Q1 2022 Ameren Corp Earnings Call
Sure in the first quarter of 2021.
The year over year increase of <unk> <unk> 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.
Enhanced 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 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 base growth plans, which are supported by constructive regulatory frameworks.
Our plan includes strategically allocating capital to all four of our business segments.
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 reliable operations, all while facilitating and driving our 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 in 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 multiyear 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 and optional battery storage pilot projects in two communities Peoria and St. Louis.
We are excited to announce that we began construction of an approximate $10 million two five 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 dispatch will generation and the construct of MISO 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 trans.
<unk> in Illinois.
Moving now to page eight and Missouri legislative matters.
As part of Ameren, Missouri's Smart energy plan, our 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 31, 2028, with an extension through December 31, 2033, if the utility requests and the PSC approves.
The Bill also modifies the rate cap beginning in 2024 from the current 285% compound annual all in cap on growth and customer rates to a two 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 them 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 plant 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 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 is 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 PSC 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.
We continue to work with all parties involved to move forward with the accelerated retirement in the most responsible fashion.
On page 10, we turned 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 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.
Clean energy or carbon emission reductions as well as electrification of the transmit transportation sector among other things.
Under MISO future, one scenario, which is the scenario that resulted in an approximate 60% carbon emission reduction below 2005 levels by 2039 MISO.
MISO estimates approximately $30 billion of future transmission investment would be necessary in the MISO footprint.
The rich feature three scenario, which resulted in an approximate 80% reduction in carbon emissions below 2005 levels by 2039, MISO estimates approximately $100 billion of transmission investment in the MISO footprint would be needed.
As part of tranche, one MISO working with key stakeholders, including transmission owners is identified projects located in MISO north estimated to total more than $10 billion.
The projects crossing through our Missouri, and Illinois Service territories provides 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 one is expected in late July .
Work on three additional tranches has begun and MISO has indicated that initial set of tranche. Two projects also located MISO north is scheduled to be approved in the first quarter of 2023.
Projects included in <unk> III are expected to be located in MISO, south with approval scheduled in the fourth quarter of 2024, while projects identified in tranche four 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, ERP 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.
Consistent with the objectives of the Paris agreement and limiting global temperature rise to one five degrees Celsius.
As previously noted the ERP will be updated in June to reflect among other things MISO is 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 and just last month, we announced completion of our newest clean energy resource a six megawatt solar facility.
The Montgomery County Solar center as 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 2000 customers, who want to take part in clean energy generation without having to pay high upfront cost to install solar equipment on their own Bruce 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.
Im excited to say that this week diversity, Inc announced once again that they have named Amarin number one on their top utilities list for diversity and inclusion a list we have probably been part of since 2009 <unk>.
Diversity, Inc. 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 really.
<unk> reports at Ameren investors Dot 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 base 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 CCN with the Missouri PSC. After the updates to the 2020 ERP have been filed in June .
We expect to deliver strong long term earnings and dividend growth, which results in an attractive total return the 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, and I will now turn the call over to Michael.
Thanks, Marty and good morning, everyone. Turning now to page 14 of our presentation yesterday, we reported first quarter 2022 earnings of <unk> 97 per share compared to 91 per share for the year ago quarter.
Earnings at Ameren, Missouri, our largest segment increased <unk> <unk> per share due to several factors.
Earnings increased by approximately <unk> <unk> per share from higher electric retail sales driven by colder than normal winter temperatures in the first quarter of 2022 compared to near normal winter temperatures in the year ago period.
We've included on this page the year over year weather normalized sales variances for the quarter that showed that total sales to be up one 5% compared to the first quarter of 2021.
The earnings comparison also reflected investments in infrastructure and wind generation eligible for pizza, and whereas Ram which benefited earnings in January and February by <unk> until rates grew said.
These favorable factors were partially offset by higher operations and maintenance expenses, which decreased earnings <unk> <unk> per.
Per share this was driven in part by the unfavorable market returns in 2022 that occurred during the first quarter on the cash surrender value of our company owned life insurance.
Moving to other segments.
Ameren transmission earnings increased <unk> <unk> year over year, which reflected the absence of the March 2021, FERC order addressing material and supplies inventories and increased infrastructure investments.
Earnings for Ameren, Illinois, natural gas were up <unk>, reflecting increased infrastructure investments and higher delivery service rates that were effective in late January 2021.
Surely offset by higher operations and maintenance expenses.
Ameren, Illinois Electric distribution earnings also increased <unk> year over year, which reflected increased infrastructure investments and a higher allowed ROE under performance based ratemaking of approximately eight 5% compared to approximately eight 2% for the year ago quarter.
And finally, Ameren parent and other results were comparable comparable to the first quarter of 2021.
Before moving on I will touch on the sales trends for Ameren, Illinois electric distribution in the quarter.
Weather normalized kilowatt hour sales to Illinois residential customers decreased about one 5%.
And weather normalized kilowatt hour sales to Illinois, commercial and industrial customers increased about one half of 1% and one 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.
Turning to page 15, I would now like to briefly touch on key drivers impacting our 2022 earnings guidance, we're off to a strong start in 2022 and as Marty stated we continue to expect 2022 diluted earnings to be in the range of $3 95 to $4 15 per share.
Select earnings considerations for the balance of the year are listed on this page in our supplemental are the key drivers and assumptions discussed on our earnings call in February .
I encourage you to take these into consideration as you develop your expectations for our second quarter earnings results.
Turning now to page 16 for details rang, the Ameren, Illinois electric distribution rate increase request.
In April Ameren, Illinois submitted a request for an $83 million revenue increase to the ICC in its annual performance based rate update.
Our Illinois customers are continuing to realize the benefits of our significant investments in energy infrastructure.
Since performance based ratemaking began in 2012 reliability has improved over 20%.
Over 1500 jobs have been created J.
J D power ranked Ameren, Illinois number one in residential customer satisfaction in the Midwest among large electric utility providers for 2021.
Major investments include in this request or the installation of outage avoidance and detection technology integration of storm.
Partnering equipment and implementation of new technology to optimize interaction with customers.
We expect the ICC decision by December 2022 with rates effective in January 2023.
On page 17, we provide a financing update we continue to feel very good about our financial position on April 1st Air, Missouri issued $525 million of three 9% Green first mortgage bonds due 2052.
We intend to use these proceeds of the offering to fund capital expenditures and refinance short term debt.
Subsequently, we plan to allocate an amount equal to the proceeds to sustainable projects meeting certain eligibility criteria, including investments in transmission and distribution infrastructure designed to make the system more resilient and improve customer reliability investments in energy efficiency.
Additionally, in order for us to maintain our credit ratings and a strong balance sheet, while we fund our robust infrastructure plan consistent with the guidance in February this year, we expect to issue approximately $300 million of common equity under our aftermarket equity program.
We're well positioned to fulfill our 22000 22022 equity needs through forward sales agreements entered in as of April one and expect to issue three 4 million common shares by the end of this year upon settlement.
Together with the issuance under our 401K in Europe, plus programs, our $750 million ATM equity program is expected to support our equity needs through 2023.
On page 18, we summarize our green bond issuance over the last few years, our sustainability financing framework one of the first of its kind for utility in the nation supports ameren sustainability goals in the current target of net zero carbon emissions by 2050 as well as other social initiatives.
The financing proceeds from the issuance under the framework will be allocated to eligible environmental and social projects, including renewable generation climate change adaptation clean transportation socioeconomic advancement and the employment creation to name just a few.
Finally, turning to page 19, we are well positioned to continue executing our plan we're off to a solid start and expect to deliver strong earnings growth in 2022, as we continue to successfully execute our strategy.
And as we look to the longer term, we continue to expect strong earnings per share growth 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.
Thank you.
I'll now be conducting a question and answer session.
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One of them. Please pull for questions and once again that is star one to ask a question. Thank you.
Thank you first question today will be coming from the line of Jeremy Tonet with Jpmorgan. Please proceed with your questions.
Hi, good morning.
Morning, Jeremy.
Thanks for having me just wanted to start off with the MISO long range change.
Mission planning here at <unk>, just wondering if there's any way that you could quantify what the opportunity set might be specific to ameren here trying to get a sense for how big that could be in your mind.
Yes, 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.
The 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 mill indicate which transmission owner has been assigned those projects. So I would just say stay tuned as I said in the February call wheel.
To have more to discuss on our Q2 Q2 earnings call.
Got it will eagerly await that.
And just wanted to see that there's some new development in Missouri as well as it relates to <unk> and just wondering if that comes through what your thoughts would be there as far as piece of flexibility in how that impacts the ameren is planning.
Yeah. Thanks, Jeremy Yes, we were actually very pleased that yesterday. The legislature did pass Senate Bill 745, which is 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 law.
<unk> with regard to that legislation and I think it's a recognition that the investments that we've been making in Missouri.
It 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 equip.
Equipment throughout our Missouri footprint.
It's also a recognition of the economic development benefits associated with that legislation.
We are having a positive impact as we invest on our economy is through the creation of jobs, we concentrate on using Missouri vendors substantially for the.
The things that we procure in the things that we invest in and Theres. Some great economic development incentive rates associated with this legislation that help Missouri businesses grow as well as attract Missouri businesses to the states. So we're really excited about the legislature passing Senate Bill 745, it now hedge.
<unk> to the Governor's desk for signature and we're excited to be able to extend the benefits of the smart energy plan prospectively.
Got it that's helpful and just one last one if I could on a similar note recent.
Recent eminent domain legislation, Missouri could you comment on the implications for grain belt, MISO or anything else as far as investments that could be related to ameren and mistake going forward there.
Yes, I think I don't think with respect to that legislation that there are any.
Immediate impacts.
They're then 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.
Got it I'll leave it there thank you.
Thank you. Our next question is from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your questions.
Yes.
Hey, good morning. This is various on for Julian Thanks for the time.
Maybe just on the proposed multiyear rate plan for Illinois Electric can you talk a little bit about I know it.
Somewhat early in the process still but can you maybe discuss.
A little bit about what type of performance metrics are being considered as you go through that workshop process.
Yes, you bet. Good morning. This is Michael I would say things are moving along just fine there.
Constructive conversations workshops et cetera, there's a number of different paths that are occurring there is theres one associated with the performance metrics I'll give you a few details there there's one around a multiyear grid plan et cetera, and so I think they are all moving along as we sort of anticipated.
Last year, and so nothing that we see that concern with respect to the performance metrics themselves.
It really is kind of the standard stuff that you would think about from a reliability standpoint, so <unk>.
System average.
Days of disruption you are looking at customer metrics in terms of.
Customer response time on calls et cetera.
So kind of the 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's still should be.
Be on track to conclude here by September of this year and at that point in time, we'd make the decision.
We've said before we see ourselves opting into that.
And then the multiyear rate plan, we need to be filed in January of 'twenty three.
That help.
That does help that's that's very helpful.
Appreciate it and maybe just one other one on the equity financing.
Wanted to confirm that the <unk>.
<unk> agreement that you guys executed for your funding in 'twenty two.
That takes off requirements for the full year other than the drip.
And then also the amounts under the forward agreement.
That's that's part of the 750 included under the ATM program is that is that accurate.
Yes, 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 outlined in February for 2022, and then that is part of that 750 at 750 should get us through the end of 2023.
Okay, great. Thank you for clarifying that I'll leave it here you bet.
Yes.
Our next question is coming from the line of Shar <unk> with Guggenheim Partners. Please proceed with your question.
Hey, good morning, guys.
Sure.
I'm wondering if you could I'd like to just maybe touch on Illinois, Bill in kind of the reliability backdrop seems to be a little bit noisy mid sort of the year over year jump in.
Costs planned retirements under seizure 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 multiyear rate plans in the interim.
Yes sure there is.
A lot there I think first of all the backdrop to your question is that recently, we have been seeing higher power prices here in the Midwest and then recently as a result of the.
<unk> capacity auction, we also saw capacity prices clear at.
At high prices really at a cost of new entry.
And those higher cost of power prices as well as the capacity prices that will be borne by our Illinois customers.
We know it's a retail choice state.
Typically what we've seen is that various retail electric suppliers of supply at about 60% to 65% of our customers and then.
Around 30% to 35% have procured their power through us, but when they do of course.
It's really the Illinois power agency that does the procurement of the power of the capacity and as they've reported those prices were elevated and therefore some of our customers are going to see meaningful increases in their bills starting here in June so I.
I think first of all concern for our customers. We're trying to make sure that we provide education about the impacts of these higher prices. So that people know what to expect and they can take actions.
Accordingly.
And we're also offering bill assistance, where needed as well as of course, reinforcing the opportunities under our energy efficiency programs, which are robust in the state.
And then some customers obviously will be.
Still taking power through local muni aggregation programs things of that nature that may actually not see bill increases immediately but we are certainly concerned about those customers.
Then more broadly I think you say how does this resolve itself I think that first of all as we go into the summer.
There are concerns about.
Just reliability.
I would say when you see prices cleared cone, it's a sign that.
The resources to supply the load with cushion.
Our tight so we expect that MISO will be tight this summer we expect that the MISO itself that is ultimately responsible.
Responsible for ensuring grid reliability is certainly going to be doing everything they can working with stakeholders as we head into warm weather situations to ensure that.
Every possible resources available to supply customers.
Certainly we will be doing all we can as a company, especially when we look at our Missouri energy resources to make sure that they are available and ready to go in the hot weather months and so again I think that's some of the efforts in the short term and the long term we will see how this plays out I mean with the capacity prices clearing accountants.
<unk> signaled to the market that.
More is needed in terms of dispatch will energy resources to meet to meet our load.
And we will have to see how all of that plays out and we'll be working with stakeholders as appropriate throughout throughout all of that too.
To help mitigate that situation in the long term.
As a result as it relates to our multiyear rate plan as Michael said.
Marching towards a filing here in January related to that multiyear rate plan that then the Illinois Commerce Commission would rule on towards the end of 'twenty, two with implementation or excuse me end of 'twenty three with implementation in 2024.
As I said on the prepared remarks, we still have significant aging infrastructure in.
In Illinois, the investments that we're making are producing improved reliability for our customers, ensuring we provide safe reliable service and I think even what we're seeing in terms of.
The tight market situation in Illinois.
Inappropriate backdrop for continued investment in infrastructure, both transmission as well as distribution infrastructure. So we still see the need for the investments that we're making in Illinois and don't see any impact right now on the multi year rate plan filing itself.
And moving forward with that.
From the backdrop that we discussed.
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.
All of that back to Missouri customers are you seeing that today and any sort of quantification of the potential benefit to customers there.
No real quantification of the benefits you are right we are in Missouri right.
Right now have length in terms of our generation profile.
And to the extent that power prices are elevated provides an opportunity for us to enhance margins and all of those margins, 95% of them flow back to our customers in the form of reduced reduced rates. So no quantification of that right now, but youre right in terms of your thoughts on how that works.
Okay terrific. Thanks, guys I'll stop there I appreciate it.
Thank you.
The next question comes from the line of Paul Patterson with <unk> Associates. Please proceed with your question.
Hey, good morning.
Good morning, Paul.
So.
Congratulations on the.
Getting the.
Pieces stuff over.
The Golar and.
And just to follow up on <unk> question on Illinois, you say that it doesn't have an impact on.
On what your.
The company's outlook.
On the needs for.
For your plans, but I'm wondering.
Does the concerns at least.
Ive been seeing by the Illinois legislators and I assume perhaps others.
No.
Does it does it lead to perhaps a better.
A more receptive attitude, perhaps too.
We're more of a volume to what <unk> been proposing.
On the part of policymakers, perhaps in Illinois, or do you think it's pretty much the same situation where just sourcing.
I don't know.
Sort of.
Just sort of drama if you follow what I'm, saying.
Yes, 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 as folks really digesting the news in terms of the higher power and capacity prices and.
And what that means in terms of its implications for policy going forward. We will we will see I think it's premature.
Okay.
And then with respect to just.
The Greenville legislation. It sounds like this is probably going to enable green belt to get built and I am wondering if greenfield.
Yes.
Okay.
Transmission project like that or others.
Might impact.
Your plans for.
For infrastructure development, if you have a big line coming into closer to your area what have you.
Yeah.
With respect to grain belt, obviously, that's a project that's been underway for quite some time.
Has been has been progressing and we had.
Certainly anticipated that one of the things that we've talked about in the past as last year.
I should say in the fall of 2020, when we filed our integrated resource plan one of the things we did as a SaaS.
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 as we think about that project and we think about the update to our integrated resource plan that we'll be filing in June is just the.
Continuing optionality associated with that resource so 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.
Okay, great. Thanks, so much and have a good weekend.
Thanks.
As a reminder to ask a question you May press star one from your telephone keypad.
Our next question comes from the line of Anthony crowd out.
Please proceed with your questions.
Hey, good morning, Marty Good morning, Mike.
Good morning.
Hey, liking 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 a quick two quick questions I guess, one if I think about.
Missouri, and Illinois are both writer first refusal state.
And if the transmission lines are Greenfield does that mean they are competitively bid maybe just wondering what's the distinction you're making between brownfield and greenfield.
But I think <unk> generally got at Missouri, and Illinois, though are not writer first refusal states, which is why that distinction between brownfield and Greenfield is important so it's a brownfield, which generally you should think of us.
New transmission, that's an existing right of way.
We would then expect to be assigned to us as a transmission owner and then the question will be are there segments of projects that are greenfield, which might be subject to competitive bidding and that's what we'll wait to see as it comes out of the MISO is July approval of these projects.
Great and then just another follow up here.
Moving to Illinois, and I guess, maybe.
30 year Treasury, and I think right now, it's about 90 basis points above.
Expectation I think for the year, where you guys had thought it was going to be.
I calculate that as kind of like a seven.
Alwyn I guess are there any headwinds I think about that maybe you could potentially offset that benefit.
Thinking about the year or maybe my numbers wrong on from what the expectation was.
30 year versus where is that now.
Yes.
Got you.
You got the estimate right.
In February we estimated 225 now you got to remember, it's an average over the course of the year. So I think it averaged about $2 25 over the first quarter. So just keep that in mind, but look it's in a good spot I think what we indicated in our guidance for the remainder of the year, we're assuming it averages about $2 seven.
So if you average that with the first quarter that that would be of around two nine or so so you're right. It certainly elevated relative to that if you think about it.
In terms of.
Things that could offset it obviously along with that comes some increased financing costs that we've been incurring a little bit on some of the short term debt other things, but look it's a good tailwind to have at this point there is still a lot of the year left we got a lot of execution to do we're going to stay focused on it and we don't want to get ahead of ourselves.
Great. Thanks for taking my questions and congrats on a good quarter.
Thank you.
Thank you.
At this time there.
A question and answer session I'll turn the floor back to Mr Alliance for closing comments.
Hey, Thank you all for joining us today.
Please we had a strong start to 2022 and we certainly as Michael said remained 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 12, and we look forward to seeing many of you at the AGM financial Forum in the next couple of weeks so with that thank you.
You all and have a great day.
This will conclude today's conference you may disconnect your lines at this time and thank you for your participation.
Yeah.