8-KOther Events

AMEREN CORP 8-K Report, Corporate Update (Mar 31, 2021)

Filed March 31, 2021For Securities:AEE

Summary

Ameren Corporation (AEE), through its subsidiary Ameren Missouri, has filed requests with the Missouri Public Service Commission (MoPSC) to increase annual revenues for electric and natural gas services. The proposed electric rate increase is approximately $299 million, driven by significant infrastructure investments under the Smart Energy Plan, the transition to cleaner energy generation (including accelerated retirements of certain power plants and new wind generation), and the recovery of costs associated with the Meramec Energy Center retirement. The natural gas rate increase request is for $9 million, supporting infrastructure investments and operational cost adjustments. These filings are part of Ameren Missouri's routine regulatory rate reviews. The company is seeking specific returns on equity and capital structures, with a test year ending December 31, 2020, and anticipated adjustments through September 2021. The MoPSC process is expected to take up to 11 months, with decisions anticipated by January 2022 and new rates potentially effective by March 1, 2022. Investors should note that the final approved rates are subject to MoPSC determination and may not fully match the requested amounts.

Key Highlights

  • 1Ameren Missouri filed requests to increase annual electric revenues by $299 million and natural gas revenues by $9 million with the MoPSC.
  • 2The electric rate increase is primarily driven by investments in infrastructure, cleaner energy transition (including plant retirements and wind generation), and recovery for Meramec Energy Center retirement.
  • 3The natural gas rate increase supports infrastructure investments and other operational cost adjustments.
  • 4Key financial parameters requested for electric service include a 9.90% return on common equity and a $10.0 billion rate base.
  • 5Key financial parameters requested for natural gas service include a 9.80% return on common equity and a $310 million rate base.
  • 6The regulatory process is expected to conclude with MoPSC decisions by January 2022, and new rates potentially effective by March 1, 2022.
  • 7Ameren cannot predict the final approved rate increases or if they will be sufficient to recover costs and earn a reasonable return.

Frequently Asked Questions

The primary reasons for the requested rate increases are to recover significant investments made in infrastructure, particularly under Ameren Missouri's Smart Energy Plan, and to support the transition to a cleaner generation portfolio, which includes retiring older power plants and investing in renewable energy sources like wind. Costs associated with the retirement of the Meramec Energy Center are also a significant factor for the electric rate increase.

The Missouri Public Service Commission (MoPSC) proceedings are expected to take up to 11 months. Decisions from the MoPSC are anticipated by January 2022, with new rates potentially becoming effective on March 1, 2022.

No, Ameren Missouri cannot predict the final level of rate changes that the MoPSC may approve. The approved rates could be lower than requested, and there is no guarantee that the approved changes will be sufficient for Ameren Missouri to recover its costs and earn a reasonable return on its investments.

The electric service rate request is based on a 9.90% return on common equity, a capital structure with 51.9% common equity, and an electric rate base of $10.0 billion. The test year ended December 31, 2020, with pro-forma adjustments expected through September 30, 2021.