Q1 2024 Ameren Corporation Earnings Call
Operator: Greetings and welcome to Ameren Corporation's first quarter 2024 earnings call. At this time, all participants are on a listen. The 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.
Greetings and welcome to Ameren Corporation's first quarter 2024 earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.
Operator: As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Andrew Kirk, Director of Investor Relations and Corporate Modeling for Ameren Corporation. Thank you, Mr. Kirk.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Andrew Kirk Director of Investor Relations and corporate modeling for Ameren Corporation. Thank you Mr. Kirk you may begin.
Andrew Kirk: Thank you and good morning. On the call with me today are Marty Lyons, our chairman, president, and chief executive officer, and Michael Moehn, our senior executive vice president and chief financial officer, as well as 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 broadcast, and redistribution of this broadcast is prohibited. We have posted a presentation on the Amereninvestors.com homepage that will be referenced by our speakers.
Andrew Kirk: Thank you and good morning on the 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 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 broadcast.
Andrew Kirk: And redistribution of this broadcast is prohibited 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 some of them similar matters.
Andrew Kirk: 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 refer to the forward-looking statements section in the news release we issued yesterday, as well as in our SEC filings, for more information about the various factors that could cause actual results to differ materially from those anticipated. And here's Marty, who will start on page 4. Thank you, Andrew. Good morning, everyone.
Andrew Kirk: Which are commonly referred to as forward looking statements. Please refer 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.
Martie: Here's martie, who will start on page four.
Martin J. Lyons: And thank you for joining us today as we discuss our first quarter 2024 earnings results. Our team continues to successfully execute on our strategic plan across all of our business segments, allowing us to deliver for our customers, shareholders, and the environment while laying a strong foundation for the future. Turning now to page 5.
Martie: Andrew Good morning, everyone and thank you for joining us today as we discuss our first quarter 2024 earnings results.
Andrew Kirk: Our team continues to successfully execute on our strategic plan across all of our business segments, allowing us to deliver for our customers shareholders and the environment.
Andrew Kirk: A strong foundation for the future.
Turning now to page five yes.
Martin J. Lyons: Yesterday, we announced first quarter 2024 earnings of 98 cents per share compared to earnings of $1 per share in the first quarter of 2023. The key drivers of our first quarter results are outlined on this slide. Overall, our operating performance was strong during the quarter. We had periods of extreme cold weather in January, and our natural gas and electric systems, and our operating teams, performed well. On balance, however, weather was mild during the quarter, marked by unseasonably warm temperatures in February and March.
Andrew Kirk: Yesterday, we announced first quarter 2024 earnings of <unk> 98 per share compared to earnings of $1 per share in the first quarter of 2023.
Andrew Kirk: The key drivers of our first quarter results are outlined on this slide.
Overall, our operating performance was strong during the quarter.
Andrew Kirk: We had periods of extreme cold weather in January and our natural gas and electric systems and our operating teams performed well on.
Andrew Kirk: On balance however, weather was mild during the quarter marked by unseasonably warm temperatures in February and March.
Martin J. Lyons: Despite the mild temperatures, our retail sales grew, driven by encouraging signs of customer growth and usefulness. While we experienced higher operations and maintenance expenses, that was driven largely by a charge for proposed additional mitigation relief related to the Rush Island Energy Center new source review litigation. Despite the year-to-date weather headwinds and the Rush Island charge, our team is taking steps to contain spend and will remain on track to deliver within our 2024 earnings guidance range of $4.52 per share to $4.72 per share. I will provide an update on our Rush Island Energy Center proceedings, and Michael will cover the first quarter and balance of the year earnings results in a bit more detail later. Moving to page six.
Andrew Kirk: Despite the mild temperatures are retail sales grew driven by encouraging signs of customer growth and usage.
Andrew Kirk: While we experienced higher operations and maintenance expenses.
Andrew Kirk: That was driven largely by a charge for proposed additional mitigation relief related to the Rush Island energy.
Andrew Kirk: Energy Center, New source review litigation.
Andrew Kirk: Despite the year to date weather headwinds and the Rush Island charge. Our team is taking steps to contain spend and we remain on track to deliver within our 2024 earnings guidance range of $4 52.
Andrew Kirk: Per share to $4 72 per share.
Speaker Change: I will provide an update on our Rush Island Energy Center proceedings, and Michael will cover the first quarter and balance of the year earnings results and a bit more detail later.
Speaker Change: Moving to page six.
Martin J. Lyons: On our call in February, I highlighted some of our top priorities for 2024 as we invest strategically, enhance our operating jurisdictions, and optimize our business process. Our team's unwavering commitment to these objectives has already begun to produce results, as you can see on page 7. Our investments continue to improve the reliability, resiliency, safety, and efficiency of our service to our customers. In the first three months of this year, we have invested significant capital for the benefit of our customers. During the quarter, Amarillo, Missouri installed over 55,000 smart meters and 60 smart switches.
On our call in February I highlighted some of our top priorities for 2024, as we invest strategically enhance our operating jurisdictions and optimize our business processes are.
Speaker Change: Our team's unwavering commitment to these objectives has already begun to produce results as you can see on page seven.
Speaker Change: Our investments continue to improve the reliability resiliency safety and efficiency of our service to our customers in.
Speaker Change: In the first three months of this year, we have invested significant capital for the benefit of our customers.
Speaker Change: During the quarter Ameren, Missouri installed over 55000 smart meters 60, smart switches 15 miles of energized underground cable eight miles of hardened overhead lines and upgraded five substations.
Martin J. Lyons: 15 miles of energized underground cable, 8 miles of hardened overhead lines, and upgraded 5 substations. In Illinois, our first quarter investments included replacing 550 poles due to standard inspections and storm damage, replacing switchgear at a key substation, and installing 30 miles of underground cable for relocations, new customers, and aged cable replacement. In addition, our transmission business is on track to complete over 15 new or upgraded transmission substations and 45 miles of new or upgraded transmission lines in the first half of the year.
Speaker Change: In Illinois, our first quarter investments included replacing 550 Poles due to standard inspections and storm damage, replacing switch gear that a key substation and installing 30 miles of underground cable for relocations, new customers and aged cable replacement.
Speaker Change: Further our transmission business is on track to complete over 15, new or upgraded transmission Substations and 45 miles of new or upgraded transmission lines in the first half of the year.
Martin J. Lyons: These critical investments support our commitment to delivering safe and reliable energy for the benefit of our customers, and we are seeing the benefits in 2024 in terms of reduced outages and shorter outage durations as a result of spring storms. For example, during a recent April storm, over 7,500 Missouri customer outages were prevented due to rapid detection, rerouting, and restoration of power by automated switches across our system. Additionally, over 2.3 million minutes of customer outages were avoided due to these investments.
Speaker Change: These critical investments support our commitment to delivering safe and reliable energy for the benefit of our customers.
Speaker Change: And we are seeing the benefit in 2024 in terms of reduced outages and shorter outage durations as a result of spring storms.
Speaker Change: For example, during a recent April storm over 7500, Missouri customer outages were prevented due to rapid detection rerouting and restoration of power by automated switches across our system and over $2 3 million minutes of customer outages were avoided due to these investments.
Martin J. Lyons: Moving on to first quarter regulatory and legislative outcomes, in March, Emory, Missouri, received Missouri PSC approval for our largest ever solar investment. Three projects representing a total of 400 megawatts, capable of powering approximately 73,000 homes. The approval of Certificates of Convenience and Necessity, or CCNs, for these projects is another constructive step along the pathway to executing our AMR Missouri Integrated Resource Plan, or IRP. On the legislative front, the Missouri General Assembly is addressing power quality and reliability by considering bills to enhance and extend the current Plant-in-Service Accounting, or PISA, legislation that would support investment in dispatchable resources and reliability.
Speaker Change: Moving on to first quarter regulatory and legislative outcomes in.
Speaker Change: In March Ameren, Missouri received Missouri, PSC approval of our largest ever solar investment.
Speaker Change: Three projects, representing a total of 400 megawatts capable of powering approximately 73000 homes.
Speaker Change: The approval of certificates of convenience and necessity or CCN for these projects is another constructive step along the pathway to executing our Ameren, Missouri integrated resource plan for IRT.
Speaker Change: On the Legislative front, the Missouri General Assembly is addressing power quality and reliability by considering bills to enhance and extend the current plant in service accounting or pizza legislation that.
Speaker Change: Would support investment and dispatch will resources and reliability piece.
Martin J. Lyons: PISA has supported much-needed reliability investments in the state's energy grid over the past five years. However, these bills, House Bill 1746 and Senate Bills 740 and 1422, have strong bipartisan support. Time is short, and the current General Assembly session ends Friday, May 17.
Speaker Change: Pizza has supported much needed reliability investments in the state's energy grid over the past five years, while these bills, how still $17 46, and Senate Bill 740 <unk>.
Speaker Change: 2014, 22 have strong bipartisan support.
Speaker Change: In the short and the current General Assembly session ends Friday may 17th.
Martin J. Lyons: While the legislature has many priorities, we will continue to work with key stakeholders towards passing. At Ameren Transmission, progress continues to be made on the long-range transmission projects, which I will cover in more detail in a moment. Turning to Illinois Electric Delivery. We continue to diligently work for approval from the Illinois Commerce Commission, or the ICC, of an electric grid investment plan, revised revenue requirements incorporating ongoing and prospective investments, and an overall improved regulatory environment.
Speaker Change: While the legislature has many priorities we will continue to work with key stakeholders towards passage.
Speaker Change: At Ameren transmission progress continues to be made on the long range transmission regionally beneficial projects, which I will cover in more detail in a moment.
Speaker Change: Turning to Illinois electric delivery.
Speaker Change: We continue to diligently work for approval from the Illinois, Commerce Commission or the ICC.
Speaker Change: But electric grid investment plan revised revenue requirements, incorporating ongoing and prospective investments and an overall improved regulatory environment.
Martin J. Lyons: In January, the Commission granted a partial rehearing of our multi-year rate plan to address the base level of investment needed to operate the grid reliably. Subsequently, in February, we filed an updated plan as part of the rehearing proceeding. Then, in March, we filed our revised multi-year grid and rate plans to address the Commission's findings stated in their December order. The rehearing and revised multi-year grid and rate plan proceedings are operating in parallel and would update rates for 2024 through 2027. We expect a decision from the ICC on the rehearing in June, which would provide a 2024 interim rate adjustment by July.
Speaker Change: In January the commission granted a partial rehearing of our multiyear rate plan to address the base level of investment needed to operate the grid reliably.
Speaker Change: Subsequently in February we filed an updated plan as part of the rehearing proceeding.
Then in March we filed a revised multiyear grid and rate plans to address the Commission's findings stated in their December order.
Speaker Change: The rehearing and revised multiyear grid and rate plan proceedings are operating in parallel.
Speaker Change: And would update rates for 2024 through 2027.
Speaker Change: We expect a decision from the ICC on the rehearing in June which would provide a 2024 interim rate adjustment by July.
Martin J. Lyons: We expect an ICC decision on the revised multi-year grid and rate plans by the end of the year, which would revise rates beginning January 2025. We continue to work with all impacted stakeholders to advocate for constructive regulatory frameworks and outcomes that support the state's energy transition goals. Our ability to invest in and deliver reliable and affordable energy is essential for our customers and the communities we serve and will support continued growth in our region. Moving on to operational matters. We remain committed to maintaining disciplined cost management to hold operations and maintenance expenses flat in 2024-2023.
We expect an ICC decision on the revised multiyear grid and rate plans by the end of the year.
Which would be revised rates beginning in January 2025.
Speaker Change: We continue to work with all impacted stakeholders to advocate for constructive regulatory frameworks and outcomes that support the state's energy transition goals.
Speaker Change: Our ability to invest and deliver reliable and affordable energy is essential for our customers and the communities, we serve and will support continued growth in our region.
Speaker Change: Moving on to operational matters.
Speaker Change: We remain committed to maintaining disciplined cost management to hold operations and maintenance expenses flat in 2024 to 2023 levels.
Martin J. Lyons: I'd like to express my sincere appreciation to our Ameren team members who are working efficiently, collaboratively, and safely to serve our customers. Now moving to page 8 for details on the Rush Island securitization case in Amherst, Missouri. Our request with the Missouri PSC to securitize the remaining balance of the Rush Island Energy Center and other related costs continues to make progress. In March, the Missouri PSC staff recommended a securitization of $497 million, as compared to our request of $519 million.
Speaker Change: Like to express my sincere appreciation to our Ameren team members, who are working efficiently collaboratively and safely to serve our customers.
Speaker Change: Now moving to page eight for details on the Rush Island securitization case at Ameren, Missouri.
Speaker Change: A request with the Missouri PSC to securitize, the remaining balance of the Rush Island Energy Center and other related costs continues to make progress.
Speaker Change: In March the Missouri, PSC staff recommended securitization of $497 million as compared to our request of $519 million.
Martin J. Lyons: Refinancing these investments through the issuance of securitized bonds versus financing and recovery through traditional ratemaking will save our customers millions of dollars. Hearings were completed in April, and we expect the PSC's decision by June 21st. Now turning to page 9 for an update on the new source review proceeding for Rush Island. As previously reported in 2017, the U.S. District Court of Eastern Missouri issued an order requiring the installation of a flue gas desulfurization system, or scrubbers, on our Rush Island Energy Center for violating the new source review provisions of the Clean Air Act and installing a dry sorbent injection system at our Labadee Energy Center as mitigation for excess emissions at The 8th Circuit upheld the District Court's ruling with respect to the installation of scrubbers at Rush Island but overturned the decision with respect to Labadee.
Speaker Change: Refinancing these investments through the issuance of securitized bonds versus financing and recovery through traditional ratemaking will save our customers millions of dollars.
Speaker Change: Hearings were completed in April and we expect the Psc's decision by June 'twenty one.
Speaker Change: Now turning to page nine for an update on the new source review proceeding for Rush Island.
Speaker Change: As previously reported in 2017, the U S District Court of Eastern Missouri issued an order requiring the installation of a flue gas <unk> system or scrubbers on our Rush Island Energy Center for violating new source review provisions of the clean Air Act and install a dry sorbent injection system at.
Speaker Change: Labadie Energy center as mitigation for excess emissions at Rush Island.
Upon appeal.
The <unk> circuit upheld the district court's ruling with respect to the installation of scrubbers at Rush Island, but overturned the decision with respect to <unk>.
Martin J. Lyons: Subsequently, we made the decision to accelerate the planned retirement of our Rush Island Energy Center, which was more economical for our customers than installing scrubbers. The District Court approved Ameren's retirement proposal and established a retirement date of no later than October 15, 2024, to allow for the completion of various transmission reliability projects. The U.S. Department of Justice is seeking additional mitigation relief beyond the retirement of the Energy Center. In March of this year, the district court ordered both parties to file proposals outlining additional mitigation relief for the court to consider.
Speaker Change: Subsequently, we made the decision to accelerate the planned retirement of our Rush Island Energy Center, which was more economic for our customers than installing scrubbers.
Speaker Change: The District Court approved Ameren retirement proposal and established a retirement date of no later than October 15, 2024 to allow for the completion of various transmission reliability projects.
Speaker Change: The U S Department of Justice is seeking additional mitigation relief beyond the retirement of the energy Center in March of this year. The district Court ordered both parties to file proposals outlining additional mitigation relief for the court to consider.
Martin J. Lyons: On Wednesday, AMR Missouri and the DOJ filed their respective mitigation proposals. Ameren's mitigation proposal consists of four essential elements, retirement of Rush Island, which eliminates all emissions through its previously planned 2039 retirement date, School Bus Electrification Program, including buses and charging stations, an air filter program geared towards underserved residential customers, and surrender of sulfur dioxide allowance. Collectively, these programs are estimated to cost approximately $20 million, which resulted in a first quarter charge to earnings. The Department of Justice mitigation proposal includes a significantly greater number of buses, charging stations, and advanced filters. The DOJ estimates their aggregate program costs to be approximately $120 million.
Speaker Change: On Wednesday, Ameren, Missouri, and the Doj filed their respective mitigation proposals.
Speaker Change: Ameren as mitigation proposal consists of four essential elements retirement of Rush Island, which eliminates all emissions through its previously planned 2039 retirement date.
<unk> bus electrification program, including buses and charging stations and air filter program geared towards underserved residential customers and surrender of sulfur dioxide allowances.
Speaker Change: <unk>. These programs are estimated to cost approximately $20 million, which resulted in a first quarter charge to earnings.
Speaker Change: The Department of Justice mitigation proposal includes a significantly greater number of buses charging stations and advanced filters, the Doj estimates they're aggregating.
That program cost to be approximately $120 million.
Martin J. Lyons: We expect an evidentiary hearing will be scheduled sometime this summer, and we expect the district court will issue a final ruling during the second half of 2024 that could be subject to further appeal. Before moving on, I'd like to provide an update on a series of new rules issued by the Environmental Protection Agency last week. As you know, at Emory University in Missouri, we remain committed to investing in a clean energy transition in a responsible manner, balancing reliability and affordability. The new rules expect generators to rely heavily on carbon capture and storage technologies, which are not ready for full-scale economic-wide deployment.
We expect an evidentiary hearing will be scheduled sometime this summer and we expect the district Court will issue a final ruling during the second half of 2024 that could be subject to further appeals.
Martin J. Lyons: These new rules apply not only to existing coal-fired units but new gas-fired units with greater than 40% capacity factors as well, which would include the gas combined cycle facility called for in our current IRP in the early 2030s to maintain system reliability. In addition, for coal units retiring between 2032 and 2039, the rules will require natural gas co-firing by 2030. And, as we noted in our comments to the proposed rules, co-firing with natural gas presents challenges from a permitting and construction standpoint.
Before moving on I'd like to provide an update on a series of new rules issued by the environmental Protection Agency last week.
Speaker Change: As you know at Ameren, Missouri, we remain committed to investing in the clean energy transition in a responsible manner balancing reliability and affordability.
Speaker Change: New rules expect generators to rely heavily on carbon capture and storage technologies, which are not ready for full scale economy wide deployment. These.
Speaker Change: These new rules apply not only to existing coal fired units the new gas fired units with greater than 40% capacity factors as well, which would include the gas combined cycle facility called for in our current ERP in the early 2000 <unk> to maintain system reliability.
Speaker Change: In addition for coal units retire in between 2032, and 2039 rules require natural gas co firing by 2030 and <unk>.
Speaker Change: As we noted in our comments to the proposed rules co firing with natural gas presents challenges from a permitting and construction standpoint.
Martin J. Lyons: These requirements would most directly impact our Labadee Energy Center, which has units scheduled to retire in 2036 and 2042. While we are still assessing the impact of the rules on our Integrated Resource Plan, these new rules are making it more challenging and costly to maintain existing dispatchable generation or build new dispatchable generation. These challenges come at a time when supply and demand are tight, and the industry is seeing significant potential load growth, particularly from data centers, the manufacturing industry, and through the electrification of transportation.
Speaker Change: These requirements would most directly impact our Liberty Energy Center, which has unit scheduled to retire in 2036 and 2042.
Speaker Change: While we are still assessing the impact of the rules on our integrated resource plan. These new rules are making it more challenging and costly to maintain existing dispatch will generation or build new dispatch of generation.
Speaker Change: These challenges come at a time when supply and demand is tight in the industry has seen significant potential load growth, particularly from datacenters, the manufacturing industry and through the electrification of transportation.
Martin J. Lyons: We will continue to closely review the final regulations and... As with many environmental regulations, litigation by various stakeholders is likely. These rules, if not modified, would require significant investments beyond what's in our current 10-year pipeline to meet compliance obligations and maintain a reliable system.
Speaker Change: We will continue to closely review of the final regulations and.
Speaker Change: As with many environmental regulations litigation by various stakeholders is likely.
Speaker Change: These rules if not modified would require significant investments beyond what's in our current 10 year pipeline to meet compliance obligations and maintain a reliable system.
Martin J. Lyons: Moving to page 10, we look ahead to our future renewable generation development. As I mentioned, in March, the Missouri PSC approved CCNs for three Amherst, Missouri, solar projects, totaling 400 megawatts. Split Rail, Vandalia, and Bowling Green, all located in Missouri.
Speaker Change: Moving to page 10, we look ahead to our future renewable generation developments.
As I mentioned in March the Missouri, PSC approved CCN for three Ameren, Missouri solar projects totaling 400 megawatts split rail Vandalia and bowling Green all located in Missouri.
Martin J. Lyons: The Missouri PSC, in its March order, also set terms upon which a fourth solar facility, the 150-megawatt Cass County, Illinois project, could be approved if it is fully subscribed under AMR Missouri's Renewable Solutions Program. The Renewable Solutions Program is a subscription-based program that allows eligible businesses and organizations to manage their carbon footprint by replacing up to 100% of their total energy use with renewable sources. The online auction for customers to subscribe to the Cass County Solar Project is expected to take place in mid-May, with Missouri PFC approval of the Cass County CCN expected following full subscription. Initial non-binding notices of intent for the subscription auction were received from interested businesses in early April and reflected strong interest.
Speaker Change: The Missouri PSC and its March order also set terms upon which a fourth solar facility. The 150 megawatt Cass County, Illinois project could be approved if it is fully subscribed under Ameren Missouri's renewable solutions program.
Speaker Change: The renewable solutions program is a subscription based program that allows eligible businesses and organizations to manage their carbon footprint by replacing up to 100% of their total energy use with renewable sources.
Speaker Change: The online auction for customers to subscribe to the cast County Solar project is expected to take place in mid May with Missouri, PSC approval of the cast County CCN expected following full subscription.
Speaker Change: Initial nonbinding notices of intent for the subscription auction were received from interested businesses in early April and reflected strong interest.
Martin J. Lyons: Investing in solar energy is part of AMRA Missouri's plans to affordably meet the long-term energy and reliability needs of our customers. The IRP also calls for new dispatchable energy resources, including an on-demand 800-megawatt gas simple cycle energy center by 2027, which could be turned on as needed in a matter of minutes to ensure the reliability of the energy grid during periods of peak energy demand. Later this month, we expect to file a request for a CCN for this simple cycle plant, Castle Bluff Energy Center, to be located on the site of our retired Meramec energy plant. Moving to page 11.
Speaker Change: Investing in solar energy as part of Ameren, Missouri's plans to affordably meet the long term energy and reliability needs of our customers.
Speaker Change: <unk> also calls for new dispatch will energy resources, including an on demand 800 megawatt gas simple cycle energy centers by 2027, which could be turned on as needed in a matter of minutes to ensure reliability of the energy grid during periods of peak energy demand.
Speaker Change: Later this month, we expect to file a request for a CCN for this simple cycle plant Cassa <unk> energy center to be located on the side of our retired Meramec Energy Center.
Speaker Change: Moving to page 11.
Martin J. Lyons: The Mid-Continent Independent System Operator, or MISO, continues to advance its long-range transmission planning and project approval processes. For Tranche One, we were pleased to be selected in April to develop the third and final competitive project in our service territory, which again emphasizes our track record of being able to deliver cost-effective, high-value projects to our communities. Ultimately, Ameren was assigned or awarded approximately 25% of the total Tranche 1 portfolio projects addressing the MISO Midwest region in 100% of the projects in our service territory. We expect Tranche 1 construction to substantially begin in 2026, with completion dates through 2030.
Speaker Change: The mid continent independent system, operator, or MISO continues to advance its long range transmission planning and project approval processes.
For tranche one we were pleased to be selected in April to develop a third and final competitive project in our service territory, which again emphasizes our track record of being able to deliver cost effective high value projects to our communities.
Ultimately ameren was assigned or awarded approximately 25% of total tranche one portfolio projects addressing the MISO Midwest region, and 100% of the projects in our service territory.
Speaker Change: We expect tranche one construction to substantially began in 2026 with completion dates to through 2030.
Martin J. Lyons: Looking ahead to Tranche 2, in March, MISO announced a long-range transmission Tranche 2 proposed project portfolio estimated to cost $17 billion to $23 billion, which included significant investments within our Ameren Missouri and Ameren Illinois service territories. Since then, we and other key stakeholders have been working with MISO to evaluate and comment on the portfolio of projects to assist MISO in ultimately approving the most appropriate path forward. Myso expects to vote on Tranche 2 in the third quarter of 2024. Moving to slide 12.
Speaker Change: Looking ahead to tranche, two and March MISO announced a long range transmission tranche true proposed project portfolio estimated to cost 17 billion to $23 billion.
Which included significant investments within our Ameren, Missouri, and Ameren, Illinois service territories.
Speaker Change: Since then we and other key stakeholders have been working with MISO to evaluate and comment on the portfolio of projects to assist MISO and ultimately approving the most appropriate path forward.
Speaker Change: MISO expects to vote on tranche, two and the third quarter of 2024.
Speaker Change: Moving to slide 12.
Martin J. Lyons: Looking ahead, we have a robust pipeline of investment opportunities of more than $55 billion that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter, and cleaner. And, of course, our investments also create thousands of jobs for our local economy. Turning to page 13, constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's growing energy needs and delivering on our customers' expectations.
Speaker Change: Looking ahead over the next decade, we have a robust pipeline of investment opportunities of more than $55 billion.
Speaker Change: That will deliver significant value to all of our stakeholders by making our energy grid stronger smarter and cleaner.
Of course, our investments also create thousands of jobs for our local economies.
Speaker Change: Turning constructive energy policies that support robust investment in energy infrastructure, and a transition to a cleaner future in a responsible fashion will be critical to meeting our countries growing energy needs and delivering on our customers' expectations.
Speaker Change: Turning to page 13.
Martin J. Lyons: In February, we updated our five-year growth plan, which included our expectation of a six to eight percent compound annual earnings growth rate from 2024 through 2028. The earnings growth is primarily driven by strong compound annual rate-based growth of 8.2%, supported by strategic allocation of infrastructure investment to each of our business segments based on their regulatory framework. Combined, we expect to deliver strong long-term earnings and dividend growth, resulting in an attractive total return.
Speaker Change: In February we updated our five year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2024 through 2028.
Speaker Change: The earnings growth is primarily driven by strong compound annual rate base growth of eight 2% supported by strategic allocation of infrastructure investment to each of our business segments based on their regulatory frameworks.
Speaker Change: Combined we expect to deliver strong long term earnings and dividend growth, resulting in an attractive total return.
Martin J. Lyons: I'm confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done. Again, thank you all for joining us today. I'll now turn the call over to Michael.
Speaker Change: I am confident in our ability to execute our investment plans and strategies across all four of our business segments. As we have an experienced and dedicated team to get it done.
Speaker Change: Again, thank you all for joining us today I'll now turn the call over to Michael.
Michael: Thanks, Marty and good morning, everyone. Turning now to page 15 of our presentation yesterday, we reported first quarter 2024 earnings of 98 per share compared to $1 per share for the year ago quarter.
Michael L. Moehn: Coming now to page 15 of our presentation. Yesterday, we reported first quarter 2024 earnings of $0.98, compared to $1 per share for the year ago. The key factors that drove the overall $0.02 per share decrease are highlighted by segment on this page.
Michael: The key factors that drove the overall <unk> per share decrease are highlighted by segment on this page.
Michael L. Moehn: We delivered solid earnings performance during the quarter as we continued to execute our strategy, including making infrastructure investments for the benefit of our customers. The first quarter included new service rates in Amarillo, Illinois; Natural Gas; and Amarillo, Missouri. In addition, strong customer growth and usage contributed to 3% higher electric weather-normalized retail sales at Amarillo, Missouri, across all customer clients, which were partially offset by milder weather impact. In fact, it was the third warmest first quarter in the past 50 years.
Michael: We delivered solid earnings performance during the quarter as we continue to execute our strategy, including making infrastructure investments to the benefit of our customers.
The first quarter included new service rates in Ameren, Illinois, natural gas and Ameren, Missouri and.
Michael: In addition, strong customer growth and usage contributed to 3% higher electric weather normalized retail sales at Ameren, Missouri across all customer classes, which were partially offset by milder weather impact in fact, the third warmest first quarter in the past 50 years.
Michael L. Moehn: Burnings were also reduced by an increase in L&M in Amarillo, Missouri, largely driven by a 4-cent charge for proposed additional mitigation relief related to Rush Island. Moving to page 16, as we think about the remainder of the year, we remain confident in our 2024 guidance range, and we continue to expect earnings to be in the range of $4.52 to $4.72 per share. As we think about the first quarter results versus our expectations, we lost $0.07 compared to normal for weather and $0.04 for the charge related to Russia, but we experienced two cents of favorable weather normalized sales beyond our expectations.
Michael: Earnings were also reduced by an increased known M&A Ameren, Missouri, largely driven by a <unk> <unk> charge for the proposed additional mitigation relief related to the Rush Island Energy Center.
Michael: Moving to page 16, as we think about the remainder of the year, we remain confident in our 2024 guidance range and we continue to expect earnings to be in the range of $4 52.
Michael: To $4 72 per share.
Michael: As we think about the first quarter results versus our expectations, we lost seven compared to normal weather and <unk> for the charge related to Rush Island.
Michael: But experienced <unk> of favorable weather normalized sales beyond our expectations.
Michael L. Moehn: As we look ahead, we expect to see meaningful year-over-year O&M reductions in the second half of the year, reflecting several cost savings initiatives instituted in 2024, which are expected to build throughout the year. This includes hiring restrictions, reducing our contractor and consultant spending, and deferring or eliminating discretionary.
As we look ahead, we expect to see meaningful year over year O&M reductions in the second half of the year, reflecting several cost savings initiatives instituted in 2024, which are expected to build throughout the year.
Michael: This includes hiring restrictions, reducing our contractor and consultant workforce and deferring or eliminating discretionary spend.
Michael L. Moehn: As we've discussed before, we have been actively managing costs for years and continue to create opportunities for further cost reductions through process redesign and digital technology investment, leading to increased productivity and better experiences for our customers. In addition, we expect to benefit from higher earnings and annual transmission over the balance of the year due to the timing of financing and project expenditures. I encourage you to take these supplementary earnings drivers into consideration as you develop your expectations for quarterly earnings results for the remainder of the year.
Michael: As we've discussed before we have been actively managing costs for years and continue to create opportunities for further cost reductions through process redesign and digital technology investments, leading to increased productivity and better experiences for our customers.
Michael: In addition, we expect to benefit from higher earnings in England transmission over the balance of the year due to timing of financing and project expenditures I encourage you to take these supplemental earnings drivers into consideration as you develop your expectation for quarterly earnings results for the remainder of the year.
Michael L. Moehn: Finally, late last week, MISO concluded its planning resource auction for the 2024 to 2025 planning year, which assesses seasonal resource adequacy in each zone. As a result of higher load requirements, changes to the accredited capacity of generation available, and reduced import capability, Zone 5, Aaron, Missouri's territory, showed a model capacity shortfall, and prices went to the cost of new entry, or cone. Lode, fall, and spring season. Clearing prices in all other zones within MISO remain relatively flat.
Michael: Finally late last week MISO concluded its planning resource auction for the 2024 to 2025 planning year, which assesses seasonal resource adequacy in each zone.
Michael: As a result of higher load requirements changes to the accredited capacity of generation available and reduced import capability zone, five ameren Missouri's territory shedding model capacity shortfall and prices went through the cost of new entry or cone for the non peak.
Michael: Load fall and spring seasons.
Michael: Clearing prices in all other zones within MISO remained relatively flat.
Michael L. Moehn: Unlike what Ameren, Illinois, experienced a couple of years ago, we do not expect to see material customer bill impacts at Ameren, Missouri, resulting from this auction because our generation resource is available to serve customers. Nor do we see any issues with providing reliable electric service throughout the year. My selection results do reinforce a couple of things. First, there's a strong need for us to continue to execute the generation plans called for in our... And second, the integration of new, large electric loads and carbon-free renewable generation into the grid will require significant transmission, with some projects needed locally to ensure reliability.
Michael: Unlike what Ameren, Illinois experienced a couple of years ago, we do not expect to see material customer bill impacts at Ameren, Missouri, resulting from this auction because our generation resources available to serve customers.
Michael: Nor do we see any issues with providing reliable electric service throughout the year for our customers.
The MISO auction results do reinforce a couple of things.
Michael: First there is a strong need for us to continue to execute the generation plans called for an RFP and second the integration of new large electric loads and carbon free renewable generation to the grid will require significant transmission expansion with some projects need locally to ensure reliable service, we stand ready to work with stakeholders in our region too.
Michael L. Moehn: We stand ready to work with stakeholders in our region to address this capacity. Before moving on, I'd like to provide an update on economic development. Through mid-April, we have successfully supported 21 new projects that have selected locations in our service areas, which are expected to increase electric demand by almost 45 megawatts and natural gas issues by 1.6 million tons within the next few years. These projects will add an estimated 950 jobs across. The majority of these projects are existing customer expansions in the manufacturing, aerospace, Data Center, Food Processing, and Mining Industry.
Michael: Address the capacity needs.
Michael: Before moving on I'd like to provide an update on economic development through mid April we have successfully supported 21, new projects that have selected locations in our service territories, which are expected to increase electric demand by almost 45 megawatts and natural gas usage by $1 6 million tons within the next few years.
These projects will add an estimated 950 jobs across our service territories.
The majority of these projects or existing customer expansion and manufacturing aerospace datacenter food processing and mining industries.
Michael L. Moehn: Air Missouri and Ameren Illinois are actively working with state, regional, and local partners on more than 150 economic development projects for companies considering a location in our service territory, including large data centers and manufacturers in the automotive, aerospace, and agricultural industries, among others. We will continue to work on development opportunities to build thriving communities in our service territory.
Michael: Ameren, Missouri, and Ameren, Illinois are actively working with state regional and local partners on more than 150 economic development projects that are considering a relocation of our service territories, including large low data centers and manufacturers in the automotive aerospace and agricultural industries among others.
Michael: We will continue to work on development opportunities to build thriving communities in our service territory.
Michael L. Moehn: Moving to page 17 on the Illinois Regulatory Reform page, we have several Anne Arundel Electoral Distribution Regulatory Updates to cover with you, including the 2023 Annual Reconciliation. 2024-2027 Multi-Year Rate Plan Rehearing, as well as Revised Grid and Rate Plan Files, starting with the 2023 Annal Reconciliation. Under Illinois Formula Rate Making, which expired at the end of 2023, Ameren Illinois is required to file annual rate updates to systematically adjust cash flows over time for changes in cost of service and to true up any prior period over or under recovery of such costs.
Michael: Moving to page 17 on Ameren, Illinois regulatory matters, we have several ameren, Illinois electric distribution regulatory updates to cover with you, including the 2023 and a reconciliation.
Michael: 2024 through 2027 multiyear rate plan, we're hearing as well as a revised grid and rate plan filings.
Michael: Starting with the 2023 and a reconciliation.
Under Illinois Formula Ratemaking, which expired at the end of 2023, Ameren, Illinois is required to file annual rate updates to systematically adjust cash flows overtime for changes in cost of service and a true up any prior period over or under recovery of such costs.
Michael L. Moehn: In April, we filed our Electric Distribution Annual Rate Reconciliation Request for a $160 million adjustment for the 2023 revenue requirement to reflect actual costs. The full amount would be collected from customers in 2025, replacing the prior period reconciliation adjustment of $110 million that is being collected during 2024, for a net customer impact of $50 million, or an approximately 1.5% increase in the total average residential customer bill. The ICC will review the matter in the months ahead, with a decision expected in December of this year and new rates effective in early November.
Michael: In April we filed our electric distribution annual rate reconciliation request for $160 million adjustment for the 2023 revenue requirement to reflect actual cost.
Michael: The full amount would be collected from customers in 2025, replacing the prior period reconciliation adjustment of $110 million that is being collected during 2024.
Michael: For a net customer impact of $50 million on approximately one 5% increase in the total average residential customer bill.
Michael: The ICC will review the matter of months ahead with a decision expected in December of this year and new rates effective in early next year.
Michael L. Moehn: Turning to the multi-year rate plan for 2024 through 2027 on page 18, in January, Ameren Illinois was granted a partial rehearing by the ICC to address a base level of grid reliability investment and 2023 rate base addition. We filed our revised request in April for a cumulative annual revenue increase from the 2023 rates of $305 million by 2027. Our request, which includes investments and costs related to preventive and corrective maintenance, inventory, metering, new business, and customer relocation, would allow us to appropriately maintain the energy grid to preserve safety, reliability, and day-to-day operations.
Michael: Turning to the multiyear rate plan for 2024 through 2027 on page 18.
Michael: In January Ameren, Illinois has granted a partial rehearing by the ICC to address a base level of grid reliability investment and 2023 rate base additions.
Michael: You filed.
Michael: <unk> request in April for a cumulative annual revenue increase in 2023 rates of $305 million by 2027.
Michael: Our request, which includes investments and costs related to preventive and corrective maintenance inventory metering, new business and customer relocations would allow us to appropriately maintain the energy grid to preserve safety reliability and day to day operations of our system.
Michael: The ICC staff recommended a cumulative increase of $283 million with the variance driven primarily by the renewal of other post employment benefits and certain 2023 projects in rate base, the latter of which the staffing to be outside the scope of this rehearing.
Michael L. Moehn: The ICC staff recommends a cumulative increase of $283 million, with a variance driven primarily by the removal of other post-employment benefits and certain 2023 projects from rate payers, the latter of which the staff deemed to be outside the scope of the program. We expect an ICC decision on the rehearing proceeding by June 20th, which will allow new 2024 interim rates to be effective by July. Moving to page 19, in March, Ameren only filed its revised electric multi-year grid plan and revised multi-year rate plan.
Michael: We expect an ICC decision on rehearing proceeding by June 20th which will allow new 2020 for interim rates to be effective by July.
Michael: Moving to page 19, and March Ameren, Illinois filed its revised electric multiyear grid plan and revised multiyear rate plan.
Michael L. Moehn: Our request for a $321 million cumulative annual revenue increase from 2023 rates would supersede revenues granted through re-hearing. The request is based on a return equity of 8.72% and an equity ratio of 50%. Annual revenues will be based on actual recoverable costs, year-end rate base, and a return on equity adjusted for any performance incentives or penalties, provided the actual revenue requirement does not exceed the reconciliation. Our plans, as proposed, support an affordable, equitable energy transition, which we'll advocate for over the remainder of the evening.
Michael: Our request for a $321 million cumulative annual revenue increase from 2023 rates would supersede revenues granted through rehearing.
Michael: Request is based on a return on equity of 872% and an equity ratio of 50%.
Michael: Annual revenues will be based on actual recoverable costs year end rate base and a return on equity adjusted for any performance incentives or penalties provided the actual revenue requirement does not exceed the reconciliation cab.
Michael: Our plan as proposed supported an affordable <unk> energy transition, which will advocate for over the remainder of the year.
Michael L. Moehn: We expect the ITC staff and intervener testimony in the next..., and we expect an ICC decision by December with rates effective January 1st, 2025. In other regulatory matters, last week, Air Missouri filed a 60-day notice with the Missouri PSC for our next electric service. Moving to page 20, we provide a financial... We continue to feel very good about our financials. On January 9th, Anaheim, Missouri issued $350 million of 5.25% first mortgage bonds for 2054. And on April 4th, Ann, Missouri issued $500 million of 5.2% first mortgage bonds due 2030. Net proceeds from both issuances were used to fund capital expenditures and refinance short-term debt.
Michael: We expect the ICC staff and intervenor testimony in May.
Michael: And we expect an ICC decision by December with rates effective January one 2025.
Michael: In other regulatory matters last week, and Missouri, followed a 60 day notice with the Missouri PSC for our next electric service rate with you.
Michael: Moving to page 20, we provide a financing update we continue to feel very good about our financial position on January 9th and Missouri issued $350 million of 525% first mortgage bonds due 2054.
Michael: And on April 4th and Missouri issued $500 million of five 2% first mortgage bonds due 2034.
Michael: Net proceeds from both issuances were used to fund capital expenditures <unk> refinance short term debt.
Michael L. Moehn: Further, in order for us to maintain our credit ratings and strong balance sheet while we refund our robust infrastructure plan, we expect to issue approximately $300 million of common equity in 2020, sold for approximately $230 million, under our At The Market or ATM program, consisting of approximately 2.9 million shares, which we expect to issue by the end of, Together with the issuance under our 401k and DRIP Plus programs, our ATM equity program is expected to score equity needs in 2024 and beyond. Finally, turning to page 21.
Michael: Further in order for us to maintain our credit ratings and strong balance sheet, while we funded refund our robust infrastructure plan, we expect to issue approximately $300 million of common equity in 2024.
Michael: We sold approximately $230 million under our at the market or ATM program, consisting of approximately $2 9 million shares, which we expect to issue by the end of this year.
Michael: Together with the issuance under our 400 K in drip plus programs. Our ATM equity program is expected to support our equity needs in 2024 and beyond.
Michael: Finally, turning to page 21.
Michael L. Moehn: We're off to a solid start in 2024 and well-positioned to continue executing our strategy. We expect to deliver strong earnings growth in 2024 as we continue to successfully execute our comprehensive business plan. Looking to the longer term, we continue to expect strong earnings per share growth driven by robust rate-based growth and disciplined cost management. We also believe this growth will compare favorably with the growth of our... Ameren shares continue to offer investors an attractive dividend. In total, we have an attractive total shareholder return.
Michael: We're off to a solid start in 2024 and well positioned to continue executing our plan, we expect to deliver strong earnings growth in 2024, as we continued to successfully execute our comprehensive business strategy.
Michael: Looking to the longer term, we continue to expect strong earnings per share growth driven by robust rate base growth and disciplined cost management.
Michael: We also believe this growth will compare favorably with the growth of our peers.
Michael: Ameren shares continue to offer investors an attractive dividend in total we have an attractive total shareholder return story.
Operator: That concludes our prepared remarks; we now invite your questions. Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the queue. You may press star 2 if you'd like to remove your question from the queue.
Speaker Change: Close our prepared remarks, we now invite your questions.
Speaker Change: Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad.
Speaker Change: 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.
Operator: For participants using speaker equipment, it may be necessary to pick up your handset.
Speaker Change: For 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.
Operator: It may be necessary to pick up your handset before pressing the start button. One moment, please, while we poll for questions. Our first question comes from Shahriar Pourreza with Guggenheim Partners. Please proceed with your question.
Speaker Change: Our first question comes from Shar <unk> with Guggenheim Partners. Please proceed with your question.
Shar: Hey, guys good morning.
Shahriar Pourreza: Sharr. Morning, Marty.
Speaker Change: Good morning, Shar good morning, Bonnie.
Martin J. Lyons: Marty, can you maybe elaborate a bit more on the recent EPA regs? I mean, you touched a bit on the fleet impact, like Labadee, but maybe expand on potential shifts to timing and scale of the spending opportunities versus last year's IRP, if it makes it through the courts. I mean, could we see some pull-forward of generation spend? What do you see as kind of an updated pathway here?
Shar: Can you just maybe elaborate a bit more on the recent EPA regs I mean, you touched a bit on the fleet impact like <unk>, but maybe expand on potential shifts the timing and scale of the spending opportunities versus last year's ERP. If it makes it to the courts.
Shar: Could we see some pull forward of generation spend what do you see as kind of an updated pathway here should we be thinking of an IRB update like you did with Russia, the Russian decision. Thanks.
Shahriar Pourreza: Well, Shahriar, you've outlined a number of considerations. I mean, first of all, we're all just, you know, just still absorbing the, you know, the rules.
Speaker Change: Well sure you've outlined number of the considerations I mean first of all we're all just still absorbing the their rules and so our teams are studying the new rules thoroughly and we will be over the coming weeks really trying to.
Martin J. Lyons: And so, our teams are, you know, studying the new rules thoroughly, and we'll be, you know, over the coming weeks really trying to assess what the potential impacts are on our IRP. And certainly, that could mean, as you note, a revision to the IRP. But, of course, too, we'll likely expect these rules to be litigated. And so, we'll have to take into account that litigation and the uncertainties that it creates. You know, in my prepared remarks, I noted a couple of the more notable concerns that we have.
Speaker Change: SaaS, what the potential impacts are on our IRB.
Speaker Change: And certainly that could mean as you note.
Speaker Change: <unk> to the ERP, but of course to we'll expect these rules to.
Speaker Change: Likely be.
Speaker Change: Litigated and we will have to take into account that litigation and the uncertainties that it creates.
Speaker Change: Repaired remarks.
Speaker Change: A couple of the more notable.
Speaker Change: No no concerns that we have the first being that the rules do really rely on carbon capture and sequestration, which.
Martin J. Lyons: The first being that the rules do really rely on carbon capture and sequestration, which, you know, I think we all recognize isn't really ready for prime Time today. And, you know, the things that that would impact, we have, as you know, in our IRP, a planned combined cycle facility, 1,200 megawatts planned for the 2032-2033 timeframe, which is really important from a reliability perspective as we expect to retire our Sioux power plant, our coal-fired power plant, in that 2032 timeframe.
Speaker Change: I think we all recognize isn't really ready for prime time today and.
Speaker Change: The things that that would impact we have as you know in our ERP planned combined cycle facility 200 megawatts.
Speaker Change: Plan for the 2030 to 2033 time frame.
Speaker Change: It is really important from a reliability perspective, as we expect to retire our soo power plants or coal fired power plant in that 2032 timeframe.
Martin J. Lyons: And certainly, you know, new combined cycle that would operate with greater than a 40% capacity factor, which we would expect this one to, would be impacted by that carbon capture and sequestration. So, you know, that certainly has significant implications as it relates to that planned combined cycle facility, and we'll have to reassess and think through that. The other one I mentioned is our Labadee Energy Center.
And certainly new combined cycle that would operate with greater than a 40% capacity factor, which we would expect this one to would be impacted by that carbon capture and sequestration. So.
Speaker Change: That certainly has significant implications as it relates to that planned combined cycle facility.
Speaker Change: And we will have to reassess and <unk> through that the other one I mentioned is our Labadie energy center that plant is scheduled to retire really in phases with about half of it in 2036 and the other half of it in 2042.
Martin J. Lyons: You know, that plant is scheduled to retire really in phases, with about half of it in 2036 and the other half of it in 2042. You know, so the rule would have implications for the ultimate retirement date, pulling that forward a little bit. But in order to, you know, be able to maintain the life of that facility out through 2039, the rules would require co-firing with natural gas in the 2030 timeframe.
Speaker Change: So the rule would have implications for the ultimate retirement date pulling that forward a little bit that in order to.
Speaker Change: Be able to maintain.
Speaker Change: We maintain the life of that facility out through 2039 <unk>.
The rules require co firing with natural gas in the 2030 timeframe and of course trying to get things permitted and constructed and that amount of time, certainly proposes challenges as well and so highlighted those in my prepared remarks today. So the end of the day Shar I think as we look at these rules, we do have concerns about the <unk>.
Martin J. Lyons: And, of course, you know, trying to get things permitted and constructed in that amount of time certainly poses challenges as well. And so I highlighted those in my prepared remarks today. So, you know, at the end of the day, Char, I think as we look at these rules, we do have concerns about the feasibility and, ultimately, the reliability of our system. Those are our primary concerns. But you're absolutely right. As we think about these rules, they certainly could cause revisions to the IRP and, on balance, suggest a greater level of investment that would be required to maintain the reliability of our system over the next 10 years.
Speaker Change: Feasibility and ultimately the reliability of our system those are our primary concerns.
Speaker Change: But you're absolutely right as we think about these rules it.
Certainly could cause revisions to the AARP.
Speaker Change: On balance suggest a greater level of investment that would be required to maintain reliability of our system over the next 10 years.
Shahriar Pourreza: Got it. And then, just a bit nuanced, but what exactly was going on with the PRA auction in Zone 5?
Speaker Change: Got it and then just.
Speaker Change: A bit nuanced, but what exactly was going on with the PRA auctioning zone five.
Michael L. Moehn: I mean, obviously, it's quite a large breakout for you. It's net neutral from a customer impact perspective, which you just highlighted, but maybe just some color on the backdrop. Is this kind of structural, should we expect it again, or really kind of an administrative or designer?
Speaker Change: It's a quite a large breakout for you it's net neutral from a customer impact perspective, which you just highlighted but maybe just some color on the backdrop is this kind of structural so we should expect it again or really kind of an administrative or design there. Thanks.
Michael L. Moehn: Hey, Shahriar, it's Michael Moehn. A couple of things. As you noted, obviously Zone 5, we've moved to this new seasonal construct. We did see quite a bit of variability. You know, you had $30 in the summer and 75 cents in the winter and then coned in the fall and the spring, you know, at $7.19.
Speaker Change: Hey, Shar it's.
Speaker Change: Michael Good morning, a couple of things.
Michael: As you noted I mean, obviously zone five we've moved to this new seasonal and construct we did see quite a bit of variability.
Michael: $30 in the summer and 75 cents in the winter than cone in the fall and the spring at 719 so.
Michael L. Moehn: You know, as you know, I mean, this is a capacity issue, it's not an energy issue. And so I think, you know, it's always important to just start with that. We expect to have, obviously, enough energy available for customers. We don't foresee any issues with respect to providing reliable service, which I think is important. And also from a customer impact standpoint, you know, we really don't see any material, if any, impact on customers as well. And it gets a little complicated. I mean, the MISO model is a revenue-neutral model.
Michael: As you noted I mean this is a capacity issue, it's not an energy issue and so I think it's always important to just start with that we expect to have obviously enough energy available for customers don't foresee any issues with respect to providing reliable service, which I think is important.
Michael: And also from a customer impact standpoint, we really don't see any material if any impact to customers as well and it gets a little complicated I mean, the MISO models are revenue neutral model and so it will be some shifting that goes on we have.
Michael L. Moehn: And so there'll be some shifting that goes on, you know, we have Missouri owns Generation and Zone 4, we're able to point to those as a hedge, So it helps offset all that. But I think when you step back, I mean, it is right to try to send a price signal with respect to needing, you know, additional dispatchable generation, Martin just spoke about. And I mean, there were a couple of things I noted in my, you know, my prepared remarks. I mean, it was due to an increase in load. There were some accreditation issues with respect to some generations. They got a ding for some past performance that should go away, you know, over the next couple of years.
Michael: Missouri owns generation in zone, four we're able to point to those as hedges and so it helps also but.
Michael: When you step back I mean, it is the right trying to send the price signal with respect to meeting additional dispatch able generation Martin you just spoke about.
Michael: I mean, there were a couple of things I noted in my prepared remarks, I mean, it was due to increased load there were some accreditation issues with respect to some generation that got dinged for some past performance that should go away over the next couple of years and then there was a.
Michael L. Moehn: And then there was a, you know, a reduction in import capabilities. But I think, you know, there's probably some transmission opportunities there that would relieve that. So, you know, I think, again, it does speak to what we're trying to do from a dispatchable perspective. And I think, you know, Shahriar, there's a way to work around this and see some relief over the next.
Michael: A reduction of import capabilities.
Michael: And also I think.
Michael: There is some probably some transmission opportunities there that would relieve that so.
Michael: I think again it does speak to what we're trying to do from a dispatch <unk> perspective.
Michael: Sure there is a way to work around this and see some relief over the next couple of years.
Shahriar Pourreza: Okay, perfect. I appreciate it, guys. Thank you so much.
Speaker Change: Okay perfect I appreciate it guys. Thank you so much.
Jeremy Bryan Tonet: Thanks for the question, Shahriar. Our next question is from Jeremy Tonet with JPMorgan Chase. Please proceed with your question. Hi, good morning. Hey Jeremy, how are you today?
Speaker Change: Thanks for the question sure.
Speaker Change: Our next question is from Jeremy Tonet with Jpmorgan Chase. Please proceed with your question.
Jeremy Bryan Tonet: Hi, good morning.
Jeremy Bryan Tonet: Hey, Jeremy how are you today.
Jeremy Bryan Tonet: Good how are you.
Jeremy Bryan Tonet: Good.
Jeremy Bryan Tonet: I just wanted to go to Missouri, and as far as legislative initiatives there, if you could provide us with, I guess, thoughts on the environment there, what you're looking for, and specifically PISA legislation. And, you know, I think the legislative session is ending soon, so any thoughts there would be helpful.
Jeremy Bryan Tonet: Just wanted to go to Missouri, and as far as legislative initiatives. There. If you could provide us I guess thoughts on.
Jeremy Bryan Tonet: The environment, there what you're looking for in specifically.
Jeremy Bryan Tonet: Pisa legislation and I think the session is ending soon and so any thoughts there would be helpful.
Martin J. Lyons: Yeah, Jeremy, you got it. I think that, as we sit here today, the piece of legislation that is, you know, most likely to get across the finish line is that one piece of legislation. And so, you know, and I'm sure you've been following House Bill 1746 and Senate Bills 740 and 1422, you know. I would say, at this point in the session, they're probably as well positioned as you could be for passage of Senate Bill 1422 and Senate Bill 740.
Speaker Change: Yes, Jeremy.
Jeremy Bryan Tonet: Got it I think that as.
Speaker Change: As we sit here today.
Jeremy Bryan Tonet: The legislation that is most likely to get across the finish line is that a piece of legislation and so.
Speaker Change: As you know and I'm sure you've been following.
Speaker Change: House, Bill $17, 46 incentive dose 740, and $14 22.
Speaker Change: I would say at this point in session. They they're probably as well positioned as you could be for passage Senate Bill 14, 22 incentive Bill 740 around the Senate informal calendar could be brought up at any time and house Bill $17 46.
Martin J. Lyons: They're on the Senate informal calendar that could be brought up at any time. And House Bill 1746, which passed out of the House with a very strong supportive vote of 119 to 17, is also now passed through the Senate Commerce Committee. It's listed as number one on House bills for third reading. So things are well positioned.
Speaker Change: Which passed out of the house with a very strong supportive vote of 119% to 17.
Speaker Change: It is also now passed through the Senate Commerce Committee, it's listed as number one on house bills for third reading, so things are well position the challenge that I highlighted in the prepared remarks. However, as the time is short the legislative session ends in two weeks on May 17th and the legislature does have some significant things to get done including the budget. So.
Martin J. Lyons: You know, the challenge that I highlighted in my prepared remarks, however, is that time is short. The legislative session ends in two weeks on May 17th. And the legislature does have some significant things to get done, including a budget. So, you know, that's really the concern is just whether time will run short. But in the meantime, we'll continue to work with key stakeholders towards passage if we have a window to get it done.
Speaker Change: That's really the.
Speaker Change: The concern is just weather time will run short, but in the meantime, we will continue to work with key stakeholders towards passage, if we have a window to get it done.
Jeremy Bryan Tonet: Got it, that's helpful. Thanks.
Speaker Change: Got it that's helpful. Thanks, and then maybe just pivoting towards Illinois.
Michael L. Moehn: And then maybe just pivoting towards Illinois, as far as the regulatory processes are concerned with the electoral hearing, the great plan refiling, any incremental thoughts you can share with progression versus expectations there? And really, I guess the question is more on the other side with the legislature. Do you see any opportunities there to maybe secure more constructive development?
Speaker Change: As far as the regulatory processes are concerned with.
Speaker Change: It could be hearing integrated planned refiling any incremental thoughts you can share with progression versus expectations, there and really I guess the question is more on the other side with the legislature do you see any.
Speaker Change: Potential there to maybe secure more constructive development.
Michael L. Moehn: Hey, Jeremy, it's Michael. Good morning. You know, maybe I'll handle the regulatory one if Marty wants to come on the legislative one. He can certainly do that. You know, I think things are continuing to move along there. And, you know, we mentioned this in our prepared remarks. I mean, from a rehearing process, you know, I feel good about where we stand today. Again, just really proud of the work the team has done. You know, Lenny and his team have been working really hard, you know, going through a number of public hearings, a number of workshops, etc. Just getting this prepared.
Speaker Change: Hey, Jeremy it's Michael Good morning, maybe I'll handle the regulatory Marty wants to come on the Legislative one you can certainly do that I think when things are continuing to move along there.
Michael: We mentioned this in our prepared remarks, I mean from a rehearing process.
Feel good about where we stand today again, just really proud of the work the team has done.
Michael: <unk> been working really hard and going through a number of public hearings and number of workshops et cetera, just getting in his prepared and I think youre seeing that producing results here as we kind of work through this rehearing process and so we should have a decision here in early sometime in June with rates effective in July and this will be an interim.
Michael L. Moehn: And I think, you know, you're seeing that producing results here as we kind of work through this rehearing process. And so we should have a decision here early sometime in June with rates effective in July; this will be an interim adjustment. And then obviously, you know, we'll have the more comprehensive multi-year rate plan, grid plan piece in the back half of the year. It's great to have a procedural schedule around that, you know, to have some finality around this in the December timeframe with rates in January.
Michael: And then obviously, we'll have the more comprehensive multiyear rate plan grid plan piece in the back half of the year straight out of a procedural schedule around that have some finality around this in the December timeframe with rates in January.
Michael L. Moehn: You know, with respect to the rehearing piece, the differences between us and staff are fairly, you know, minimal at this point. As we indicated, you know, we were at 305 and staff is at 283 today. It really comes down to two issues there.
With respect to the rehearing piece the differences between us and staff are fairly minimal at this point.
Michael: As we indicated we were at 305 and its fit staff and the 283 today and it really comes down to two issues. There at the OPEC issue that we've spoken about in the past we still are continuing to advocate for that and we think it's the right thing I think our range accommodate that if it goes in a different direction and then there were some projects that were.
Michael L. Moehn: The OPEB issue that we've spoken about in the past, you know; we still are continuing to advocate for that. We think it's the right thing. I think our range accommodates that, you know, if it goes in a different direction. And then there were some projects that were really deferred into the grid plan itself.
Michael: We're really deferred into the grid plan itself and so we will have another opportunity to advocate for those so.
Martin J. Lyons: And so we'll have another opportunity to, you know, advocate for those. So again, feel, you know, it feels as good as you can feel at this point in time. And the team is focused on it and, you know, getting some stability put back into that process. Yeah, really, Jeremy, I have nothing to add at this point. I mean, in terms of, you know, legislative initiatives, nothing to, you know, nothing to point to. Of course, this year, both in Missouri and Illinois, we have supported right of first refusal legislation in both states.
Michael: It feels as good as you can feel at this point in time and team is focused on it and getting some stability put back in that process.
Martin J. Lyons: In either state, do we see those as moving forward at this time but continue to advocate for the benefit of those for our customers and for the reliability of the grid broadly? But nothing, nothing to tack on right now.
Speaker Change: Yes, it really Jeremy that at this point I mean in terms of.
Speaker Change: Legislative initiatives nothing too.
Speaker Change: There's really nothing to point to you of course this year, both in Missouri and Illinois.
Speaker Change: Supported right of first refusal legislation in both states.
Speaker Change: In neither states do we see those as moving forward at this time.
Speaker Change: We continue to advocate for the benefit of those for our for our customers and for the reliability of the grid broadly.
Speaker Change: But nothing nothing to tack on right now.
Jeremy Bryan Tonet: Got it. That's helpful. I'll leave it there. Thanks.
Speaker Change: Got it that's helpful I'll leave it there thanks.
Carly S. Davenport: Our next question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
Speaker Change: Our next question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
Carly S. Davenport: Hey, good morning. Thanks so much for taking the questions today.
Carly Davenport: Hey, good morning, Thanks, so much for <unk> for taking the questions today.
Carly Davenport: Maybe just a follow up really quickly on the Illinois rehearing process.
Carly Davenport: First can you just remind us what of that 305 revenue increase request or there is embedded in the 'twenty four guidance and the kind of flexibility there today centers some gap.
Carly Davenport: And then is there any potential for that decision to come earlier than the the late June time frame that you've laid out.
Carly S. Davenport: Maybe just to follow up really quickly on the Illinois rehearing process. First, can you just remind us how much of that 305 revenue increase requested there is embedded in the 24 guidance and the kind of flexibility there to the extent there's some gap? And then, is there any potential for that decision to come earlier than the late June timeframe that you laid out?
Carly Davenport: Hey, good morning, Carla This is Michael.
Michael L. Moehn: Hey, good morning, Carlos, Michael, you know, the second part first, I think, you know, I think at this point, the expectation is that we kind of move along that time frame and should have a decision here in July, you know, in terms of, you know, sort of what's embedded that that 305 is obviously over that four-year period. And so there's a component, you can see that we have broken it out for 2024. Again, feel good about what we have embedded in there and just sort of where the positions are, you know, to the extent that something ended up changing for that.
Michael: The second part first I think no I think at this point at the expectation of this kind of move along that timeframe you should have a decision here in July.
Speaker Change: In terms of sort of what's embedded in that 305 is obviously over that four year period and so there's a component you can see that we have broken out for 2024.
Speaker Change: Again feel good about what we have embedded in there and just sort of where that positions are due to the extent that <unk>.
Speaker Change: Something ended up changing from that we'd have to just step back and look at it from a rate base perspective to the extent that its capital.
Carly S. Davenport: We'd have to just step back and look at it from a rate-based perspective, to the extent that it's capital. Again, I mean, you're earning 8.72%, so I mean, that obviously minimizes the impact, and we just have to see what our options are. I mean, we do have flexibility with some additional capital there, but really just looking to see the process move along and feel better about the framework first.
Carly S. Davenport: Got it. Thank you. That's super helpful.
Again, I mean, you are earning 817% so obviously minimizing the impact and we just have to see what our options are I mean, we do have flexibility with some additional capital there, but really just looking to see the process moving along and feel better about the framework first.
Carly S. Davenport: And then maybe just on Rush Island, you know, you talked a bit about the delta between Ameren's proposal and the DOJ proposal there. Is that just a matter of sizing the program that you expect to be the point of debate? Or is there anything else that sort of sticks out as a point of debate as you think about going into hearings there this summer?
Speaker Change: Got it. Thank you that's super helpful.
And then maybe just on on Rush Island, you talked a bit about the delta between Amarin proposal and the Doj proposal. There is that just a matter of sizing. The program that you expect to be the piece of debate or is there anything else that sort of sticks out as a point of debate as you think about going into here.
Speaker Change: Sir this summer.
Martin J. Lyons: Yeah, you're talking about, uh, which one were you asking about? Were you asking about, uh, the NSR case, Carla? Yeah, I think you were.
Yes.
Speaker Change: Thinking about which one were you asking about what are you asking about MSR case Carlos.
Carlos: Yes, I think you were listen as it relates to the MSR as we outlined in our slide prepared remarks, we've proposed to programs that have a value of about $20 million in the department of.
Martin J. Lyons: Listen, as it relates to the NSRA, as we outlined in our prepared remarks, you know, we've proposed programs that have a value of about $20 million, and the Department of Justice has outlined a series of programs that they've estimated at $120 million. And, you know, when you look at the components of the two programs, they're very similar in terms of electric school buses, air filtration programs, and charging infrastructure. So, very similar.
Carlos: Justice is.
Carlos: <unk> outlined a series of programs that they've estimated at $120 million.
Carlos: When you look at the components of the two programs that are very similar in terms of electric school buses air filtration programs charging infrastructure.
Carlos: So very similar so it really is.
Martin J. Lyons: It really is, uh, it is seemingly not a matter of the program mix but, you know, sort of the, um, extent of them and the cost of them. So, you know, we can't predict, uh, what mitigation the court would ultimately order. Uh, we would generally expect, though, that the positions I just talked about that the parties have and the proposed orders would sort of, sort of just bookends for the degree of mitigation relief that was either, you know, ultimately reached through a settlement between ourselves and the Department of Justice or a court order, but, you know, really can't speculate further at this point. Got it. Okay.
Carlos: <unk> not a matter of the program mix, but sort of the.
The extent of them on the cost of them. So we can't predict what mitigation in the court would ultimately order we would generally expect though that.
Carlos: The positions I, just talked about that the parties have and the proposed orders with sort of sort of the bookends for the degree of mitigation relief that was either.
Carlos: Ultimately reached through a settlement between ourselves and the department of Justice or a court order, but I really can't speculate further at this point.
Carly S. Davenport: Okay, thank you so much for the color.
Speaker Change: Got it okay. Thank you so much for the color.
Paul Patterson: Our next question is from Paul Patterson with Glenrock Associates. Please proceed with your question.
Speaker Change: Our next question is from Paul Patterson with Glen Rock Associates. Please proceed with your question.
Paul Patterson: Hey, good morning.
Paul Patterson: Hey, Paul.
Paul Patterson: So I just wanted to follow up on the EPA rule. It seems, um, so. I guess.
So I just wanted to follow up on the on the EPA.
Paul Patterson: It seems so.
Paul Patterson: The.
Paul Patterson: Challenging I guess.
Paul Patterson: I'm just wondering.
Paul Patterson: Assuming, you know, that it's largely in place or something, what when you mentioned different reliability, things you might have to do for reliability and stuff. Could you just sort of give us a general sense of what would happen? I mean, because as you mentioned, I think that, Yes, carbon capture and sequestration is, got so many challenges associated with it. Would you just start running the plants less? Would there be more batteries?
Paul Patterson: Assuming.
Speaker Change: Got it.
Speaker Change: Actually in place or something when you mentioned different reliability.
Speaker Change: Things you might have to do for reliability and so could you just sort of give us a general sense, what would happen I mean because.
Speaker Change: You mentioned I think that.
Speaker Change: Carbon capture and sequestration cut.
Speaker Change: Got somebody challenges associated with it.
Speaker Change: Could you just sort of willing to play its lower with would there be more batteries would it be.
Paul Patterson: What would be sort of the remedy that might be thought about, and also... Would there be any change in depreciation schedules? I'm just sort of wondering. I think that sounds like a very difficult thing to sort of talk about potentially changing the IRP with a plan. I think that seems so. It's so radical, kind of, if you know what I'm saying.
Speaker Change: What would be sort of the remedy that that might be.
Speaker Change:
Speaker Change: That might be thought about and also.
Speaker Change: Would there be any change in depreciation schedules or I'm, just sort of wondering I mean.
Speaker Change: It sounds like a very difficult thing to sort of talk about potentially changing the RFP with a plan.
Speaker Change: That seems so.
Speaker Change: So radical kind of if you know what I'm, saying.
Martin J. Lyons: Well, you know, Paul, it's Marty. I think you hit on a number of considerations, and I'll go back to what I've said before. In these early days, we've just gotten the rules. We, you know, we're going to go through a thorough assessment of the rules and reassessment of the IRP. And again, you've got the likelihood of litigation, which will have to be factored in as well. But, you know, I think when you look at the steps we're taking between now and 30, as we currently have outlined, I think the EPA rules underscore the importance of these.
Well Paul This is Marty I think you hit on a number of the considerations and I'll go back to what I've said before is early days, we just gotten the rules we were going to go through a thorough assessment of the rules and reassessment of the ERP and again, you've got the likelihood of litigation, which you'll have to be factored in as well to our considerations.
Speaker Change: But I think when you look at this.
Speaker Change: So we're taking between now and <unk> as we currently have outlined I think the EPA rules underscore the importance of these.
Martin J. Lyons: You know, we've got 2,800 megawatts of renewable energy planned by 2030. We've got 400 megawatts of battery storage planned between now and 2030. And now we've got 800 megawatts of simple cycle generation planned between now and 2030. And I think, given these rules, it certainly underscores the importance of all of those things.
Speaker Change: <unk> thousand 800 megawatts of renewables planned by 2030, we got 400 megawatts of battery storage planned between now and 2030.
Speaker Change: Got 800 megawatts of simple cycle generation plan between now and 2030 and I think given these rules certainly it underscores the importance of all of those things.
Martin J. Lyons: You know, I think the broader implications that are down the line, you know, I think with respect to the retirement of the Sioux Energy Center that we have planned for 2032, you know, generally in line with the rules, you know, the Labadee Energy Center, I mentioned earlier, half of it retired in 2036, half of it in 2042, you know, again, if that needed to be retired by 2039, maybe a little bit of a, you know, change in depreciation there, recovery, but I think the bigger thing for Labadee then would be getting, you know, gas into Labadee and the ability to be able to co-fire with natural gas so that we've got that. And then I think when you think about that combined cycle facility, and again, you know, First of all, the feasibility of doing carbon capture, much less the cost of doing carbon capture, you really have to reassess that plan in light of these rules.
Speaker Change: I think the broader implications that are down the line I think with respect to the retirement of the Sioux Energy Center that we have planned for 2032.
Speaker Change: Generally in line with the rules.
Speaker Change: <unk> Energy Center I mentioned earlier half of their retired in 2036 half of in 2042.
Again, if that need to be retired by 2000, 32039, maybe a little bit of a.
Speaker Change: The change in depreciation there recovery, but I think the bigger thing for Liberty then we'd be getting.
Speaker Change: Gas into <unk>, and the ability to be able to co fire with natural gas. So that we've got that and then I think when you think about that combined cycle facility in again.
Speaker Change: First of all the feasibility of doing carbon capture much less the cost of doing carbon capture you really have to reassess that that plan in light of these rules.
Martin J. Lyons: But you're right, what it might mean otherwise is more simple cycle gas fire generation, more battery storage technology, more renewables. Because, again, anything, if you're going to operate a combined cycle over 40% capacity factor, it calls for carbon capture. But those are, I think you've got your finger on the things that you have to consider, which is what would be an alternative mix of renewables and dispatchable resources that can maintain reliability for the system.
Speaker Change: But you are right what it might mean, otherwise is more simple cycle gas fire generation more battery storage technology more renewables.
Speaker Change: Yes.
Because again anything if youre going to operate a combined cycle over 40% capacity factor it calls for carbon capture.
Speaker Change: But those are I think you can get your.
Speaker Change: Sort of a finger on the things that you would have to consider which is what would be an alternative mix of renewables and dispatch of our resources that can maintain reliability for the system.
Paul Patterson: Okay, so we'll just, I guess, monitor this. Okay, that's very helpful.
Speaker Change: Okay.
Speaker Change: So it will just take us.
Speaker Change: For this.
Paul Patterson: And then, when we start talking about transmission, there's been a lot of focus on the part of the government and other officials in Washington and other places on grid-enhancing technologies. And I'm just wondering, um.., how you think about those and the potential deployment at Ameren, and just any thoughts you might have on it. And maybe we'll let Sean Shuker, who runs our transmission operations, comment on that. Yeah, thanks for the question. So the grid enhancing technology generally allows us to flow more across the
Okay, that's very helpful.
Speaker Change: With respect to transmission, there's been a lot of focus on the part of officials in Washington, and other places on.
Speaker Change: Grid enhancing technologies.
Speaker Change: Just wondering.
Speaker Change: How you thought about those and the potential deployment of Amarin and just any.
Speaker Change: Any thoughts you might have on that.
Shawn E. Schukar: And maybe we'll let Sean Shuker, who runs our transmission operations, comment on that. Yeah, thanks for that.
Speaker Change: Well anyway.
Speaker Change: Sean Sugar, who runs our transmission operations comment on that.
Sean Sugar: Thanks for the question so the grid enhancing technologies generally allow us to flow more <unk>.
Sean Sugar: Across the system, they don't take care of some of the capacity needs and we see those as complementary as we transition through.
Their grid investments, which means it will be making some enhancements like you see from the MISO, but we also look at those grid enhancing technologies to support the system and we will be utilizing a combination of both.
Shawn E. Schukar: Okay, thank you. It's good talking to you guys.
Speaker Change: Okay. Thank you good talking to you guys.
Speaker Change: Thanks, Paul.
Paul Patterson: As a reminder, if you'd like to ask a question, please press star 1 on your telephone. One moment while we poll for additional questions. Our next question comes from Nick Campanella with Barclays. Please proceed with your question.
Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad, one moment, while we poll for additional questions.
Our next question comes from Nick Campanella with Barclays. Please proceed with your question.
Nicholas Joseph Campanella: Hey, good morning. Happy Friday. Hello, Nick.
Nicholas Joseph Campanella: Hey, good morning Happy Friday.
Hello, Amy.
Nicholas Joseph Campanella: Same to you. Hey, hey, so I just wanted to ask quickly about the mitigation proposal on Rush Island because I know that, you know, you booked this $20 million figure, which was an ongoing hit in your O&M line, but then you kind of mentioned the risk of, you know, the DOJ is asking for 120. And obviously, we'll see where this goes at the end of the year. But, like, if it does go against you, is that still an ongoing item in your view? Or is that kind of more a one time thing?
Nicholas Joseph Campanella: Hey, Hey, so I just wanted to ask quickly on the mitigation proposal on Rush Island, because I know that.
Nicholas Joseph Campanella: Your books is $20 million figure, which is an ongoing.
Hit.
Nicholas Joseph Campanella: And your O&M line, but then you kind of mentioned the risk of the Doj is asking for 120, and obviously, we'll see where this goes at the end of the year, but like if it does go against you is that still an ongoing item in your view or is that kind of more onetime in nature.
Martin J. Lyons: Nick, it's a great question. And, you know, I think ultimately, wherever this settles, it really is a one-time item. It is non-recurring.
Nicholas Joseph Campanella: Nick It's a great question and I think ultimately wherever this settles. So it really is a onetime item it is nonrecurring.
Martin J. Lyons: You know, given the, you know, the size of it today, we didn't think it appropriate to sort of carve it out. And as we talked about on our call, we looked to overcome the cost of that with respect to ongoing operations savings. However, you know, again, as I outlined, the 20 million we've proposed and the 120 million that the DOJ proposed are probably bookends as we think about, you know, settlement and an ultimate potential court order here. But I agree with you that, ultimately, whatever this cost is, it's non-recurring and one-time only and won't be, you know, something that affects ongoing operations or earnings.
Nicholas Joseph Campanella: Given the.
Nicholas Joseph Campanella: The size of it today, we didn't think it appropriate to sort of carve it out and as we talked about on our call we'd look to overcome the cost of that with respect to.
Nicholas Joseph Campanella: Ongoing.
Nicholas Joseph Campanella: Operations savings however.
Nicholas Joseph Campanella: Again as I outlined the $20 million, we proposed in the $120 million of the Doj proposer, probably bookends as we.
Nicholas Joseph Campanella: Think about settlement and an ultimate potential court order here.
Nicholas Joseph Campanella: But I agree with you that ultimately whatever this cost is.
Nicholas Joseph Campanella: As nonrecurring in <unk>.
Nicholas Joseph Campanella: One time.
Nicholas Joseph Campanella: B.
Nicholas Joseph Campanella: Something that effects ongoing operations or earnings.
Nicholas Joseph Campanella: Hey, I really appreciate that. And as it just relates to 24, I know you're highlighting that you kind of have this line of sight to O&M in the back half of the plan. So just any comments on how you feel like you're trending versus your full 24 number at this point? Are you at the midpoint? Or, you know, any comments there?
Speaker Change: Hey, I really appreciate that and.
Speaker Change: As it relates to 'twenty four I know youre highlighting that you kind of have this line of sight to O&M in the back half of the plan. So just any comment on how you feel like you are trending versus your full 24 number at this point are you at the midpoint or.
Speaker Change: Any comment there.
Michael L. Moehn: Yeah, hey Nick, it's Michael here. Good Friday to you.
Speaker Change: Yeah, Hey, Nick it's Michael here.
Speaker Change: Friday.
Michael L. Moehn: Yeah, look, I mean, we obviously re-edited our range of 452 to 472, really focused on the midpoint of that range. The team is completely aligned on flexing what we need to flex here from an O&M perspective. You know, we talked about a number of programs. I think it did during the first part of the year that we put in place with respect to some hiring freezes, looking at discretionary spending, looking at contractors, travel, all those kinds of things.
Michael: Yes look I mean, we obviously re entered in a range of $4 52 to $4 70 to really focus on the midpoint of that range. The team is completely aligned on that.
Speaker Change: Flexing, what we need to flex here from an O&M perspective.
Michael: We talked about a number of programs and I think the first part of the year than we put in place with respect to some hiring freezes looking at discretionary spending looking at contractors travel all of those kinds of things and again those programs are fully ramped up at this point feeling good about it.
Michael L. Moehn: And again, those programs are fully ramped up at this point, and we're feeling good about it. You know, look, we have a long history of this. You know, you heard us talk about this. I mean, we've been doing a number of things really from an automation technology investment perspective. You know, we've now fully deployed AMI and feel we have distribution automation. We've done a great deal of stuff from the back office perspective in terms of the accounting systems, and the HR systems.
Michael: We have a long history of this you've heard US talk about this I mean, we've been doing a number of things really from an automation a technology investment perspective.
We've now fully deployed AMRI and feel we have distribution automation, we've done a great deal of stuff from the back office perspective in terms of the accounting systems HR systems and all of those are driving productivity improvements and we're taking full advantage of and I was sort of reflecting on this situation.
Michael L. Moehn: I mean, all of those are driving productivity improvements, and we're taking full advantage of them. I was sort of reflecting on this situation, you know, and thinking about 2020, that terrible COVID year. We lost 15% of sales within about a week, and the team came together and really looked for, you know, tens of millions of dollars worth of opportunities that we were able to flex and, you know, continue to end up hitting our guidance for that year.
Michael: Thinking about 2020 that terrible Covid, Jerry only lost 15% of sales within about a week and the team came together and really looked for.
Tens of millions of dollars worth of opportunities that we are a little flex and continuing to that end up hitting our guidance for that year and I don't see this as any different we'll continue to look for these opportunities.
Michael L. Moehn: I don't see this as any different, you know; we'll continue to look for these opportunities, and ultimately, we're going to make the decisions right for the long term at the end of the day, but we do have the ability to flex up and down.
Michael: Ultimately, we're going to make the decisions right for the long term at.
Michael: At the end of the day, but we do have the ability to flex up and down as needed.
Nicholas Joseph Campanella: That's really helpful and definitely acknowledges the ability to flex here, especially based on past performance. One more thing, you're very clear your 24 equity needs are basically done outside of internal programs and maybe some drip, but just for 25 and beyond, is 600 million a year still the kind of right number to be thinking about? I think that's what you guys talked about in the fourth quarter.
Speaker Change: That's really helpful and definitely.
Speaker Change: Now the ability to flex here, especially based on past.
Speaker Change: One more thing just youre very clear Youre 24 equity needs are basically done outside of internal programs and maybe some drift, but just for 25 and beyond is $600 million a year is still kind of right number to be thinking about and that's what you guys talked about in the fourth quarter.
Michael L. Moehn: Yeah, yeah, that's correct. That still stands, you know, what we delivered back there in February.
Speaker Change: Yes, that's correct. That's still stands we delivered back there in February.
Nicholas Joseph Campanella: All right, have a great day. Thanks. OK. Thanks.
Speaker Change: Alright, and have a great day. Thanks.
David Keith Arcaro: Okay, thanks. Good questions. Our final question is from David Paz with Wolf Research. Please proceed with your question.
Speaker Change: Okay. Thanks for the questions.
Speaker Change: Our final question is from David Paz with Wolfe Research. Please proceed with your question.
David Keith Arcaro: Good morning.
David Keith Arcaro: Could you maybe expand on the data center opportunities? I know you mentioned them; you mentioned data centers along with some other large customers. What opportunity are you seeing there, particularly on the investment side, maybe any sense of the size of the projects that potentially could come down the pike, and just how much would an incremental investment, B, you know, for a typical size project. Thank you.
David Keith Arcaro: Good morning, David.
David Keith Arcaro: Could you could you maybe expand on the theater center opportunities I know you mentioned.
David Keith Arcaro: You mentioned data centers, along with some other.
David Keith Arcaro: Large customers, but.
David Keith Arcaro: Just split opportunity are you seeing there and particularly on the investment side and maybe any sense of the size of the projects.
What potentially can come down and just how much would it incremental investment.
David Keith Arcaro: From Ameren be typical size project. Thank you.
Michael L. Moehn: Yeah, hey, good morning, David. You know, I'll start here. And certainly, Marty, I'll probably chime in as well. But I think, you know, we have a strong value proposition when it comes to serving both data centers and manufacturers. I mean, we've talked about this, we start from a really strong position, just in terms of where our rates are, both on the Midwest and national average, which is well below. We presented a number of sites in both states that can ramp up quickly, you know, sewer, water, transmission capabilities, etc.
Speaker Change: Yeah, Hey, good morning, David.
Speaker Change: I'll start here and certainly Marty probably chime in as well.
Speaker Change: But I mean, I think we have a strong value proposition right. When it comes to serving both data centers and manufacturing I mean, we've talked about this we start from a really strong position just in terms of where our rates are both on the Midwest and national average well below that we presented a number of sites.
Speaker Change: State that can ramp up quickly.
Speaker Change: Sewer water transmission capabilities et cetera.
Speaker Change: I've never seen state local regional leaders work together is as they are right now really trying to come together on a combined effort offer various incentives to again this is <unk>.
Michael L. Moehn: I've never seen state, local, and regional leaders work together as they are right now, you know, really trying to come together on a combined effort, offer various incentives to, again, this is beyond just data centers but manufacturers in general, in terms of, you know, things around state and local use taxes, development grants for workforce development, etc. We have a number of incentives in place here that are available to customers based on location and size. You know, as we sit here today, David, we've executed a construction agreement for one data center. It's got an estimated 250 megawatt load.
Speaker Change: Beyond just data centers, but manufacturing in general in terms of things around state and local use taxes development grants for workforce development et cetera.
Speaker Change: We have a number of incentives in place here that are available to customers based on location and size.
Speaker Change: As we sit here today, David we've executed the construction agreement for one data center and it's got an estimated 250 megawatt load at <unk>.
Michael L. Moehn: That's sizable for us. We haven't seen this kind of load growth in a really, really long time. We should be serving that customer by 2026, and I would say we're actively working on a thousand plus megawatts beyond that. And so, you know, these are all in different stages at this point. They'll come online differently.
Speaker Change: <unk> for US we haven't seen this kind of load growth in a really really long time, we should be serving that customer by 2026, and I would say we are actively working.
Speaker Change: Plus megawatts beyond that.
Speaker Change: So these are all in different stages at this point they'll come online differently.
Michael L. Moehn: But again, I think as we think about the IRP and just adding the renewables and the dispatchable generation that we've been adding the last few years, I mean, this is exactly what we need. And again, you know, all of these projects probably won't come to fruition, but some of them are really, really moving along nicely. And beyond data centers, you know, there's just a tremendous amount happening on the manufacturing side as well. I mean, Boeing, the largest manufacturer here in the state of Missouri, started a $1.8 billion expansion. Unilever in Jefferson City is also doing a very large expansion. In Illinois, Wheeland rolled products, a $500 million expansion.
Speaker Change: But again I think as we think about the ERP and just adding the renewables and the dispatch of coal generation that we've been adding in the last few years. I mean, this is exactly what we need and again all of these projects probably wont come to fruition, but some of them are really really moving along nicely and beyond data centers, there's just a tremendous amount happening in the.
Speaker Change: And factoring.
Speaker Change: Side as well.
Speaker Change: Boeing largest manufacturer here in the state of Missouri started at $1 $8 billion expansion Unilever in Jefferson City is also doing a very large expansion, Illinois.
Speaker Change: We learned rolled products of $500 million expansion I mean, there are a number of projects here that continue should continue to add to some significant growth in terms of what that means from a capital perspective, obviously, it's a net positive I think.
Michael L. Moehn: I mean, there are a number of projects here that should continue to add to some significant growth in terms of what that means from a capital perspective. Obviously, it's a net positive. You know, I think we're going to continue to step back and assess that, but it's certainly great to see from an investment standpoint and, certainly, from a customer affordability perspective. Right. This is going to make it obviously more affordable for all customers at the end of the day.
Speaker Change: We're going to continue to step back and assess that.
Speaker Change: But it certainly the Greek <unk> from an investment standpoint, and certainly a customer affordability perspective right. So this is going to make it obviously more affordable for all customers at the end of the day.
David Keith Arcaro: Thank you for that color. Maybe she'll sneak a quick one.
Speaker Change: Great. Thank you for that color and maybe just sneak a quick one I think it sounded like Youre tranche tranche two initial concept map.
David Keith Arcaro: I think you sounded like you're trying to tranche to initial concept now. I suggest that there will be some opportunities in your service areas. Any sense of how to compare that to what the initial concept map, the tranche one, looks like for you guys? Is it roughly the same? Potential dollar, either sides or dollars. Yeah, David, this is Marty.
Speaker Change: Suggests that there will be some opportunities in your service areas.
Speaker Change: Any sense of how to compare that to what the initial concept map tranche. One looks for you guys is that roughly.
Speaker Change: Same.
Speaker Change: In terms of potential.
Speaker Change: Petrodollar.
Speaker Change: Either size or dollars.
Martin J. Lyons: Yeah, David, this is Marty. You know, I'll tell you what, first of all, the map is encouraging, as, as we shared. I think, you know, if you look at our slide 11 that we provided, you'll see, you know, substantial proposed additional lines, both in our service territory and in central Illinois, as well as in the eastern half of Missouri. And so, you know, that, that, it's certainly exciting to see.
Speaker Change: Yeah, David This is Marty.
Martin J. Lyons: I'll tell you what first of all the map is encouraging as we showed I think if you look at our slide 11 that we provided.
Martin J. Lyons: Youll see.
Martin J. Lyons: Substantial proposed.
Martin J. Lyons: Additional lines, both in our service territory.
Martin J. Lyons: In central Illinois, as well as in the eastern half of Missouri and so.
Martin J. Lyons: We're excited that the overall, you know, project portfolio was about twice the size of Tronch One. You, everybody else I'm sure recalls Tronch One was about a $10 billion portfolio. We ended up, you know, having about 25% of that, as we talked about on the call. And, you know, we were happy to be awarded some directly. We're very proud to have won all three of the competitive projects that were in our service territory.
Martin J. Lyons: That's certainly exciting to see we're excited that the overall.
Martin J. Lyons: <unk>.
Martin J. Lyons: Project portfolio. It was about twice the size of.
Martin J. Lyons: Tranche, one Hugh everybody else I'm sure recalls tranche.
Martin J. Lyons: One was about $10 billion portfolio, we ended up having.
Martin J. Lyons: And about 25% of that as we talked about on the call and we were happy to be awarded some directly we're very proud to have won all three of the competitive projects that were in our service territory. So certainly feel good about the way tranche one turned out.
Martin J. Lyons: So, you certainly feel good about the way Tronch One turned out. But, it's too soon to really say what level of investment would be in our service territory from Tronch Two for really a couple of reasons. You know, one thing I would say is that, while we're excited about these projects that are in our service territory, as you well know, right now, the MISO is going through a process of getting input, uh, from stakeholders regarding these, these proposed projects, you know, and we do expect that, as MISO considers the, um, the input from various stakeholders, these project plans will be modified.
Martin J. Lyons: Too soon to.
Martin J. Lyons: Really say what level of investment would.
Martin J. Lyons: Would be in our service territory from tranche two for really a couple of reasons, one I would say that the while we're excited about these.
Martin J. Lyons: <unk> that were in our service territory as you all know.
Martin J. Lyons: Right now the MISO is going through a process of getting input.
Martin J. Lyons: From stakeholders.
Martin J. Lyons: Regarding this proposed projects and.
Martin J. Lyons: And we do expect that.
Martin J. Lyons: MISO considers the.
Martin J. Lyons: Input from various stakeholders that these project plans will be modified so it's premature there number one number two when nice to put out these tranche two they really didn't assign while they came up with an overall portfolio investment of 17% to $23 billion. It really didn't put any particular kwan.
Martin J. Lyons: So it's premature there. Number one, number two, when MISO put out these Tronch Two, they really didn't assign any value while they came up with an overall portfolio investment of 17 to $23 billion. It really didn't put any, uh, particular, quantification of investment value on any particular, um, substations or lines, et cetera.
Martin J. Lyons: Quantification of investment value on any particular.
Martin J. Lyons: Substations are lines et cetera, so really premature to even say how much. These investment opportunities would be that are shown on this map. So for a couple of reasons I think it's premature to say how much of this would be in our service territory and ultimately how much would be brownfield or greenfield. So.
Martin J. Lyons: So it's really premature to even say, you know, how much these, uh, investment opportunities would be that are shown on this map. So, you know, for a couple of reasons, I think it's premature to say, you know, how much of this would be in our service territory and, uh, ultimately, how much would be Brownfield or Greenfield. So, you know, but I think, you know, we'll start to see, um, iterations of this through time, and, you know, we're excited that, uh, MISO seems to be very much targeting and approving this Tronch Two portfolio by mid September. And so, and it should be, you know, pretty exciting open next few months as we see how this unfolds.
David Keith Arcaro: Great. Thank you. Thanks, David. We've reached the end of the question and answer session. I'd now like to turn the call back over to Marty Lyons for closing.
Martin J. Lyons: But I think we will start to see.
Martin J. Lyons: Iterations of this through time, and we're excited that MISO seems to be very much targeting an approval of this tranche two portfolio by mid September and so it should be pretty exciting over the next few months as we see how this unfolds.
Speaker Change: Great. Thank you.
Speaker Change: Thanks, David.
Speaker Change: We have reached the end of the question and answer session I would now like to turn the call back over to Marty Lyons for closing comments.
Martin J. Lyons: Lyons for closing comments.
Martin J. Lyons: Great. Well, hey, I want to thank everybody for joining us today. We invite you to attend our annual shareholder meeting, which is next week on May 9th. And then Michael and Andrew look forward to seeing many of you at the AGA Financial Forum in a couple of weeks. With that, thanks, and have a great day and a great weekend. This concludes today's conference. You may disconnect your lines at this time.
Martin J. Lyons: Great well, Hey, I want to thank everybody for joining us today, we invite you to attend our annual shareholder meeting, which is next week on may 9th.
Martin J. Lyons: Michael on Andrew we look forward to seeing many of you at the AGM financial Forum in a couple of weeks with that thanks and have a great day and a great weekend.
Speaker Change: This concludes today's conference you may disconnect your lines at this time and we thank you for your participation.