, it's already scheduled to expire at the end of 2023. So look, it's been a good rider. We'd love to see it extended. We'd love to see perhaps some other mechanism go in its place that would be similarly beneficial. But ultimately, we do have in the gas business in Illinois, a favorable foundation for ratemaking, which is a forward test year with other good features like decoupling. So look, as we move forward, we'll continue to see whether there's either an extension of that QIP or perhaps something else that goes in its place. But ultimately, we can reassess both, not only the projects that we've got but also the timing of rate reviews and the like. At the end of the day, we feel like the projects that we're doing there, the projects we have planned there are great for our customers, great for the communities, and we'll look for a path forward to making those investments.

Durgesh Chopra:

On the 6% to 8% growth rate target, I mean, obviously, it looks like there's a ton of upside CapEx potential, whether it's the Rush Island-related CapEx, the MISO transmission CapEx, there may be an ROE bump in future years from the SB2408 in Illinois. What are you assuming in that 6% to 8% growth rate target in terms of these upside opportunities?

Michael Moehn:

Yes, the only thing I would add to that, Marty's really comprehensive answer, is with respect to Illinois, we kind of moved through this new process there in terms of opting into the multiyear plan. I think we'll continue to step back and assess the opportunities there. There obviously is a tremendous amount of projects that are needed to get done on the benefit of customers. We've made some great progress there, but there's just a lot of aging infrastructure. So as you know, we've been pulling that CapEx down a little bit over time just because of some of those returns. And so we'll assess that too as an opportunity, but Marty certainly highlighted the big ones.

Durgesh Chopra:

Got it. And then maybe can I just follow up on the whole -- the staff and commission review of the Rush Island retirement and generation needs to fill that hole, what are sort of the key milestones for us to watch there in terms of like the next steps that we should be watching for? Is that -- and then what is the end outcome you think of that review process?

Durgesh Chopra:

Congrats on a solid quarter.

Jeremy Tonet:

I just want to build off some of those questions there. Just wondering if you could frame, with regards to the Missouri IRP, MTEP process, Rush Island, just when could this be pulled into the plan? When do you think this could materialize? And how do we think about, I guess, potential incremental equity needs should this come in? Just trying to get the size of CapEx timing and incremental equity, how that might balance out.

Michael Moehn:

Yes. Perfect, Marty. Yes. I think that's well said. I mean, just in terms of -- Jeremy, we said this before. We just don't want to get in front of the regulatory process on that, and we'll just continue to assess these over time. And as we make that determination and figure out sort of what is incremental to the plan, that's when we would step back and look at what our financing needs would be with respect to that. As we've said in the past, we like our ratings where they are today. We're very focused on our metrics. We're targeting this capitalization ratio of about 45% equity over the balance of the plan. That's really what's driven the $300 million that we have in there today. And again, it would kind of be just on a case-specific basis. I wouldn't see us deviating much from that honestly, so I mean if that gives you any indication of how we would think about financing this going forward. But we would assess it at that point in time. So hopefully, that helps.

Martin Lyons:

Yes. Really hard to at this point. We're in those early stages, like I said, through the preliminary assessment that MISO did clear. The transmission upgrades are going to be needed both for voltage support as well as to ensure long-term reliability of the system. So clearly, some transmission investment needs there. But it's premature to say exactly what those will be. Efforts along those lines, given the preliminary assessment are already underway to determine some of those things. But ultimately, it will be a process working with MISO in particular, to determine what those needs will be and how much of an investment will be required there.

Paul Patterson:

Congratulations. So just on the Missouri legislation that you have there. Just wondering sort of what the practical impact from a shareholder perspective might be if you guys have that? And also, what's the reason from going from a 2.85% cap to a 2.5% cap? Is that just part of the give and take of legislation? Or is there something that's specifically happening that's causing people to want that?

Paul Patterson:

So when do we need to -- I mean, you've got it there now, but when is the sunset again on the current one?

Paul Patterson:

So it's not a real sunset? I mean -- so I mean, I guess you would be at the discretion of the commission as opposed to having it sort of legislatively in place. Is that the way to think of it?

Martin Lyons:

Yes, it's the right way to think about it. That's right. That's why I wanted to clarify my thoughts. You'd use the word sunset and I'd responded, but it's not a hard stop. Just a check-in point, if you will, to go back to the commission and re-up for another 5 years. But you're absolutely right in the way you've characterized the legislation, which would be more of a steady state going forward.

Paul Patterson:

And then on the coal ash, any thought about what the -- and I apologize if I missed this, what the total number in terms of the EPA impact might be? And also, is that -- how would that be treated regulatory speaking? Is that something that could be securitized? Or just how should we think about any potential coal ash cleanup expense?

Michael Moehn:

Yes, that's right. And then Paul, it would just be in...

Martin Lyons:

Correct. It would just be a typical capital project that we would recover in the normal course of our rate review. And yes, correct. It is not going to be an overly material number as we sit here today.

Operator:

Our next question is from Julien Dumoulin-Smith with Bank of America.

Martin Lyons:

Yes, Julien, obviously, you had a lot of topics in that question, and there are a bunch of moving parts. I think, number one, like you said on Rush Island, we'll let this MISO Y play out. But even if they come back pretty quickly on the MISO Y and again confirm that transmission investments are needed for both voltage support and long-term reliability, still then there'll be a process to determine what exactly those investments are and over what time period they'll be made. I can't give you an exact time line in terms of when we'll have clarity on all of that. But that's item number one. Item number two is the MISO actually approving projects as part of their Midwest region Tranche 1 approval process. And like I said, we do expect that, that will occur around midyear. And so there, we should get some clarity in terms of what projects of that portfolio would be ours to do, and we can begin assessing how we'll go about executing those and when those would be added to our plan. So we'll get some clarity there as well. And then with respect to the IRP, again, time line there is, again, around middle of the year. We said first half of this year. There is a little bit of dependency there. We'd certainly like to have clarity in terms of when transmission investments could be made, when Rush Island will actually be closing. And so we expect that over the course of this next 6 months, we should be able to have -- working with the District Court, MISO, et cetera, get some clarity on that. So all of those, I think, things will come to fruition likely in the first half of this year. We should get a lot of information, which we'll certainly be able to discuss. I think on our second quarter call, we'll have a lot of information there. Whether we update or not at EEI, hard to say. What traditionally we've done, and we discussed this earlier, step back, look at all these additional projects, look at the prioritization within our overall plan. Consider which of those projects we can get done, which of those are going to be additive, et cetera, how we're going to finance it. Typically, we'd lay that out on our fourth quarter call. But again, we should be able to provide, I think, a pretty comprehensive update on where things stand at the end of the second quarter and going into EEI. Michael, any additional thoughts there?

Julien Dumoulin-Smith:

Awesome. And just a quick clarification from Paul's question. Just with respect to the QIP, obviously, you've laid out your CapEx expectations through the full period here, including the -- I'm going to use the word sunset, I get that's not entirely appropriate. How do you think about whether or not that's extended and how that impacts your CapEx budget? I understand it impacts the recovery mechanisms and timing they're in. But it presumably does not impact your CapEx, one way or another?

Julien Dumoulin-Smith:

Got it. All right. Actually, guys, I'll leave it there. Sorry, you're going to say something?

Operator:

We have reached the end of the question-and-answer session. I'd now like to turn the call back over to Marty Lyons for closing comments.

Operator:

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Operator:

Greetings, and welcome to Ameren Corporation’s Third Quarter 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note that this conference is being recorded. It is now my pleasure to introduce our host, Andrew Kirk, Director of Investor Relations for Ameren Corporation. Thank you, Mr. Kirk. You may begin.

Warner Baxter:

Thanks, Andrew. Good morning, everyone, and thank you for joining us. To begin, I am pleased to report that our team continues to effectively execute our strategic plan across all of our businesses, which includes making significant investments in our energy infrastructure to enhance the reliability and resiliency with the energy grid as well as transition to a cleaner energy future in a responsible fashion. These investments, coupled with our continued focus on disciplined cost management and delivering significant value to our customers, communities and shareholders. We’ll now do our third quarter earnings results. Yesterday, we announced third quarter 2021 earnings of $1.65 per share. Our earnings were up $0.18 per share from the same time period in 2020. This slide highlights the key drivers of our strong performance. Michael will discuss the key drivers of our third quarter earnings results a bit later. Due to the continued strong execution of our strategy, I am also pleased to report that we raised our 2021 earnings guidance. Our 2021 earnings guidance range is now $3.75 per share to $3.95 per share compared to our original guidance range of $3.65 per share to $3.85 per share. Turning now to Page 5, where we reiterate our strategic plan. The first pillar of our strategy stresses investing in and operating our utilities in a manner consistent with existing regulatory frameworks. This has driven our multiyear focus on investing in energy infrastructure for the long-term benefit of our customers. As a result, and as you can see on the right side of this page, during the first nine months of this year, we invested significant capital in each of our business segments. These investments are delivering value to our customers. As I said before, our energy grade is stronger, more resilient and more secure because of the investments we are making in all four business segments. As we head into the winter months, I’d like to highlight some of the value these investments have created in Ameren Illinois and Ameren Missouri natural gas businesses. Our natural gas transmission and distribution investments are focused on upgrading and modernizing gas main and equipment infrastructure, all the strength in safety and reliability of our system for our customers. Being mindful of the gas distribution issues experienced in the industry in the past, I will note that our Ameren Illinois and Ameren Missouri natural gas distribution systems are comprised almost entirely a plastic and protected coated steel pipelines. There is no cast iron pipe in our systems, and we expect to eliminate all unprotected steel pipe by the end of this year. These investments are just another example of how we are putting our customers at the center of our strategy. Moving now to regulatory matters. In late March, Ameren Missouri filed a request for a $299 million increase and annual electric service revenues and a $9 million increase in annual natural gas service revenues with the Missouri Public Service Commission. In our Illinois Electric business, we have requested a $59 million base rate increase our required annual electric distribution rate filing. These proceedings are moving along on schedule. Michael will provide more information on these proceedings a bit later. Finally, we remain relentlessly focused on continuous improvement and disciplined cost management, including maintaining many of the cost savings that we realized in 2020 due to the actions we took to mitigate the impacts of COVID-19. Moving to Page 6 and the second pillar of our strategy

Warner Baxter:

Thank you, Marty. I look forward to continuing to work closely with you in your new role. Together, we remain firmly convinced that the continued execution of our strategy in the future will deliver superior value to our customers, communities, shareholders and the environment. Thank you all for joining us today. I’ll now turn the call over to Michael.

Operator:

Thank you. And ladies and gentlemen, at this time, we’ll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Jeremy Tonet with JPMorgan. Please state your question

Jeremy Tonet:

Hi, good morning.

Jeremy Tonet:

Good morning, thanks. Thanks for all the detail there and just want to pick up on the MISO MTAP side. I was just wondering if you might be able provide any more color for your expectations there in the process. And what could this specifically mean for Ameren over time? Realize might begin a little bit ahead of ourselves here, but just want to know if there’s any way you could frame, I guess what you think could be possible for Ameren CapEx, yes?

Jeremy Tonet:

Got it. That’s helpful. We eagerly await there.

Jeremy Tonet:

Maybe just pivoting over to the Missouri IRP here. Just wondering if you could share with us thoughts on next steps and I guess, how Rush Island plays into it, what we should be thinking about there?

Marty Lyons:

Thanks, Jeremy. Hey, how are you today? Appreciate the question. As it relates to the integrated resource plan, obviously, we filed last fall and as Warner said earlier in the prepared remarks, we continue to work with multiple developers with respect to several projects that would fit within that 1,200 megawatts of clean energy that we plan to deliver over the next several years consistent with that integrated resource plan. So we’re continuing to work on those, and we still expect to file with the commission still this year for approval of a portion of those project. So that work is going on. And then you mentioned the Rush Island Energy Center. And so as you saw in our slides today, in August, the court of appeals affirmed the District Court’s September 19 order. As we said in our slides and prepared remarks, we did file for a rehearing of that decision on October 18. So we do expect to hear back from the court and quite likely by the end of this year, we expect in terms of that rehearing. So it’s really premature to say what action we will take with respect to Rush Island at this point. We’ll wait to see whether there’s a rehearing. But that rehearing is denied and ultimately, we’re faced with that decision. Obviously, it may entail scrubbers in Rush Island or the accelerated retirement of that plant, which might also include the utilization of the securitization legislation was passed earlier this year. So those are some of the things we’re looking at. Considerations as we think about those alternatives or things like customer rate impacts, replacement generation needs and importantly, reliability and investments that may be required in terms of transmission to the extent that Rush Island were to be prematurely retired. So those are some of the considerations. I’ll tell you this, if ultimately a decision is made to retire Rush Island prematurely versus the day we had in our prior integrated resource plan that will require them that we file an updated integrated resource plan with the Missouri Public Service Commission. So stay tuned on that. Like I said, it’s premature to say how all of that will turn out, but that gives you a little bit of color on the potential path forward.

Michael Moehn:

Hey, Jeremy, it’s Michael. Yes, I think we indicated in the prepared remarks in the slide that we historically have been long in the Missouri side. And so obviously, to the extent, that we’re able to take advantage of that in the marketplace is also some sales that flow back to customers through the fuel adjustment clause. So certainly, given where natural gas prices are, which is what the impact it’s having on power prices, it’s definitely a bit of a tailwind from a customer affordability standpoint.

Warner Baxter:

Thanks, Jeremy. See you next week.

Warner Baxter:

Good morning, Julien. How are you doing?

Warner Baxter:

Yes. So this is Warner. So let me just summarize what we’ve said. Clearly, as I said and as Michael said, we think this is a forward-thinking, constructive regulatory structure. And not only is it constructive that enables us to make investments that we think are important for customers, but also gives us the opportunity to earn a fair return on those investments. Now what we said too, is that the structure is out there, but there’s still some work to be done, meaning that there are jobs that have to be taken care of next year, as you might have with any specific and comprehensive piece of legislation and we’re going to work through those workshops. Now we believe those workshops were at the table, and we expect them to be constructive outcomes. And so as a result, as we said, too, we anticipate filing for a multiyear rate plan in 2023. But there’s still some work to be done. And so we’re not trying to hedge or be cute. We just sort of telling it like it is. At the same time, as I said, we think it’s a constructive piece of legislation that we think will bring benefits to our customers state of Illinois and certainly to our shareholders. Michael, do you have anything you want to add?

Warner Baxter:

Yes. And just to give you a perspective, these workshops as you know, we talk about performance metrics. There’s a performance-based ratemaking perspective and concept incorporated in this legislation. So the performance metrics have to be determined, how you work through some of the details of the multiyear rate plan. These are things that stakeholders have to come to the table. And we look forward to working collaboratively with all of them next year.

Warner Baxter:

Yes, thanks. Needless to say, that is a very fluid situation just in the bigger picture. And so to say that we’ve quantified in particular, the specific impacts that would be premature. I will say, there are elements of the clean energy tax incentives, which I think are very good for customers and could be good for cash flows, especially when you look at the direct pay portions around, certainly, the ITCs and the PTCs that wind and solar are small up tax incentives. So Michael, I know that you and your team have been looking at it, but we haven’t put a specific finger on it, but do you want to add a little more color than that?

Warner Baxter:

One thing you can miss assured is that me and my industry colleagues, we’re at the table to try and make sure that we get a constructive piece of federal legislation down across the board that will enable us to continue to move forward thoughtfully and effectively with the clean energy transition.

Warner Baxter:

You bet. Thank you.

Warner Baxter:

Good morning, Insoo. How are you doing?

Warner Baxter:

Marty, why don’t you jump on and then address that one, please?

Insoo Kim:

Got it. Thanks for the color, Marty. The second question is on the grid 2021 guidance raising that by $0.10 as we think about the 2022, I know some of the weather benefit helped this year as well. But how do we think about some of the moving pieces that help 2021 that could potentially carry into 2022? And in that consideration slide, I didn’t see a specific mention to year-over-year low growth just curious on your base assumption there.

Insoo Kim:

Got it. Thank you, and congrats, Marty and Warner both of you, and see you soon.

Warner Baxter:

Thanks, Insoo. See you next week.

Warner Baxter:

Good morning, Durgesh.

Warner Baxter:

Thank you.

Marty Lyons:

You bet.

Warner Baxter:

Sure. You bet, Marty, why don’t you come on in and address that from an operational perspective, and maybe Michael, you can talk about how we think about guidance in terms of capital expenditures and those types of things.

Michael Moehn:

Thanks, Marty. Just a couple of other small points on that $17 billion plan that we have out there, as Marty pointed out, there’s very, very little in there with respect to any of these renewable projects. Now we did indicate in that 10-year plan, that $40 billion plus, there is $3 billion of potential projects, which what Marty is referring to. So as we get more clarity on that timing, obviously, typically, what we do in February as we roll forward that capital plan, to be able to give you a bit more transparency about what the timing of that to the extent that we feel better about it and know it. So that’s just a little bit more color on exactly what’s there from a capital standpoint.

Warner Baxter:

Sure. This is Warner. Look, it’s certainly be premature to predict where the ROEs would be. I mean the filing is going to be sometime in 2023, and it’s a multi-year filing. But what we can point to is, obviously, the 580 basis points, put a 30-year treasury, what that yields today. What we can point to is that in our gas business that we did at the beginning of this year, put in place a – the rate review results, that was a 9.67% return on equity for our gas business. It’s not the electric business, but it’s the gas business. It is just a data point. But how that will ultimately look and what the request will be for a multi-year rate plan, a lot of facts and circumstances will go into that. But we do see an opportunity for improvement, clearly, from our existing return on equity going forward.

Warner Baxter:

Exactly. And we would expect the overall process and looking at that return on equity in terms of sort of a traditional look would be very similar. But obviously, with the multi-year rate plan, there may be some other factors that have come into us. So stay tuned.

Warner Baxter:

You bet. Thank you.

Warner Baxter:

Good morning, Paul.

Warner Baxter:

I’m good. How are you?

Warner Baxter:

Number one, thank you. I’m truly excited about the new leadership structure and certainly the new roles that Marty and I are taking. And in terms of the last call, gosh, we’re taking one step at a time. We’re not saying this is my last call or anything like that. We’ll take that one step at a time. But you can kind of maybe in the EEI next week. That’s for sure.

Warner Baxter:

Thank you.

Warner Baxter:

It’s probably a Warner term, right. So really, when you look at all these projects, I mean, some you can sit there and say, gosh, when we had to get we’re having these congestion areas when we had to get from point A to point B, we have these projects that are in the queue, there are certain of these regional projects, which really satisfy a lot of those transmission – or excuse me, renewable energy projects that are in the queue. And you do the analysis and you sit there and say, gosh, no one could be no one. I shouldn’t say that. It would be hard for people to argue that this isn’t a project that isn’t going to be significantly beneficial to the MISO footprint, frankly, to our country. So I can’t put those as no regrets, low risk, let’s call them that way. Lower-risk projects relatively speaking, compared to some that may have more complications. And so when you look at that scenario one, we think from our perspective, right, beauty’s in the – holder, but from our perspective, and we think there are several of those in there that need to be – they need to move forward. So that’s what I mean. We haven’t outlined which of those that we believe are there, and this is part of the collaborative process that we go through with MISO and other key stakeholders. But that’s how we think. Really lower risk is probably a better term to characterize those projects as.

Marty Lyons:

Paul, it’s Marty. I can’t say whether it’s been fully taken care of everybody’s satisfaction. I will tell you this, we do look to work constructively with all the parties in these rate reviews to get everybody the information they need in a timely basis to make decisions. And to your point, do not believe it’s an active issue in terms of a quantified difference between our position and the positions of others in the case. So hopefully, we have resolved that issue fully. But like you said, it’s not manifesting itself today in any kind of difference between the parties.

Marty Lyons:

Sure. Yes, Paul, this is Marty. It’s a fair question. We’ll provide a lot more guidance, right, on that specific question and others when we come with our longer-term guidance in February. We’ll give you our view, right, on how we think about the guidance that we set in and how we think about regulatory frameworks and all those types of things. So sit here today, obviously, nothing to change, nothing to talk about other than as we’ve said, we think it’s a constructive piece of legislation that we anticipate assuming that things go well in the workshops, so we would file for a multi-year rate plan. How we embed that into our long-term guidance in early 2022, stay tuned. We’ll be able to provide more detail on that.

Marty Lyons:

Thanks, Paul. You do the same.

Warner Baxter:

Hello David, how are you doing?

Warner Baxter:

Thank you.

David Paz:

I just want to follow-up on a couple of quick questions. Just the following-up on the 1,200 megawatt maybe lots of Missouri question. I understand the spend is not in your stated outlook, financial outlook, but is any of the equity for that investment in your financing plan?

David Paz:

Got it. And then in an earlier question, Michael, did you say that you would be going forward your growth rate off of 2022 guidance or 2021 actuals when you were talking about the February update?

David Paz:

I see. Okay. Great. And maybe just a last question. I think Marty, can you provide an update maybe on just how settlement talks are going in the rate case or whether they’re still going?

David Paz:

Great. Thank you so much.