Q3 2023 Ameren Corp Earnings Call

November 9, 2023

Question and answer session will follow the formal presentation.

Anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. 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. Thank you Mr. Kirk you may begin.

Thank you and good morning on our call with me today are Marty Lyons, our chairman, President and Chief Executive Officer, and Michael <unk>, Our senior Executive Vice President and Chief Financial Officer, as well as the other members of the Ameren management team. This call contains time sensitive data that is accurate only as of the date of today's live <unk>.

Greetings and welcome to Ameren Corporation's third quarter 2023 earnings call. At this time, all participants are in a listen only mode.

Test and redistribution of this broadcast is prohibited we.

We have posted a presentation on the ameren investors dot com homepage that will be referenced by our speakers as noted on page two of the presentation comments made during this conference call may contain statements about future expectations plans projections financial performance and similar matters, which are commonly referred to as forward looking statements. Please.

A brief question and answer session will follow the formal presentation.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.

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. <unk>.

Prior to the forward looking statements section in the news release, we issued yesterday as well as our SEC filings for more information about the various factors that could cause actual results to differ materially from those anticipated now here's martie, who will start on page four.

Thank you Mr. Kirk you may begin.

Thank you and good morning on the call with me today are Marty Lyons, Our chairman President Chief Executive Officer, and Michael <unk>, Our senior Executive Vice President and Chief Financial Officer, as well as the other members of the Ameren management team. This call contains time sensitive data that is accurate only as of the date of today's like Broadcom.

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 2nd.

Cost and redistribution of this broadcast is prohibited.

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 <unk> leadership Ameren has successfully executed a strategy focused on robust energy infrastructure investments supported by constructive energy policies driving strong value for ameren customers communities and shareholders.

And consistent with its 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.

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.

Moving now to page five and our quarterly update.

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 2nd.

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.

What were 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.

Turning to page six our strategic plan integrates our strong sustainability value proposition balancing the four pillars of environmental stewardship positive social impact strong governance and sustainable growth.

Your wires leadership Ameren has successfully executed a strategy focused on robust energy infrastructure investments supported by constructive energy policies driving strong value for ameren customers communities and shareholders.

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 avail.

Available at Ameren investors Dot com.

Moving now to page five and our quarterly update.

More fully details however, we have been effectively integrating our sustainability values and practices into our corporate strategy.

Importantly, it highlights Ameren Missouri's new integrated resource plan filed with the Missouri PSC in late September.

In terms of governance in October the CPA Zealand index once again named Ameren, one of the top three companies in the utility industry for corporate political disclosures and accountability.

Additionally, I'd like to recognize our team's strong commitment to the communities we serve.

Here, we summarized some of the many things we are doing for our customers communities coworkers and shareholders.

In October more than 600, Ameren team members and community leaders came together in person and virtually for our seventh diversity equity and inclusion leadership summit.

And today, we published our updated sustainability investor presentation called leading the way to a sustainable energy future avail.

Available at Ameren investors Dot com.

Featuring nationally recognized leaders in speakers.

Which more fully details how are we have been effectively integrating our sustainability value.

Another example of our team's commitment to our communities is our recently concluded 2023, companywide United way employee campaign, which raised nearly $1 7 million.

Funds, which will go towards supporting more than 60, United way organizations across our service territory.

This is in addition to the United way contribution being made by Amarin.

Again, thank you for all you do our coworkers really do care about making our communities better.

I encourage you to take some time to read more about our strong sustainability value proposition moves.

Moving to page seven.

Yesterday, we announced third quarter 2023 earnings of $1 87 per share compared to earnings of $1 74 per share in the third quarter of 2022.

The key drivers of our third quarter results are outlined on this slide.

As a result of our strong execution, we narrowed our 2023 earnings guidance to a range of $4 30.

Two $4 45 per share.

This compares to our initial guidance range of $4 25.

To $4 45 per share.

Turning to page eight.

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.

Outlander outlined on page nine 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 nine months of this year, increasing spending approximately 6% compared to the year ago period.

These investments will continue to improve the reliability resiliency safety and efficiency of our system as we make our clean energy transition for the benefit of our customers.

During the first nine months of this year Ameren, Missouri installed over 270000 smart meters and 230 smart switches upgraded 55 underground cable miles hardened 32 sub transmission miles and energized eight upgraded substations.

Over 80% of our Ameren, Missouri electric customers now have smart meters, allowing for better understanding of their energy usage and choice amongst several time of use rates offered.

The stores this summer in the Ameren, Missouri service areas area were among the most impactful compared to the last 10 years.

However, we saw the benefits of the smart energy plan investments, we have been making during.

During the July and August storms over 55000 customer outages were prevented due to rapid detection rerouting and restoration of power by automated switches across our system and over 27 million minutes of customer outages were avoided due to these investments.

Investments made to harden the systems withstood over 50 mile per hour winds and experienced minimal damage.

Under the Smart energy plan, we've hardened over 200 miles of lines across our system to mitigate the risks of severe weather events.

Looking forward I'm pleased to say that in October the U S Department of energy awarded Ameren, Missouri, approximately $50 million to provide half the funding needed to accelerate infrastructure upgrades to support reliability for customers in rural and disadvantaged communities statewide.

At our Ameren, Illinois Electric distribution segment during the first nine months of 2023, 4872 Poles or replaced as a result of inspections or storm damage remediation.

190, smart switches were added to improve system reliability.

A total of 100 miles of underground cable were added for new business.

Relocations and replacement of aging cable.

Similar to Missouri, the investments made to harden the system substantially withstood a ratio where wins exceeded 95 miles per hour.

These experiences underscore the value of our ongoing grid investments and costs as customers reliability expectations continue to rise.

The integrity of the Ameren, Illinois natural gas system also continues to improve.

During the first nine months of 2023, the Ameren, Illinois natural gas distribution segment completed the replacement of 43 miles of mechanically couple of gas distribution mains and.

In 2000, and 111 mechanically coupled gas service lines.

And our transmission segment has been focused on executing projects, including line rebuilds, new transmission circuits transformer replacements generator interconnections and other upgrades to ageing infrastructure supporting the economic delivery of renewable energy resources for our customers as well as the overall reliability and resiliency.

<unk> of the transmission system.

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 July as a result of our constructive Ameren, Missouri Electric rate review settlement, new customer rates became effective representing an increase in customer rates of approximately 2% compounded annually. Since April one 2017 prior to Ameren, Missouri adopting plant in service accounting or Pisa.

In September Ameren, Missouri filed an updated integrated resource plan, which I will cover in more detail on the next page.

Also in September we were pleased with the district court's decision to extend the retirement date of the Rush Island Energy Center for March 30, <unk> 2024 to October 15th 2024.

This allows ameren, Missouri sufficient time to complete the transmission upgrades needed to ensure system reliability before the energy centers retired.

We will seek to finance the costs associated with the retirement, including the remaining net book value of the Rush Island Energy Center through securitization.

We expect to file our petition seeking commission approval of the securitization by the end of this year.

Once filed.

The regulatory proceeding is expected to take approximately seven months to complete.

Moving to Ameren, Illinois.

In September and October we received the administrative law judge's proposed orders in the natural gas and electric rate reviews, respectively.

With respect to the electric multiyear rate plan.

We are disappointed with the ALJ recommendation of $9 two 4% allowed Roe.

3% common equity layer and no return on an overfunded post employment benefit plan asset.

We are also disappointed by the ALJ recommendation to scale back or eliminate certain reliability driven investments like Ameren, Illinois storm hardening programs and grid protection microprocessor relay upgrades.

Our filing aligns with the policy goals of the state of Illinois climate and equitable jobs Act.

Last Thursday, we file a brief detailing our concerns with the ALJ proposed electric order and we will see if the Illinois Commerce Commission or ICC will take a different approach before issuing a final decision in mid December.

Moving now to Ameren transmission.

Open houses started in August for the Central Illinois grid transformation program. This.

This program consists of projects that were signed to Ameren by MISO as part of their <unk> tranche one portfolio. The projects are targeted for completion by 2030.

Open houses are held to engage with and gather feedback from communities and stakeholders before filing route plans early next year.

We're committed to working to build transmission lines affordably with robust input from our neighbors and communities impacted by these projects.

<unk> and Ameren, Illinois will work together to build approximately 380 miles of new or upgraded transmission lines across central Illinois, with nearly 85% of the lines slated to be rebuilt in our existing rights of way.

Moving on to operational matters.

Earlier this week the Callaway Energy Center was brought back online following a planned refueling and maintenance outage, which was completed safely.

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 and cleaner energy for our customers turning to page 10.

As I mentioned in September Ameren, Missouri filed an updated integrated resource plan or IRB outlining our lease cost approach to reliably meet customer energy needs in an environmentally responsible manner.

The AARP thoughtfully integrates our new diverse mix of generation resources, while maintaining the availability of our existing energy centers through retirement, which is essential for a reliable and affordable clean energy future.

Plan calls for investment in new dispatch will energy sources, including an on demand 800 megawatt gas simple cycle energy center by 2027 to ensure the long term stability of the energy grid during the deployment of renewable energy generation.

This energy center represents an investment opportunity of $800 million and is expected to provide backup power at times of peak winter and summer demand.

The plan also moves back. The previously announced addition of a 200 megawatt combined cycle Energy Center to 2033 from 2031 to align with the retirement of the Sioux Energy Center in 2030 to the.

The combined cycle Energy center represents an investment opportunity of $1 7 billion.

The AARP also includes planned renewable energy additions of 4700 megawatts by 2036, representing a total investment opportunity of approximately $9 5 billion.

This maintains the previously planned goal of 2800 megawatts of renewables by 2030 and investment opportunity of $5 3 billion.

Further we expect to add 400 megawatts of battery storage by 2030, and an incremental 400 megawatts by 2035 represented investment opportunities of $600 million and $700 million respectively.

Finally, the AARP includes the addition of 200 megawatts of clean Dispatch Bull energy in 2040, and an additional 200 megawatts by 2043, the exact type of resource deployed will be dependent upon cost effective advancements in innovative clean energy technologies in the coming years.

Overall, we believe the plan includes a balanced path to achieving net zero carbon emissions by 2045, and interim reductions of 60% and 85% below 2005 levels by 2030 in 2040, respectively.

It is also consistent with the objectives of the Paris agreement to limit global temperature rise to one five degree Celsius, we remain focused on affordability and reliability as we continue to execute our clean energy transition.

Collectively this IRB provides incremental investment opportunities of approximately $1 $5 billion over those included in our current five year plan.

We will update and roll forward, our overall five year capital plan next February.

Going to page 11.

As laid out in the ERP, 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 CCN.

For the Hudson Solar project and Boomtown Solar project earlier this year.

Construction is now well underway for both projects.

In June we filed with the Missouri PSC for four additional ccn's totaling 550 megawatts of new solar generation across our service territory.

In October the PSC staff filed a recommendation against CCN approval of the 550 megawatts, citing a lack of need for the additional generation.

We believe these projects are needed as a part of our least 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.

Accordingly, the renewable energy tax credits included in the inflation reduction Act will reduce the cost of these projects to our customers. In addition, 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 the CCN filings, we expect decisions in the first quarter of 2024.

We look forward to continuing to engage with stakeholders regarding our future generation needs and clean energy transition.

Turning to page 12.

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 one projects assigned to Ameren is underway and we expect construction to begin in 2026.

MISO request for proposal for its estimated $700 million of tranche, one competitive projects in our territory have been issued.

We submitted our first bid related to the Orient Denny Fairport project in May and we're pleased to be awarded the project late last month.

MISO noted are sound route design engineering and cost containment plan and innovative approach working with stakeholders as key factors in the winning bid.

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 or Illinois.

For the remaining two competitive projects. We've recently submitted a bid for the Skunk River to a paper project in October and the remaining bid is due later this month.

The evaluation process for these competitive projects is expected to take place over the remainder of this year and into mid 2024.

Last we continue to expect MISO to approve a set of tranche two projects by June 32024.

Moving to page 13.

In May the Illinois General Assembly passed house, Bill 344, or five or the transmission efficiency and cooperation law.

Which if enacted would provide incumbent utilities, including Ameren right of first refusal to build MISO long range transmission planning projects in their respective service territories for projects approved by year end 2024.

H, B 3445, which support the clean energy transition.

Benefiting our Illinois customers and communities and the broader MISO region.

The local utility we believe we are well positioned to efficiently build operate and maintain these transmission assets over time.

The writer first refusal would allow for the construction process to begin sooner and the resulting customer benefits to be realized more quickly.

Importantly, we competitively bid each component of our projects and utilize 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.

Such legislation would support the timely and cost effective construction of the MISO long range transmission planning projects and other needed transmission investments.

Unfortunately, the legislation was vetoed by the Governor in August It was not ultimately brought to a vote during the veto 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 a new five year capital plan of.

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.

All of our stakeholders by making our energy grid stronger smarter and cleaner.

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.

<unk> $48 billion does not reflect the incremental investment opportunities included in the recently filed integrated resource plan.

This earnings growth is primarily driven by strong compound annual rate base growth of eight 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.

We will provide an updated number on our call next February along with the new five year capital plan.

<unk>, resulting in an attractive total return the compares favorably with our regulated utility peers.

Turning now to page 15.

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.

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.

Again thank.

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 17 of our presentation.

Yesterday, we reported third quarter 2023 earnings of $1 87 per share.

Compared to $1 74 per share for the year ago quarter.

This page summarizes key drivers impacting earnings in each segment.

<unk>, resulting in an attractive total return the compares favorably with our regulated utility peers.

Under our constructive regulatory frameworks, we experience earnings growth driven by increased investments in infrastructure and all of our business segments.

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.

As you can see the key quarterly drivers are largely consistent with the guidance considerations laid out in February and the supplemental considerations provided on the first and second quarter earnings calls.

Again thank.

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 17 of our presentation.

We were able to deliver strong earnings performance during the quarter as a result of our diverse business mix and disciplined cost management.

Yesterday, we reported third quarter 2023 earnings of $1 87 per share.

Before moving on I will touch on sales trends for Ameren, Missouri, and Ameren, Illinois electric distribution.

Compared to $1 74 per share for the year ago quarter.

Year to date weather normalized kilowatt hour sales to Missouri residential.

This page summarizes key drivers impacting earnings in each segment.

Commercial and industrial customers decreased 10%.

Under our constructive regulatory frameworks, we experienced earnings growth driven by increased investments in infrastructure and all of our business segments.

5% and two 5% percent, respectively compared to last year.

The year to date decrease in residential sales reflects anticipated transition back to the office for many people.

In addition, energy demand was lower as a result of the impacts from severe weather experienced in our service territory this quarter.

We were able to deliver strong earnings performance during the quarter as a result of our diverse business mix and disciplined cost management.

That said, our residential sales remain a little over 3% higher than pre Covid 2019 levels.

Before moving on I'll touch on sales trends for Ameren, Missouri, and Ameren, Illinois electric distribution.

For industrial we expect the year to date decline to moderate over the remaining course of the year as the UAW strike ends coupled with increased demand, including from a general motors plant expansion and a new graphics processing company.

Year to date weather normalized kilowatt hour sales to Missouri residential <unk>.

Commercial and industrial customers decreased 10%.

5% and two 5% percent, respectively compared to last year.

Year to date weather normalized kilowatt hour sales to Illinois customers have declined about 3% on average compared to last year.

The year to date decrease in residential sales reflects anticipated transition back to the office for many people.

Recall that changes in electrical Illinois electric sales no matter the cost do not affect our earnings since we have full revenue decoupling.

In addition, energy demand was lower as a result of the impacts from severe weather experienced in our service territory this quarter.

Moving to page 18, I would now like to briefly touch on our 2023 earnings guidance.

Said, our residential sales remain a little over 3% higher than pre Covid 2019 levels.

We delivered strong earnings in the first nine months of 2023 and are well positioned to finish the year strong.

For industrial we expect the year to date declines to moderate over the remaining course of the year as the UAW strike and coupled with increased demand, including from a general motors plant expansion and a new graphics processing company.

As Marty stated, we have narrowed our 2023 earnings guidance to be in the range of $4 30.

To $4 45 per share.

This is in comparison to our original guidance range of $4 25.

Year to date weather normalized kilowatt hour sales to Illinois customers have declined about 3% on average compared to last year.

The $4 45 per share.

On this page, we highlight select considerations impacting our 2023 earnings guidance for the remainder of the year.

Recall that changes in electric, Illinois electric sales no matter the cause do not affect our earnings since we have full revenue decoupling.

These are supplemental to the key drivers and assumptions discussed on our earnings call in February.

Moving to page 18, I would now like to briefly touch on our 2023 earnings guidance.

I encourage you to take these into consideration as you develop your expectations for the fourth quarter earnings results.

We delivered strong earnings in the first nine months of 2023 and are well positioned to finish the year strong.

Turning now to page 19.

In January and Ameren, Illinois Electric distribution filed its first multiyear rate plan or <unk> with the ICC alright.

As Marty stated, we have narrowed our 2023 earnings guidance to be in the range of $4 30.

To $4 45 per share.

<unk> is designed around three key elements provide.

This is in comparison to our original guidance range of $4 25.

Providing safe and reliable energy to our customers.

Deploying capital in a way that achieves the climate and equitable jobs Act objectives is included our performance metrics and fulfilling the clean energy transition by preparing our system to accept more renewables and electric vehicles over time.

To $4 45 per share.

On this page, we highlight select considerations impacting our 2023 earnings guidance for the remainder of the year.

These are supplemental to the key drivers and assumptions discussed on our earnings call in February.

<unk> detailed a grid modernization plan that includes our planned electric distribution investments.

<unk> take these into consideration as you develop your expectations for the fourth quarter earnings results.

And supports our annual revenue increase request for the next four years.

Turning now to page 19.

In September the ICC staff out of brief recommending a cumulative increase.

In January and Ameren, Illinois electric distribution deposits first multiyear rate plan or <unk> with the ICC.

$322 million in revenue for 2024 through 2027.

<unk> is designed around three key elements.

This includes a return on equity of eight 9%, reflecting the 2022 average 30 year treasury rate plus 580 basis points.

Providing safe and reliable energy to our customers deploying capital in a way that achieves the climate and equitable jobs Act objectives as included in our performance metrics and fulfilling in the clean energy transition by preparing our system to accept more renewables and electric vehicles over time.

It also includes a 50% equity ratio.

Also in September Ameren, Illinois updated its request to reflecting cumulative increase.

$444 million in revenues, which reflect a return on equity of 10, 5% and an equity ratio of 54%.

The MRP details of grid modernization plan that includes our planned electric distribution investments and supports our annual revenue increase request for the next four years.

In October the administrative law judges recommended accumulative increase of $338 million in revenues, incorporating a nine 4% return on equity.

In September the ICC staff filed a brief recommending a cumulative increase of $322 million in revenue for 2024 through 2027.

And a 50% equity ratio.

This includes a return on equity of eight 9%, reflecting the 2022 average 30 year treasury rate plus 580 basis points.

Our grief on exceptions filed last Thursday calls for return on equity of nine 5% and an equity ratio of 52%.

It also includes a 50% equity ratio.

We expect an ICC decision by mid December with new rates effective by January 2024.

Also in September Ameren, Illinois updated its request to reflect a cumulative increase of <unk>.

Turning to page 20 in April we filed our electric distribution annual rate reconciliation to reconcile the 2020 to revenue requirements to actual cost.

$444 million in revenues, which reflect a return on equity of 10, 5% and.

And an equity ratio of 54%.

In August the ICC staff updated their recommended reconciliation adjustment to $110 million base rate increase compared to our updated request of $117 million base rate increase to $7 million variance is driven by a difference in the common equity ratio as we have proposed a 52% compared to the ICC staff's recommended.

In October the administrative law judges recommended accumulative increase of $338 million in revenues, incorporating a nine 4% return on equity and a 50% equity ratio.

Our grief on exceptions fall last Thursday calls for return on equity of nine 5% and an equity ratio of 52%.

Percent.

An ICC decision is required by December 2023, and the full amount would be collected from customers in 2024.

We expect an ICC decision by mid December with new rates effective by January 2024.

Earlier this year, we also filed with the SEC for an annual increase in Ameren, Illinois natural gas distribution rates using a 2020 for future test year.

Turning to page 20 in April we filed our electric distribution annual rate reconciliation to reconcile the 2020 to revenue requirements to actual cost.

In October we filed an updated request for $140 million increase based on a 10, 2% Roe.

The ICC staff updated their recommended reconciliation adjustment to a $110 million base rate increase compared to our updated request of $117 million base rate increase for <unk>.

And a 52% common equity ratio and a $2 9 billion dollar rate base.

$7 million variance is driven by a difference in the common equity ratio as we have proposed a 52% compared to the ICC staff's recommended 50%.

In October the ICC staff recommended a $127 million increase.

Based on the $9 eight 9% return on equity and a 50% common equity ratio, which is consistent with the ALJ proposed order issued in September.

An ICC decision is required by December 2023, and the full amount would be collected from customers in 2024.

Earlier this year, we also filed with the ICC.

We expect an ICC decision by mid November with rates expected to be effective in early December of this year.

For an annual increase in Ameren, Illinois natural gas distribution rates.

A 2020 for future test year.

On page 21 provide a financing update we continue to feel very good about our financial position.

In October we filed an updated request for $140 million increase based on a 10, 2% Roe.

To successfully execute two debt issuances earlier this year, which is outlined on this page.

And a 52% common equity ratio and a $2 9 billion rate base.

Further in order to maintain our credit ratings and strong balance sheet, while we fund our robust infrastructure plan, we expect to issue approximately $300 million of common equity.

In October the ICC staff recommended a $127 million increase based.

Consisting of $3 2 million shares by the end of this year.

Based on the 989% return on equity and a 50% common equity ratio, which is consistent with the ALJ proposed order issued in September.

These shares were previously sold forward under an ATM program with an average initial forward sales price of approximately $93 per share.

We expect an ICC decision by mid November with rates expected to be effective in early December of this year.

Additionally on September 30th we've entered into forward sales agreements.

An ATM program for approximately $92 million to support our 2024 equity needs with an average initial forward sales price of approximately $86 per share.

On page 21 provide a financing update we continue to feel very good about our financial position, we were able to successfully execute two debt issuances earlier this year, which is outlined on this page.

Together with the issuance under our 401, K and drip plus programs. Our ATM equity program is expected to support our equity needs in 2024 and beyond.

Further in order to maintain our credit ratings and strong balance sheet, while we fund our robust infrastructure plan, we expect to issue approximately $300 million of common equity.

We continue to be true.

T J and thoughtful about our financing our robust capital plan.

Consisting of $3 2 million shares by the end of this year.

Turning to page 22 I.

These shares were previously sold forward under an ATM program with an average initial forward sales price of approximately $93 per share.

I'd like to briefly touch on our natural gas business as we head into the winter months.

Both Ameren, Illinois, and Ameren, Missouri natural gas commodity prices are approximately 91% price hedged based on normal seasonal sales and a 100% volumetric hedge based on maximum seasonal sales.

Additionally on September 30, we have entered into forward sales agreements under an ATM program for approximately $92 million to support our 2024 equity needs with an average initial forward sales price of approximately $86 per share.

I am pleased to say in light of the drop in natural gas prices residential natural gas customers in Illinois, and Missouri are expected to see total bill decreases of approximately 13% and 23% respectively compared to the 2022 2023 winter season.

Together with the issuance under our 400, <unk> K and <unk> plus programs. Our ATM equity program is expected to support our equity needs in 2024 and beyond.

We continue to be.

<unk> and thoughtful about our financing our robust capital plan.

Turning to page 23.

We plan to provide 2024 earnings guidance when we release fourth quarter results in February next year.

Turning to page 22.

I'd like to briefly touch on our natural gas business as we head into the winter months.

Using our 2023 guidance as a reference point, we have listed on this page select items to consider when you think about our earnings outlook for next year.

Both Ameren, Illinois, and Ameren, Missouri natural gas commodity prices are approximately 91% price hedged based on normal seasonal sales and 100% volume metrically hedge based on maximum seasonal sales.

With Missouri earnings are expected to be higher in 2024, when compared to 23 due to new electric service rates effective in July 2023.

Pleased to say in light of the drop in natural gas prices residential natural gas customers in Illinois, and Missouri are expected to see total bill decreases of approximately 13% and 23% respectively compared to the 2022 2023 winter season.

We also expect increased investments in infrastructure eligible for plant in service accounting to positively impact earnings.

But returned to normal weather in 2024 would increase Ameren, Missouri earnings by approximately <unk> <unk>.

Compared to 2023 results today, assuming normal weather in the last quarter of the year.

Turning to page 23.

We plan to provide 2024 earnings guidance when we release fourth quarter results in February next year user.

Next earnings from our FERC regulated electric transmission activities are expected to benefit from additional investments in Ameren, Illinois projects made under forward looking formula Ratemaking.

Using our 2023 guidance as a reference point, we have listed on this page select items to consider when you think about our earnings outlook for next year.

For Ameren, Illinois electric distribution earnings are expected.

Beginning with Missouri earnings are expected to be higher in 2024, when compared to 23 due to new electric service rates effective in July 2023.

To benefit in 2024 compared to 2023 from additional infrastructure investments.

We also expect increased investments in infrastructure eligible for a plant in service accounting to positively impact earnings.

Allowed ROE under the new multiyear rate plan effective at the beginning of 2024 will be determined by the ICC as part of the pending rate review compared to the average 2023 30 year Treasury yield.

A return to normal weather in 2024 would increase Ameren, Missouri earnings by approximately <unk> <unk>.

Five 8%, which is currently in place.

Compared to 2023 results today, assuming normal weather in the last quarter of the year.

Ameren, Illinois natural gas volumes are expected to benefit from higher delivery service rates based on a 2020 for future test year.

Next earnings from our FERC regulated electric transmission activities are expected to benefit from additional investments in Ameren, Illinois projects made under forward looking formula Ratemaking.

Moving now to Ameren wide considerations, we expect increased common shares outstanding and higher interest expense at Ameren parent to unfavorably impact earnings in 2024 compared to 2023.

For Ameren, Illinois Electric distribution earnings are expected to benefit in 2024 compared to 2023 from additional infrastructure investments.

Finally, I would know consistent with past practice, our 2024 earnings guidance.

The allowed ROE under the new multiyear rate plan effective at the beginning of 2024 will be determined by the ICC as part of the pending rate review compared to the average 2023 30 year Treasury yield plus five 8%, which is currently in place.

No expectation on coli gains or losses.

And turning to page 24, we are well positioned to continue executing our plan, we expect to deliver strong earnings growth in 2023 and over the long term driven by robust rate base growth and disciplined cost management.

Ameren, Illinois natural gas volumes are expected to benefit from higher delivery service rates based on a 2020 for future test year.

Further we believe this growth will compare favorably with the growth of our peers Ameren shares continue to offer investors an attractive dividend in total shareholder return story.

Moving now to Ameren wide considerations, we expect increased common shares outstanding and higher interest expense at Ameren parent to unfavorably impact earnings in 2024 compared to 2023.

That concludes our prepared remarks, we now invite your questions.

Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.

Finally, I would note consistent with past practice, our 2024 earnings guidance will include no expectation of coli gains or losses.

A confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue. We ask that you. Please limit to one question and one follow up as necessary.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Further we believe this growth will compare favorably with the growth of our peers Ameren shares continue to offer investors an attractive dividend in total shareholder return story that concludes our prepared remarks, we now invite your questions.

Our first question comes from Nicholas Campanella with Barclays. Please proceed with your question.

Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad and.

Hi, everybody, it's Nathan Richardson on for Nick.

Hey, good morning, Nathan the reliant and <unk> before you get to your question I just.

You may not have experienced this but I think many of our participants that we're participating on the webcast missed.

A portion of our prepared remarks because of the.

A systems issue, but just wanted to reassure everybody we will.

Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys, one moment, please while we poll for questions.

Host a 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.

Our first question comes from Nicholas Campanella with Barclays. Please proceed with your question.

Gotcha.

I just want to talk about equity needs first I'm, sorry, if I missed this but in the September slide you talked about $500 million of equity need per year from 2427 and would this still be the case and would you mind, maybe talking about how youre thinking about ATM versus block needs, what you'd be open to.

Hi, everybody, it's Nathan Richardson on for Nick.

Hey, good morning Nathan.

<unk> before you get to your question I just.

You may not have experienced this but I think many of our participants that we're participating on the webcast missed.

Yeah perfect. Good morning. This is Michael Yeah, our equity needs are really unchanged from where they were at the beginning of the year when we issued our.

A portion of our prepared remarks because of the <unk>.

A systems issue, but just wanted to reassure everybody. We will post a 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.

Our five year guidance, we talked about three.

<unk> $300 million of equity that we needed to do in 'twenty, three and then $500 million per year, beginning in 2004 through the balance of.

27.

Gotcha.

Happy to report I think we've said this before we've taken care of those equity needs for 23 of 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 for it about $100 million of the $500 million need for 25 through some forward sales.

I just wanted to talk about equity needs first I'm, sorry, if I missed this but in the September slide you talked about $500 million of equity need per year from 2427 and would this still be the case and would you mind, maybe talking about how youre thinking about ATM versus block needs than what you would be open to.

As we sit here today, we continue to find the ATM to be very effective efficient will continue to evaluate our needs and our capital comes in pretty Ratably. So the ATM works well from that perspective, and so but you know we're always open to if there are better mechanisms to continue to take advantage of.

Yeah perfect. Good morning. This is Michael Yeah, our equity needs are really unchanged from where they were at the beginning of the year we issued.

Five year guidance, we talked about three.

$300 million of equity that we needed to do in 'twenty, three and then $500 million per year, beginning in 2004 through the balance of.

Got it. Thank you and then one last one so sticking with financing you have a robust RFP with a lot of renewables.

27.

Happy to report I think we've said this before we've taken care of those equity needs for 23 of those have been done under 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.

Can you help me think about your position on transferability cash flow and whether that is something you would even analyzing maybe a timeline for that.

Yeah, you bet I mean, it looks like the trends really market continues to evolve here nicely. We continue to see some deals get sorry, starting to get done there which is great.

As we sit here today, we continue to find the ATM to be very effective efficient will continue to evaluate our needs and our capital comes in pretty ratably through the ATM works well from that perspective, and so but you know we're always open to if there are better mechanisms to continue to take advantage of.

I mean, as we kind of step back and think about it is certainly something we could avail ourselves of you know 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 overtime. You mean, ultimately you're going to end up probably goes back to customers, which is great. Because it ends up lowering the cost of those renewables, which is what we all want.

Okay sure. Thank you and then one last one sticking with financing you have a robust RFP with a lot of renewables.

Can you help me think about your position on transferability cash flow and whether that is something you would be utilizing maybe a timeline for that.

But there could be some positive temporary regulatory lag that we may experience from time to time, but not not a huge I think.

Yeah, you bet I mean, it looks like the trends really market continues to evolve here nicely. We continue to see some deals get sorry, starting to get done there which is great.

Replacement any sort of financing needs going forward if that makes sense.

I mean, as we kind of step back and think about it is certainly something we could avail ourselves of overtime, just because we don't have necessarily the tax appetite to use all those when we need to.

Got it makes sense. Thank you very much.

You bet. Thank you.

Our next question comes from Shar <unk> with Guggenheim Partners. Please proceed with your question.

And so as we think about from a financing perspective, I mean, there could be it could be a slight positive right. Just overtime, you 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.

Hey, guys good morning.

Hey, good morning.

Good morning, let me just starting with Illinois.

Can you just maybe talk a little bit about the outlook for the balance of the process here on the multiyear obviously your neighbor in Chicago was very dissatisfied with the ALJ you have briefs out there.

But there could be some positive temporary regulatory lag that we may experience from time to time, but not not a huge I think.

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. If the ALJ stands as is would you look to deferred redeploy capex I'm just kind of curious what the next step could be if you get an adverse decision.

Replacement or any sort of financing needs going forward if that makes sense.

Got it makes sense. Thank you very much.

You bet. Thank you.

Our next question comes from Shar <unk> with Guggenheim Partners. Please proceed with your question.

Yes look sure I think a great great questions overall first of all.

Hey, guys good morning.

Hey, sure good morning.

Good morning, let me just starting with Illinois.

As you.

Referred to we filed our.

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.

A reply brief in September and we believe that what we file there really best supports achievement of the state of Illinois goals is captured in the clean energy and jobs Act and so.

If you look at that that's where we really believe that.

The state would be best served in the customers. The state. So look I would say as I think about the process to date, we've been pleased.

The both the staff and frankly now that the ALJ as well.

Yes look sure I think Greg Great question.

Supported nearly 95% of our planned capital investments over the next four years. So I think that's a positive that's occurred through this process.

Questions overall first of all.

As you know.

Referred to we filed our.

A reply brief in September and we believe that what we file there really best supports achievement of the state of Illinois goals is captured in the clean energy and jobs Act and so.

We as we stated in our prepared remarks are disappointed with the recommended return on equity and capital structure.

Came from the ALJ as well as the treatment of this OPEC.

If you look at that that's where we really believe that the state would be best served in the customers the state so.

Asset.

But the cases and over.

Like I said last week, we filed our brief on exceptions, we articulated our concerns and the reason reasons for seeking a better outcome from the commission and I would say, that's really where you get to the next steps reply briefs on exceptions are due on November 14th in and then we will expect a commission decision by.

I would say as I think about the process to date, we've been pleased.

The both the staff and frankly now that the ALJ as well they've supported nearly 95% of our planned capital investments over the next four years and I think that's a positive that's occurred through this process.

By mid December.

As we said in our again in our prepared remarks, we continue to support our initial asks of a 10, 5% ROE and 54% equity in the cap structure.

As we stated in our prepared remarks are disappointed with the recommended return on equity and capital structure. They.

They came from the ALJ as well as the treatment of this OPEC asset, but the cases and over.

But we did in our <unk>.

Reply brief suggests an alternative that the commission could arrive at 985% Roe or an alternative.

Equity structure of 52% equity.

And coming up with those we looked at alternative data and the record and looked at the averages of comparable utilities as it related to cap structure. So again I'd refer you to our filings for further details on those but we remain hopeful at this point that the commission will meet its going to reach a more constructive and fair outcome, then came from the ALJ and.

Then we will expect a commission decision by by mid December.

As we said in our again in our prepared remarks, we continue to support our initial asks of the 10, 5% ROE and 54% equity in the cap structure.

Then you know at this point I Wouldnt comment on what action we may take.

But we did in our.

Posted commission ruling.

A reply brief suggests an alternative that the commission could arrive at nine 5% Roe or an alternative.

Michael you want to Mexico.

With all those comments and just shy I remind you I think.

About 18% of our rate base today and I again.

Equity.

Structure of 52% equity.

Step back and just look at our overall capital plan you know, we got the $19 7 billion out there over the next five years and.

And coming up with those we looked at alternative data and the record and looked at the averages of comparable utilities as it related to cap structure. So again I would refer you to our filings for further details on those but we remain hopeful at this point that the commission will Mitch is going to reach a more constructive and fair outcome then came from the ALJ.

$48 billion over the next and I think we have really constructive jurisdictions to continue to allocate that capital will continue to be thoughtful about that as Marty said I think.

Where we are from a rate base of capitalization standpoint of that rate review processes is a positive and 95% or so but we have some flexibility to pivot if needed.

And then.

At this point I Wouldnt comment on what action we may take.

Posted commission ruling.

And then just to confirm just the equity ratio growing into it.

Michael you want to Mexico.

No block equity side, just I guess, how do we think about using <unk>.

Agree with all those comments and just short remind you I think.

It's about 18% of our rate base today.

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

Yes.

To 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 capital will continue to be thoughtful about that as Marty said I think where we are from a rate base of capitalization standpoint of that rate review process.

Way to do it.

Okay sure.

This is a positive and 95% or so, but we have some flexibility with lease activity.

Yes, I'm sorry, just.

Build on sort of the answers that I gave in the Michael gave I think as it relates to our overall plan and Michael mentioned that.

If needed.

And then just to confirm just the equity ratio growing into it.

We obviously have a robust portfolio of capital expenditures that we can make across all of our segments.

No block equity side.

Just how do we think about using <unk>.

And we really feel very confident as we sit here today and our continued ability to grow at 6% to 8% in terms of our EPS CAGR.

Yeah, I mean again as I think as we sit here today really just kind of standby 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 and over the over over time.

We've laid out before we've got 48 plus billion of infrastructure pipeline out through 2032 and.

We remain very confident in our overall ability to execute as a company.

In a pretty effective way to do it.

Perfect. Thanks, very much guys and big congrats to Warner, but I have a sense that he is going to be as busy as ever anyway, even in phase II. Appreciate it guys. Robert you are probably right.

Okay sure.

Yes, I'm, sorry, just to build on sort of the answers that I gave in the micro gave I think as it relates to our overall plan and Michael mentioned that.

We obviously have robust portfolio of capital expenditures that we can make across all of our segments.

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

And we really feel very confident as we sit here today and our continued ability to grow at 6% to 8% in terms of our EPS CAGR.

Hey, guys. Good morning. This is various on for Julien.

Kate you taking the question maybe just to start with you you alluded to this and I. Appreciate that you don't have formal 2004 guidance out there, but with the drivers and the visibility that you have now.

As we've laid out before we've got 48 plus billion of infrastructure pipeline out through 2032 and.

And the the none of the ALJ Rex in both V. Illinois cases could you comment on maybe just how you see that six to eight shaping up on a year over year basis does the ALJ sort of give you a basis to still hit that range in 'twenty four.

We remain very confident in our overall ability to execute as a company.

Perfect. Thanks, very much guys and big congrats to Warner, but I have a sense that he is going to be as busy as ever anyway.

Phase II appreciate it guys, Robert you're probably right.

Darius said, Michael here and thanks again for the question look again as we sit here today and we've updated and provided guidance in February that we feel good about that 6% to 8%.

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

Hey, guys. Good morning. This is Darius on for Julien I appreciate you taking the question.

At that midpoint of $4 35.

We gave you some select drivers here right in terms of what we see sort of impacting us kind of year over year.

Just to start with you alluded to this and I. Appreciate that you don't have formal 2004 guidance out there, but with the drivers and the visibility that you have now.

But again feel good about the situation that we're in we again feel good about the eight 4% rate base growth that we have we've had obviously the updated IOP that we released in September we talked about an incremental $1 $5 billion billion.

None of the ALJ Rex and both deal Annoy cases could you comment on maybe just how you see that six to eight shaping up on a year over year basis does the ALJ sort of give you a basis to still hit that range in 'twenty four.

$1 billion of capital that could come into the plant over time, there. So again as we sit here today, we feel very good about that 6% to 8% earnings per share growth.

Darius Michael here and thanks again for the question look again as we sit here today and we.

Updated and provided guidance in February that we feel good about that 6% to 8% thinking about that midpoint of $4 35.

Okay excellent. Thank you for the detail.

Maybe if I can ask one on the competitive transmission projects just looking at your updated slide it looks like the and I. Appreciate these are MISO as estimates, but it looks like the overall competitive opportunity is unchanged at a little bit under $1 billion, but there was maybe within that the content, including Orient any fairport.

We gave you some select drivers here right in terms of what do we see sort of impacting us kind of year over year.

But again feel good about the situation in the winter and we again feel good about the eight 4% rate base growth that we have we've had obviously the updated IOP that we released in September we talked about incremental $1 5 billion.

Woods.

Slightly lower than your previous or in the previous estimates. So I'm. Just curious if you guys could comment on maybe the other projects within that set of competitive opportunities do you see any.

Billion dollars of capital that could come into the plant over time, there. So again as we sit here today, we feel very good about that 6% to 8% earnings per share growth.

Anything moving up or down as the estimates get further refined.

Okay excellent. Thank you for the detail.

And maybe if I can ask one on the competitive transmission projects just looking at your updated slide it looks like the and I. Appreciate these are MISO as estimates, but it looks like the overall competitive opportunity is unchanged at a little bit under $1 billion, but there was maybe within that the content, including Orient any fair.

Yeah happy to answer that question. This is Marty again, so again with respect to the projects that were assigned to us in tranche, one to $1 $8 billion.

We're getting underway with those which is which is fantastic.

And then there were about $700 million of competitive projects and the first one that we bid on with the Orient to Denny Fairport project and we're very pleased that we were selected.

Port.

<unk>.

Slightly lower than your previous or in the previous estimates. So I'm. Just curious if you guys could comment on maybe the other project within that set of competitive opportunities do you see any.

As the winning bidder on that project.

As you mentioned.

The ultimate price that we bid.

Anything moving up or down as the estimates get for the refined.

Was lower than the MISO is original planning estimate and I think in our bids indicative of the kind of work, we do to partner with others, whether those be co ops and munis in the area of our vendors to really deliver a low cost project and as I mentioned MISO as numbers are planning estimates.

Yeah happy to answer that question. This is Marty again, so again with respect to the projects that were assigned to us in tranche, one and the $1 $8 billion.

We're getting underway with those which is which is fantastic.

And then there were about $700 million of competitive projects and the first one that we bid on with the Oreo to Denny Fairport project and we're very pleased that we were selected.

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 as estimates each project is going to be different each project has its own routing issues land acquisition requirements partnering.

As the winning bidder on that project.

As you mentioned.

Ultimate price that we bid was lower than the MISO is original planning estimate.

<unk> et cetera. So.

You really can't extrapolate that outcome too to the entirety.

In our bids indicative of the kind of work, we do to partner with others, whether those be co ops and munis in the area of our vendors to really deliver a low cost project and as I mentioned MISO as numbers are planning estimates.

But again I think we're very pleased 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 Denny <unk> Thomasville Maywood project and we've got one more that we.

<unk> planned to bid on as well the Skunk River I pay them.

Great. Thank you very much for the color appreciate it.

Our next question is from Jeremy Jeremy Tonet with J P. Morgan. Please proceed with your question.

<unk> et cetera, So you really can't extrapolate that outcome too to the entirety.

Hi, good morning.

Good morning.

Just wanted to come back to Illinois electric if I could realize questions have been asked but maybe just to put a finer point on some of the questions here.

But again I think we're very pleased 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's Zachary Thomasville Maywood project and we've got one more that we.

Why do you think the Alj's roe's came out so different than your proposal or are there any specifics in the ALJ filing that you see that justifies this difference or why they viewed the electric <unk> less than the gas row.

Planned to bid on as well the Skunk River I pay them.

Great. Thank you very much for the color appreciate it.

As you see kind of justifying this delta.

I can't really it's Marty again, I really can't comment on why if you will they got to that.

Our next question is from Jeremy Tonet with J P. Morgan. Please proceed with your question.

They used a.

Hi, good morning.

Some discounted cash flow and.

Good morning.

Just wanted to come back to Illinois electric if I could realize questions have been asked but maybe just to put a finer point on some of the questions here.

Capital asset pricing model kind of calculations.

Used some data that was in the record, but again in our reply briefs.

Why do you think the Alj's Roe's came out so different in your proposal or are there any specifics in the ALJ filing that you see that justifies this difference or why they viewed the electric ROE is less than the gas row.

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.

As you see kind of justifying this delta.

I can't really it's Marty again, I really can't comment on why if you will they got to that.

Appropriate data points were used in those calculations, which again in our.

They used a.

And our reply briefs, we addressed and I'd refer you there in terms of our our thoughts in terms of those calculations.

Some discounted cash flow and.

Capital asset pricing model kind of calculations.

Got it understood maybe pivoting towards.

That used some data that was in the record, but again in our reply briefs.

Missouri here and the IOP, what what has been the reaction to the proposed Missouri IOP here, how have conversations with stakeholders been trending over time.

Note.

Certain data that alternatively should be used in our view in those calculations, if they were used and of course.

Yes, I think the.

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.

The conversation that's been had within the state has is very much a balanced one I think that some of the things that we put into this.

<unk> as opposed to our prior one was the addition of 800 megawatts of gas simple cycle in 2027, we made a couple of adjustments to.

And our reply briefs, we addressed and I'd refer you there in terms of our our thoughts in terms of those calculations.

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.

Got it understood maybe pivoting towards.

Missouri here and the IOP, what what has been the reaction to the proposed Missouri ERP here, how have conversations with stakeholders been trending over time.

<unk> hundred megawatt planned combined cycle plant.

And then I'd 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.

Yes, I think the the.

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.

<unk> represents what we believe to be the lowest cost.

As opposed to our prior one was the addition of 800 megawatts of gas simple cycle in 2027, we made a couple of adjustments to.

<unk> two transitioning our portfolio of energy centers over time and maintain importantly, the reliability that our customers expect.

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.

And as we do that making sure that we're being good environmental stewards.

We're able to add there.

<unk> hundred megawatt planned combined cycle plant.

Those resources to bolster reliability, while still hitting carbon emission reduction targets that we've discussed previously.

Then I would 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.

60% by 2030, 85% by 2040, and ultimately that net zero. So again I believe the conversation then really balanced because because of that our focus on affordability our focus on reliability.

<unk> two transitioning our portfolio of energy centers over time, and maintain and importantly, the reliability that our customers expect.

Still hitting our targets in terms of environmental stewardship.

Got it.

Makes sense very helpful. I'll leave it there thank you.

And as we do that making sure that we're being good environmental stewards.

Thank you thanks Jeremy.

Our next question comes from David <unk> with Morgan Stanley. Please proceed with your question.

We're able to add those resources to bolster reliability, while still hitting carbon emission reduction targets that we've discussed previously.

Hey, good morning, Thanks, so much for taking my question.

I'm wondering if you could just speak a little bit too.

60% by 2030, 85% by 2040, and ultimately that net zero. So again I believe the conversation then really balanced because because of that our focus on affordability our focus on reliability, while still hitting our targets in terms of environmental stewardship.

Related to the CCN and renewables.

Missouri, how competitive our renewables currently and just what's your latest in terms of how you are positioned to compete for company owned generation versus contracting.

Yes, with respect to the Missouri renewables earlier this year, the Missouri Public Service Commission approved.

Got it makes sense very helpful. I'll leave it there. Thank you.

Thank you thanks Jeremy.

Two solar projects that we had proposed both the Huck Finn and boomtown solar projects together there are about 350 megawatt lots of investments in there.

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

Hey, good morning, Thanks, so much for taking my question.

Those are projects that we will be constructed and that we will own and we expect the closing date on those to be Q4 of 2020 and before so good.

I'm wondering if you could just.

Speak a little bit too.

Related to the CCN and renewables in the Missouri, how competitive our renewables currently and just what your latest in terms of how you are positioned to compete for company owned generation versus contracting.

Good step forward in terms of commission approval of projects consistent with our ERP in our ownership.

We also filed for Ccs this year for an additional 550 megawatts of solar projects four projects in total.

Yes, with respect to the Missouri renewables earlier this year.

Missouri Public Service Commission approved.

Sure.

And that's going to be proceeding.

Two solar projects that we had proposed both the Huck Finn and boomtown solar projects together. They are about 350 megawatt lots of investments in that.

We expect a commission decision on that early next year.

And again, we do believe it's in the best interests of our customers and communities long term.

As our projects that we will be constructed and that we will own and we expect the closing date on those to be Q4 of 2020 before so.

For these projects to be constructed for our ownership.

In our integrated resource plan, we didn't change the amount of our are anticipated and planned overall renewables versus our prior ERP.

A good step forward in terms of commission approval of projects consistent with our ERP and our ownership. We also filed for Ccs. This year for an additional 550 megawatts of solar projects four projects in total.

We did include an expectation that the costs associated with those renewables.

Would increase however.

Those costs or 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.

<unk>.

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 interests of our customers and communities long term for these projects to be constructed for our ownership.

When we go to that when you look at the AARP, which we laid out.

The timeline on slide 10 that we provided which you see there is a really good balance of the growth in renewable projects, but also investments in.

In our integrated resource plan, we didn't change the amount of our are anticipated and planned overall renewables versus our prior ERP.

Assets that will preserve reliability as I mentioned, a second ago, both the gas simple cycle gas combined cycle some of the battery storage technology.

We did include an expectation that the costs associated with those renewables.

Really going to ensure that we continue to have a reliable system, but the important thing is that this combination of resources along with us.

Would increase however.

Are those costs or 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.

The continued investment in ensuring the reliability of our existing dispatch bull 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.

When we go into that when you look at the AARP, which we laid out.

The timeline on slide 10 that we provided.

You see there is a really good balance of the growth in renewable projects, but also investments in.

And preserving again the reliability that they expect so.

Assets that will preserve reliability as I mentioned, a second ago, both the gas simple cycle 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 Ccs that we're proposing for the renewables really fit with.

With execution of this ERP and then with respect to your last question, while you can't rule out the possibility of.

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.

It is a continued investment in ensuring the reliability of our existing dispatch will 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.

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.

And preserving again the reliability that they expect so again, the Ccs that we're proposing for the renewables really fit with.

Great. Thanks for all that color very helpful and I was wondering if you could also touch on your expectations here for load growth going forward, we've seen weather normal load still trending down through most of the year I'm wondering if you could give your perspective on.

With execution of this ERP and then with respect to your last question, while you can't rule out the possibility of.

When that might settle down and outlook for industrial sales to within that.

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 as.

Yeah, you bet. Good morning, David It's Michael Yeah. You know this year has obviously been a little interesting you'll see some of the decreases in residential you know I think we attribute that to a couple of things we had some significant storms a number of them over the summer that certainly contributed a bit to that.

We really do believe in the long term that our ownership and operation of these assets.

It provides the long term lowest cost for our customers.

And then also there's still just working through I think.

Great. Thanks for all that color very helpful.

Going back from working at home into the office and so you're certainly seeing that transition as well and that 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've tried to get it as close as close as possible I do think it is beginning to level out as.

I was wondering if you could also touch on your expectations here for load growth going forward, we've seen weather normal load still trending down through most of the year and I'm wondering if you could give your perspective on.

When that might settle down and outlook for industrial sales to within that.

Yes, you bet good morning, David It's Michael Yeah. 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 a number of them over the summer that certainly contributed a bit to that.

We kind of look forward.

I mean again I think I pointed out if you look at our residential side of things I mean, youre 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. Two so ultimately you believe that's going to continue to transition into some sales grow.

And then also there's still just working through I think.

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 tried to get it as close as close as possible I do think it is beginning to level out as.

<unk>.

Thank you on the commercial side, we continue to see some positives I mean, the industrial and noted that obviously were impacted by the.

The strike it.

GM there was going on for some period of time that that obviously seems to be concluding there was actually an expansion that has occurred there and so we should see that be a positive development going into the into the remainder of the fourth quarter.

We kind of look forward.

I mean again I think I pointed out if you look at our residential side of things I mean, youre seeing about 3% growth relative to where we were kind of pre pandemic.

And then I think there is some positive developments that we're seeing just broadly on the industrial side as well that are adding smaller growth. So I mean, as we look out in the future I think we still stick by this.

Other positive is we actually have customer growth year to date two so ultimately you believe that's going to continue to transition into some sales growth.

About <unk>, 5% load growth over time.

That is the ability hopefully to move up as some of this industrial continues to evolve, but that's where we are today David.

I think on the commercial side, we continue to see some positives in the industrial and noted that obviously were impacted by the.

The strike it.

Okay, great. Thanks, so much see you soon.

GM that was going on for some period of time that obviously seems to be concluding there is actually an expansion that has occurred there and so we should see that be a positive development going into the into the remainder of the fourth quarter.

Our next question is from Paul.

Patterson with Glen Rock Associates. Please proceed with your question.

Hey, good morning, guys.

Good morning, Paul.

Just wanted to.

I'm sorry, if I missed this because I did have some tech problems, but.

The.

Yeah.

Asking you about the competitive bid and I was wondering did you guys have any.

That is the ability hopefully to move up as some of this industrial continues to evolve, but that's where we are today David.

Got it that you guys provided or can provide on <unk>.

What kind of returns you're seeing in the competitive transmission versus them.

Yeah.

Okay, great. Thanks, so much see you soon.

Just in general.

Our next question is from Paul.

Yeah, Paul first of all I do apologize again for detector technical difficulties, you and others experienced.

Patterson with <unk> Associates. Please proceed with your question.

Hey, good morning, guys.

Apologize for that and the inconvenience.

Good morning, Paul.

I don't think we have anything that we could point to in terms of return I would say this I mean, when we bid on these projects, we're very cognizant of.

Just wanted to.

Apologize if I missed this because I did have some problems but.

The.

What we think our cost of capital is and what.

He was asking about the competitive.

What appropriate return expectations are for these projects. So that's certainly taken into consideration when.

And I was wondering did you guys have any.

Data that you guys provided or can provide on kind of what kind of returns you're seeing in the competitive transmission versus them.

And when making any bid so I think the.

<unk> should be that as the winning bidder of this project that we expect to earn.

Just in general.

Yeah, well first of all I do apologize again for detector technical difficulties, you and others experienced.

Yes, a fair return on the on the project.

Sure Okay.

Maybe it's competitive to tell us what what that might be is that right or.

Apologize for that and the inconvenience.

I don't think we have anything that we could point to in terms of return I would say this I mean, when we bid on these projects, we're very cognizant of.

Yeah, I think so I mean, we'll give some consideration post the call or whether there's anything we can point to but yeah I think that.

Probably not something that I think we can point to today.

What we think our cost of capital is and what.

Okay cool.

What appropriate return expectations are for these projects. So that's certainly taken into consideration when.

The second question I have is on the ROE for legislation.

Which you guys plan on pursuing perhaps in the spring it seems according to floods and stuff.

When making any bid so I think the assumption should be that is a winning bidder of this project that we expect to earn.

Yeah.

I'm wondering about the leak the need.

Yes, a fair return on the on the project.

That's the case at the Supreme Court.

That Roper case in Texas.

Sure Okay.

The Supreme Court may or may not if it doesn't get search Rory.

I guess, maybe it's competitive to tell us what that might be is that right or.

Oh I'm sure you guys are following the cave.

Yes, I think so I mean, we'll give some consideration post the call to whether there's anything we can point to but yeah I think that.

What does that mean with respect to.

The Roe for.

The ROE for situation.

Probably not something that I think we could point to today.

Generally speaking I mean, how should we think about that.

Okay cool.

Well I think Paul as it relates to Duke Court cases, as you know we watch court case around the country, both in Texas as well as a couple of other states we've seen.

Yeah.

The second question I had was on the road for legislation.

Which you guys plan on pursuing perhaps in the spring it seems according to the slides and stuff.

<unk>.

Yeah.

We've seen them run into problems in Texas, we've seen the Rovers upheld in other states. So we're going to continue to watch the developments across all of these cases.

I'm wondering about the leak the need.

That's the case at the Supreme Court.

Roper case in Texas.

The Supreme Court may or may not if it doesn't get search Rory.

And then make sure that whatever we bring forward, which we do plan to bring forward next year.

Well I'm sure you guys are following the cave.

What does that mean with respect to.

These these rights of first refusal both in Illinois and Missouri.

Two.

<unk> the ROE for <unk>.

That we make appropriate adjustments to.

The <unk> situation.

Generally speaking I mean, how should we think about that.

The proposed legislation too.

Well I think Paul as it relates to the core cases, as we watch court case around the country, both in Texas as well as a couple of other states we've seen.

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.

No.

We've seen them run into problems in Texas, we've seen the ROE for is upheld in other states. So we're going to continue to watch the developments across all of these cases.

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.

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.

I think we just talked about this.

That we make appropriate adjustments to.

That we won which was this oriented Danny Fairport project and I think it just goes to show that we are a low cost constructor, we are a low cost operator.

The proposed legislation too.

Ensure that they're able to withstand legal challenges and hold up.

And we do believe that these projects have very good value for customers and when MISO puts these forward tranche, one whats to come in tranche two.

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.

These projects have very good benefit to cost ratios.

By not assigning those to the incumbent transmission, operator by putting them out forbid youre 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 or in the best interests of our customers.

I think we just talked about that we won which was this oriented Danny Fairport project and I think it just goes to show that we are a low cost constructor, we are a low cost operator.

The citizens of both the states of Illinois, and Missouri, and we look forward to working with stakeholders.

And we do believe that these projects have very good value for customers and when MISO puts these forward tranche, one and whats to come in tranche two.

As we move towards the next legislative session to really build a stronger coalition and make sure people really understand.

The value and we will work with all stakeholders to put forward legislation that we think not only can pass it should pass but that can withstand any core challenges. So back to your question. Paul will continue to monitor these cases, as we have and adjust as needed.

These projects have very good benefit to cost ratios in <unk>.

By not assigning those to the incumbent transmission operator by putting them out forbid youre, just 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 or in the best interests of our customers.

Okay.

Absolutely I hear you on your ability to demonstrate your competitiveness and stuff, but just I guess, what I'm, saying is I guess, what I'm asking about is the Supreme Court I guess, what I'm wondering is with that and validate roofers default.

The citizens of both the states of Illinois, and Missouri, and we look forward to working with stakeholders.

Across the country or marine or do you see this as being specific to.

As we move towards the next legislative session to <unk>.

And really build a stronger coalition and make sure people really understand.

I guess I'm, saying when I go to a different way from that.

Three questions. If you follow me to sort of I'm trying to figure out for my own edification sort of like.

The value and we will work with all stakeholders to put forward legislation that we think not only can pass it should pass.

What happens if it doesn't grants or Rory I guess that would mean the fifth circuit would stand and if that is the case, what how do we think about.

But can withstand any core challenges so back to your question Paul will continue to monitor these cases, as we have and adjust as needed.

The rope.

People are where I'm coming from.

Well I I do and I guess, we'd have to see.

Okay.

I hear you on your ability to demonstrate.

How the Supreme Court rules, what they say, but.

And stuff, but just I guess, what I'm, saying is I guess, what I'm asking about is the Supreme Court I guess, what I'm wondering is would that and validate roofers depo.

When we talked about this a little bit on the last call. When we looked at taxes, we thought it was really more applicable to the situation in Texas.

Across the country or even or do you see this as being specific to.

As when we looked at crafting the rights of first refusal we've been putting forward more aligned with states, where the Rovers have been upheld in the courts. So I think we would ultimately have to look at the ultimate Supreme Court decision and its applicability, but.

I guess I'm, saying.

When we've done that.

Industry question. If you follow me to sort of I'm trying to figure out for my own edification sort of like.

What happens if it doesn't grants or Lori I guess that would mean the fifth circuit would stand and if that is the case, what how do we think about.

I guess I can't really comment further at this time Paul.

The rope.

People, where I'm coming from.

I appreciate it thanks, so much and.

Well I do and I guess, we'd have to see.

Thanks.

How the Supreme Court rules, what they say, but.

Thanks, a lot you bet. Thank you see you soon.

When we talked about this a little bit on the last call. When we looked at taxes, we thought it was really more applicable to the situation in Texas.

Our final question comes from Anthony <unk> with Mizuho. Please proceed with your question.

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 based opportunities I'm, just wondering what do you think is the most challenging part of the plan that you have.

Yeah.

Yeah, Hey.

It's Michael you know look I think it's just about continued execution around all of these projects right. I mean, I think we got some robust rate base growth of eight 4% as you just noted $20 billion of capital plans, we got to continue to execute these well get them into service to make sure we realize all the benefits associated with them.

I guess I can't really comment further at this time Paul.

I appreciate it thanks, so much.

Thanks.

Thanks, a lot you bet. Thank you see you soon.

Our final question comes from Anthony <unk> with Mizuho. Please proceed with your question.

Obviously, you know we're in a different financing environment today than we were a couple of years ago. So that it creates.

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.

Some headwinds you got to continue to work through but I mean.

A lot of.

Ultimately I think we talked about this in the past, we got a number of mechanisms to recover those.

Capital opportunities rate based opportunities.

Wondering what do you think is the most challenging part of the plan that you have.

Financing cost pretty rapidly through both on the Illinois side, you can always accelerate some rate reviews, if we needed to on the Missouri side.

Yeah.

It's Michael look I think it's just about continued execution around all of these projects right. I mean, I think we got some robust rate base growth of eight 4% as you just noted $20 billion of capital plans, we got to continue to execute these well get them into service to make sure we realize all the benefits associated with them.

But at the end of the day I think it really comes back down to just an affordability opportunities just making sure that we keep costs as low as we possibly can for customers as we work through this incredibly important clean energy transition Marty.

Martin anything to add to that.

No I think thats, a well covered Anthony any of those questions.

Obviously, we're in a different financing environment today than we were a couple of years ago, So that creates.

I'm good. Thanks, so much ill catch you guys up in Phoenix.

Some headwinds are going to continue to work through but I mean.

Look forward to seeing the next week.

Ultimately I think we've talked about this in the past we've got a number of mechanisms to recover those.

Yeah.

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

Financing cost pretty rapidly through both on the Illinois side, you can always accelerate some rate reviews that we needed to on the Missouri side.

Well. Thank you all for joining us today once again I apologize for the technical difficulties some of your experiences and you experienced and as I mentioned, we will make sure that we opposed to replay of this call as quickly as possible I think what you heard today is we have really had a strong start to 2023.

But at the end of the day I think it's really it just comes back down to just an affordability opportunities just making sure that we keep costs as low as we possibly can for customers as we work through this incredibly important clean energy transition.

Anything to add to that.

We've gotten through these important summer months, and just where there's just a couple of months left we mean.

No I think thats, a well covered Anthony any of those questions.

We remain very confident in our ability to achieve our earnings per share growth.

No I'm good. Thanks, so much ill catch you guys up in Phoenix.

Look forward to seeing you next week.

Goals for this year and earnings per share range that we've outlined today, we make sure that we're focused on continuing to deliver strong value.

Yeah.

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

Both for our customers our communities as well as for our shareholders as we underscored today, we continue to expect 6% to 8% earnings per share growth.

Well. Thank you all for joining us today once again I apologize for the technical difficulties. Some of your experiences you experienced and as I mentioned, we will make sure that we post a replay of this call as quickly as possible I think what you heard today is we have really had a strong start to 2023.

For 23% to 27% supported by strong investment in regulated infrastructure and rate base growth of eight 4% compound annual rate from 2022 to 2027, so feel very good about our execution of our plan and I. Thank you all for joining us and look forward to seeing you all soon and have a great day.

Gotten through these important summer months, and just where there's just a couple of months left we mean.

We remain very confident in our ability to achieve our earnings per share growth.

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

<unk> for this year and earnings per share range that we've outlined today, we make sure that we're focused on continuing to deliver strong value both for our customers our communities as well as for our shareholders as we underscored today, we continue to expect 6% to 8% earnings per share growth.

423% to 27% supported by strong investment in regulated infrastructure and rate base growth of eight 4% compound annual rate from 2022 to 227, so feel very good about our execution of our plan and I. Thank you all for joining us and look forward to seeing you all soon and have a great day.

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

Q3 2023 Ameren Corp Earnings Call

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