ML22349A634
| ML22349A634 | |
| Person / Time | |
|---|---|
| Site: | Callaway  |
| Issue date: | 12/15/2022 |
| From: | Ameren Missouri, Union Electric Co |
| To: | Office of Nuclear Reactor Regulation, Office of Nuclear Security and Incident Response |
| Shared Package | |
| ML22349A623 | List: |
| References | |
| ULNRC-06788 | |
| Download: ML22349A634 (1) | |
Text
ULNRC-06788 Page 1 of 82 Ameren Missouri (Union Electric Company)
Callaway Plant 10-Q FILED 03/31/2022 81 pages follow this cover sheet
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended March 31 2022 OR Transition report pursuant to Section 1 3 or I 5(d) of the Securities Exchange Act of I 934 for the transition period from to g aV Ameren Ameren Ameren MISSOURI ILLINOIS Exact name of registrant as specified in its charter; Commission State of Incorporation; IRS Employer File Number Address and Telephone Number Identification No.
1-14756 Ameren Corporation 43-1723446 (Missouri Corporation) 1901 Chouteau Avenue St. Louis, Missouri 63103 (314) 621-3222 1-2967 Union Electric Company 43-0559760 (Missouri Corporation)
I 901 Chouteau Avenue St. Louis, Missouri 63103 (314) 621-3222 1-3672 Ameren Illinois Company 37-0211380 (Illinois Corporation) 10 Executive Drive Collinsville, Illinois 62234 (618) 343-8150 Securities Registered Pursuant to Section 1 2(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.01 par value per share AEE New York Stock Exchange
Indicate by check mark whetherthe registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) ofthe Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.
Ameren Corporation Yes No Union Electric Company Yes No Ameren Illinois Company Yes No Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-I ( 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Ameren Corporation Yes No U Union Electric Company Yes No U Ameren Illinois Company Yes No Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer a smaller reporting company or an emerging growth company. See definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 ofthe ExchangeAct.
Ameren Corporation Large accelerated filet Accelerated filet U Non-accelerated filer U Smaller reporting company U Emerging growth company U Union Electric Company Large accelerated filer U Accelerated filer U Non-accelerated filer Smaller reporting company U Emerging growth company U Ameren Illinois Company Large accelerated filer U Accelerated filer U Non-accelerated filer Smaller reporting company U Emerging growth company U If an emerging growth company, indicate by check mark ifthe registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 1 3(a) of the Exchange Act.
Ameren Corporation U Union Electric Company Ameren Illinois Company U Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 ofthe Exchange Act).
Ameren Corporation Yes U No Union Electric Company Yes No Ameren Illinois Company Yes U No The numberofshares outstanding ofeach registrants classes ofcommon stock as ofApril 29, 2022, was as follows:
Registrant Title of each class of common stock Shares outstanding Ameren Corporation Common stock, $0.01 par value per share 258,226,506 Union Electric Company Common stock, $5 par value per share, held by Ameren Corporation I 02,123,834 Ameren Illinois Company Common stock, no par value, held by Ameren Corporation 25,452,373 This combined Form I 0-Q is separately filed by Ameren Corporation, Union Electric Company, and Ameren Illinois Company. Each registrant hereto is filing on its own behalf all of the information contained in this quarterly report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
TABLE OF CONTENTS Page Glossary of Terms and Abbreviations, i forward-looking Statements jT I. Financial Information Item I Financial Statements (Unaudited) 4 Ameren Corporation Consolidated Statement of Income and Comprehensive Income 4 Consolidated Balance Sheet Consolidated Statement of Cash Flows 6 Consolidated Statement of Shareholders Euity Union Electric Company_(dIbIa Ameren Missouri)
Cojjsolidated Statement of Income Consolidated Balance Sheet 9 Consolidated Statement of Cash Flows IQ Consolidated Statement of Shareholders Equity ii Ameren Illinois Company (Ulbia Ameren Illinois) 12 Statement of Income 12 Balance Sheet Statement of Cash Flows Statement of Shareholders Equity Note 1 Summary of Significant Accounting Policies Note 2. Rate and Regulatory Matters 11 Note 3. Short-term Debt and Liquidity Note 4. Long-term Debt and Equity Financing Note 5. Other Income, Net 21 Note 6. Derivative Financial Instruments j.
Note 7. Fair Value Measurements Note 8. ReIated-iarty Transactions Note 9. Commitments and Contingencies Note 10. Callaway Energy Center Note 11. Retirement Benefits Note 12. IncomeTaxes 33 Note 13. Supplemental Information Nte 14. Segment Information Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk Item 4. ojjtroIs and Procedures PART II. Other Information Item I . Legal Proceeding Item IA. Risk Factors Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Item 6. Exhibits jgnatures
GLOSSARY OF TERMS AND ABBREVIATIONS We use the words our, we or us with respect to certain information that relates to Ameren, Ameren Missouri, and Ameren Illinois, collectively. When appropriate, subsidiaries ofAmeren Corporation are named specifically as their various business activities are discussed.
Refer to the Form I 0-K for a complete listing of glossary terms and abbreviations. Only new or significantly changed terms and abbreviations are included below.
Form 10-K The combined Annual Report on Form 10-K for the year ended December 31 2021, filed by the Ameren Companies with the SEC.
FORWARD-LOOKING STATEMENTS Statements in this report not based on historical facts are considered forward-looking and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of I 995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed within Risk Factors in the Form 10-K and in this report, and elsewhere in this report and in our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
regulatory, judicial, or legislative actions, and any changes in regulatory policies and ratemaking determinations, that may change regulatory recovery mechanisms, such as those that may result from the impact of a final ruling to be issued by the United States Court for the Eastern District of Missouri regarding its September 201 9 remedy order for the Rush Island Energy Center, the MoPSC staff review of the planned Rush Island Energy Center retirement, the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the refund period related to the FERCs May 2020 order determining the allowed base ROE under the MISO tariff, the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the FERCs rehearing denials in the transmission formula rate revision cases, and Ameren Illinois electric distribution service rate reconciliation request filed with the ICC in April 2022; the length and severity of the COVID-1 9 pandemic, and its impacts on our business continuity plans and our results of operations, financial position, and liquidity, including but not limited to changes in customer demand resulting in changes to sales volumes; customers payment for our services; the health, welfare, and availability of our workforce and contractors; supplier disruptions; delays in the completion of construction projects, which could impact our expected capital expenditures and rate base growth; changes in how we operate our business and increased data security risks as a result of remote working arrangements for a significant portion of our workforce; and our ability to access the capital markets on reasonable terms and when needed;
. the effect ofAmeren Illinois use ofthe performance-based formula ratemaking framework for its electric distribution service under the IEIMA, which will establish and allow for a reconciliation of electric distribution service rates through 2023, its participation in electric energy-efficiency programs, and the related impact ofthe direct relationship between Ameren Illinois ROE and the 30-year United States Treasury bond yields;
. the effect and duration ofAmeren Illinois election to either utilize traditional regulatory rate reviews or MYRPs for electric distribution service ratemaking effective for rates beginning in 2024;
. the effect on Ameren Missouris investment plan and earnings if an extension to use PISA is not sought by Ameren Missouri or approved by the M0PSC;
. the effect on Ameren Missouri of any customer rate caps pursuant to Ameren Missouris election to use the PISA, including an extension of use beyond 2023 if requested by Ameren Missouri and approved by the MoPSC under current Missouri law, or beyond 2028 if requested and approved by the MoPSC if Missouri Senate Bill 745 is enacted; the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, foreign trade, and energy policies; the effects of changes in federal, state, or local tax laws, regulations, interpretations, or rates, and challenges to the tax positions taken by the Ameren Companies, if any, as well as resulting effects on customer rates; the effects on energy prices and demand for our services resulting from technological advances, including advances in customer energy efficiency, electric vehicles, electrification of various industries, energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive; the effectiveness ofAmeren Missouris customer energy-efficiency programs and the related revenues and performance incentives earned under its MEEIA programs; Ameren Illinois ability to achieve the performance standards applicable to its electric distribution business and electric customer energy-efficiency goals and the resulting impact on its allowed ROE;
. our ability to control costs and make substantial investments in our businesses, including our ability to recover costs and investments, and to earn our allowed ROEs, within frameworks established by our regulators, while maintaining affordability of our services for our customers;
. the cost and availability of fuel, such as low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of purchased power, zero emission credits, renewable energy credits, emission allowances, and natural gas for distribution; and the level and volatility of future market prices for such commodities and credits;
. disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies from the one NRC-licensed supplier ofAmeren Missouris Callaway Energy Center assemblies; I
the cost and availability of transmission capacity for the energy generated by Ameren Missouris energy centers or required to satisfy Ameren Missouris energy sales; the effectiveness of our risk management strategies and our use of financial and derivative instruments;
. the ability to obtain sufficient insurance, or in the absence of insurance, the ability to timely recover uninsured losses from our customers;
. the impact of cyberattacks on us or our suppliers, which could, among other things, result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer, employee, financial, and operating system information;
. business and economic conditions, which have been affected by, and will be affected by the length and severity of, the COVID-19 pandemic, including the impact of such conditions on interest rates and inflation;
. disruptions ofthe capital markets, deterioration in credit metrics of the Ameren Companies, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity; a the actions of credit rating agencies and the effects of such actions, including any impacts on our credit ratings that may result from the economic conditions ofthe COVID-19 pandemic;
. the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments, including as they relate to the construction and acquisition of electric and natural gas utility infrastructure and the ability of counterparties to complete projects, which is dependent upon the availability of necessary materials and equipment, including those obligations that are affected by disruptions in the global supply chain caused by the COVID-19 pandemic;
. the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages and the level ofwind and solar resources; I
the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets;
. the effects of failures of electric generation, electric and natural gas transmission or distribution, or natural gas storage facilities systems and equipment, which could result in unanticipated liabilities or unplanned outages;
. the operation ofAmeren Missouris Callaway Energy Center, including planned and unplanned outages, as well as the ability to recover costs associated with such outages and the impact of such outages on off-system sales and purchased power, among other things;
. Ameren Missouris ability to recover the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs; the impact of current environmental laws and new, more stringent, or changing requirements, including those related to NSR and C02, other emissions and discharges, Illinois emission standards, cooling water intake structures, CCR, energy efficiency, and wildlife protection, that could limit or terminate the operation of certain ofAmeren Missouris energy centers, increase our operating costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers demand for electricity or natural gas, or otherwise have a negative financial effect; the impact of complying with renewable energy standards in Missouri and Illinois and with the zero emission standard in Illinois; 0
Ameren Missouris ability to construct and/or acquire wind, solar, and other renewable energy generation facilities, retire energy centers, and implement new or existing customer energy-efficiency programs, including any such construction, acquisition, retirement, or implementation in connection with its Smart Energy Plan, integrated resource plan, or emissions reduction goals, and to recover its cost of investment, related return, and, in the case of customer energy-efficiency programs, any lost margins in a timely manner, which is affected by the ability to obtain all necessary regulatory and project approvals, including certificates of convenience and necessity from the MoPSC or any other required approvals for the addition of renewable resources; the availability of federal production and investment tax credits related to renewable energy and Ameren Missouris ability to use such credits; the cost of wind, solar, and other renewable generation and storage technologies; and our ability to obtain timely interconnection agreements with the MISC or other RTOs at an acceptable cost for each facility; advancements in carbon-free generation and storage technologies, and the impact of constructive federal and state energy and economic policies with respect to those technologies; labor disputes, work force reductions, changes in future wage and employee benefits costs, including those resulting from changes in discount rates, mortality tables, returns on benefit plan assets, and other assumptions; the impact of negative opinions of us or our utility services that our customers, investors, legislators, regulators, or other stakeholders may have or develop, which could result from a variety offactors, including failures in system reliability, failure to implement our 2
investment plans or to protect sensitive customer information, increases in rates, negative media coverage, or concerns about ESG practices;
. the impact of adopting new accounting guidance;
. the effects of strategic initiatives, including mergers, acquisitions, and divestitures; legal and administrative proceedings;
. the impacts ofthe Russian invasion of Ukraine, related sanctions imposed by the U.S. and other governments, and any broadening of the conflict, including potential impacts on the cost and availability of fuel, natural gas, enriched uranium, or other commodities, materials, or services, the inability of our counterparties to perform their obligations, disruptions in the capital and credit markets, and other impacts on business, economic, and geopolitical conditions, including inflation; and
. acts of sabotage, war, terrorism, or other intentionally disruptive acts.
New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.
3
PART I. FINANCIAL IN FORMATION ITEM 1. FINANCIAL STATEMENTS.
AMEREN CORPORATION CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME (Unaudited) (In millions, except per share amounts)
Three Months Ended March 31, 2022 2021 Operating Revenues:
Electric $ 1,318 $ 1,156 Naturalgas 561 410 Total operating revenues 1,879 1,566 Operating Expenses:
Fuel 176 65 Purchased power 177 191 Natural gas purchased for resale 293 165 Other operations and maintenance 461 420 Depreciation and amortization 299 281 Taxesotherthanincometaxes 142 128 Total operating expenses 1,548 1,250 Operating Income 33j 316 Other Income, Net 60 46 InterestCharges 104 100 Income Before Income Taxes 287 262 IncomeTaxes 34 27 Net Income 253 235 Less: Net Income Attributable to Noncontrolling Interests I 2 Net Income Attributable to Ameren Common Shareholders $ 252 $ 233 Net Income $ 253 $ 235 Other Comprehensive Income, Net of Taxes Pension and other postretirement benefit plan activity, net of income taxes of $ and $, respectively I I Comprehensive Income 254 236 Less: Comprehensive Income Attributable to Noncontrolling Interests I 2 Comprehensive Income Attributable to Ameren Common Shareholders $ 253 $ 234 Earnings per Common Share Basic $ 0.98 $ 092 Earnings per Common Share Diluted $ 0.97 $ 0.91 Weighted-average Common Shares Outstanding Basic 257.9 254.4 Weighted-average Common Shares Outstanding Diluted 259.0 255.9 The accompanying notes are an integral part of these consolidated financial statements.
4
AMEREN CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited) (In millions, except per share amounts)
December 31, March 31, 2022 2021 ASSETS Current Assets:
Cash and cash equivalents $ 7 $ 8 Accounts receivable trade (less allowance for doubiful accounts of $28 and $29, respectively) 560 434 Unbilled revenue 283 301 Miscellaneous accounts receivable 87 85 Inventories 520 592 Mark-to-market derivative assets I 37 66 Current regulatory assets 244 319 Current collateral assets II0 66 Other current assets 83 97 Total current assets 2,031 1968 Property, Plant, and Equipment, Net 29,578 29,261 Investments and Other Assets:
Nuclear decommissioning trust fund I ,094 I ,1 59 Goodwill 411 411 Regulatory assets I ,377 I 289 Pension and other postretirement benefits 772 756 Other assets 934 891 Total investments and other assets 4,588 4,506 TOTALASSETS $ 36,197 $ 35,735 LIABILITIES AND EQUITY Current Liabilities:
Current maturities of long-term debt $ 505 $ 505 Short-term debt I ,101 545 Accounts and wages payable 690 1,095 Current regulatory liabilities 219 113 Other current liabilities 630 568 Total current liabilities 3,145 2,826 Long-term Debt, Net 12,563 12,562 Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and tax credits, net 3,550 3,499 Regulatory liabilities 5,841 5,848 Asset retirement obligations 769 757 Other deferred credits and liabilities :4 414 Total deferred credits and other liabilities 10,554 10,518 Commitments and Contingencies (Notes 2, 9, and 10)
Shareholders Equity:
Common stock, $.01 par value, 400.0 shares authorized shares outstanding of 258.2 and 257.7, respectively 3 3 Other paid-in capital, principally premium on common stock 6,507 6,502 Retained earnings 3,282 3,182 Accumulated othercomprehensive income 14 13 Total shareholders equity 9,806 9,700 Noncontrolling Interests I 29 129 Total equity 9,935 9,829 TOTAL LIABILITIES AND EQUITY $ 36197 $ 35 735 The accompanying notes are an integral part of these consolidated financial statements.
5
AMEREN CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Cash Flows From Operating Activities:
Net income $ 253 $ 235 Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 324 295 Amortization of nuclear fuel 22 Amortization of debt issuance costs and premium/discounts 4 5 Deferred income taxes and investment tax credits, net 31 26 Allowance for equity funds used during construction (8) (7)
Stock-based compensation costs 4 6 Other 11 8 Changes in assets and liabilities:
Receivables (117) (5)
Inventories 72 54 Accounts and wages payable (235) (252)
Taxes accwed 47 60 Regulatory assets and liabilities 75 (421)
Assets, other (54) (9)
Liabilities, other (26) (34)
Pension and other postretirement benefits (15) 4 Net cash provided by (used in) operating activities 388 (35)
Cash Flows From Investing Activities:
Capital expenditures (774) (887)
Nuclear fuel expenditures (16)
Purchases of securities nuclear decommissioning trust fund (97) (152)
Sales and maturities of securities nuclear decommissioning trust fund 92 ISO Other 15 I Net cash used in investing activities (780) (889)
Cash Flows From Financing Activities:
Dividends on common stock (152) (140)
Dividends paid to noncontrolling interest holders (1) (2)
Short-term debt, net 555 399 lssuances of long-term debt 450 Issuances of common stock 5 I 25 Redemptions ofAmeren Illinois preferred stock (I 3)
Employee payroll taxes related to stock-based compensation (16) (If)
Debt issuance costs Other (4)
Net cash provided by financing activities 391 795 Net change in cash, cash equivalents, and restricted cash (1) (129)
Cash, cash equivalents, and restricted cash at beginning of year I 55 301 Cash, cash equivalents, and restricted cash at end of period $ 154 $ 172 The accompanying notes are an integral part of these consolidated financial statements.
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AMEREN CORPORATION CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (Unaudited) (In millions, except per share amounts)
Three Months Ended March 31, 2022 2021 Common Stock $ 3 $ 3 Other Paid-in Capital:
Beginning of year 6,502 6,179 Settlement of forward sale agreement through common shares issuance 113 Shares issued under the DRPIus and 401(k) plan 13 12 Stock-based compensation activity (8) (9)
Other paid-in capital, end of period 6,507 6,295 Retained Earnings:
Beginning of year 3,182 2,757 Net income attributable to Ameren common shareholders 252 233 Dividends on common stock (152) (140)
Retained earnings, end of period 3,282 2,850 Accumulated Other Comprehensive Income:
Deferred retirement benefit costs, beginning of year 13 Change in deferred retirement benefit costs I Deferred retirement benefit costs, end of period 14 Total accumulated other comprehensive income, end of period 14 Total Shareholders Equity $ 9,806 $ 9,148 Noncontrolling Interests:
Beginning of year I 29 142 Net income attributable to noncontrolling interest holders I 2 Dividends paid to noncontrolling interest holders (I) (2)
Redemptions ofAmeren Illinois preferred stock (13)
Noncontrolling interests, end of period I 29 I 29 Total Equity $ 9,935 $ 9,277 Common stock shares outstanding at beginning of year 257.7 253.3 Shares issued under forward sale agreement I .6 Shares issued under the DRPlus and 401(k) plan 0.1 0.1 Shares issued for stock-based compensation 0.4 0.5 Common stock shares outstanding at end of period 258.2 255.5 Dividends per common share $ 0.59 $ 0.55 The accompanying notes are an integral part of these consolidated financial statements.
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UNION ELECTRIC COMPANY (dibla AMEREN MISSOURI)
CONSOLIDATED STATEMENT OF INCOME (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Operating Revenues:
Electric $ 738 $ 641 Natural gas 80 63 Totaloperatingrevenues 818 704 Operating Expenses:
Fuel 176 65 Purchased power 50 88 Natural gas purchased for resale 46 31 Other operations and maintenance 232 225 Depreciation and amortization 164 156 Taxes other than income taxes 85 77 Total operating expenses 753 642 Operating Income 65 62 Other Income, Net 23 23 lnterestCharges 39 39 Income Before Income Taxes 49 46 Income Taxes (Benefit) (2) (2)
Netincome 51 48 Preferred Stock Dividends I I Net Income Available to Common Shareholder $ 50 $ 47 The accompanying notes as they relate to Ameren Missouri are an integral part of these consolidated financial statements.
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UNION ELECTRIC COMPANY (dibla AMEREN MISSOURI)
CONSOLIDATED BALANCE SHEET (Unaudited) (In millions, except per share amounts)
December 31, March 31, 2022 2021 ASSETS Current Assets:
Cash and cash equivalents $ I $
Accounts receivable trade (less allowance for doubtful accounts of $11 and $1 3, respectively)
I 90 I 90 Accounts receivable affiliates 47 44 Unbilled revenue I 34 142 Miscellaneous accounts receivable 57 71 Inventories 414 419 Current regulatory assets I 41 I 27 Current collateral assets I JO 66 Other current assets 1,18086 76 Total current assets I ,1 35 Property, Plant, and Equipment, Net 15,434 15,296 Investments and Other Assets:
Nuclear decommissioning trust fund 1,094 1,159 Regulatory assets 582 523 Pension and other postretirement benefits 212 208 Other assets 418 401 Total investments and other assets 2,306 2,291 TOTAL ASSETS
$ 18,920 $ 18,722 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities:
Current maturities of long-term debt $ 55 $ 55 Short-term debt 528 I 65 Accounts and wages payable 342 631 Accounts payable affiliates 36 46 Taxes accrued 80 34 Mark-to-market derivative liabilities I 09 53 Current regulatory liabilities I 01 58 Other current liabilities I 59 IfS Total current liabilities 1,410 1,217 Long-term Debt, Net 5,564 5,564 Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and tax credits, net 1,866 1,852 Regulatory liabilities 3,278 3,354 Asset retirement obligations 765 753 Other deferred credits and liabilities 76 71 Total deferred credits and other liabilities 5,985 6,030 Commitments and Contingencies (Notes 2, 8, 9, and JO)
Shareholders Equity:
Common stock, $5 par value, 150.0 shares authorized 102.1 shares outstanding 511 11 Other paid-in capital, principally premium on common stock 2,725 2,725 Preferred stock 80 80 Retained earnings 2,645 2,595 Total shareholders equity 5,961 5,911 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $ 18,920 $ 18,722 The accompanying notes as they relate to Ameren Missouri are an integral part of these consolidated financial statements.
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UNION ELECTRIC COMPANY (dlbla AMEREN MISSOURI)
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Cash Flows From Operating Activities:
Net income $ 51 $ 48 Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization I 89 771 Amortization of nuclear fuel 22 Amortization of debt issuance costs and premium/discounts I Deferred income taxes and investment tax credits, net 4 4 Allowance for equity funds used during construction (4) (4)
Other Changes in assets and liabilities:
Receivables 7 20 Inventories 5 24 Accounts and wages payable (201) (201)
Taxes accrued 41 39 Regulatory assets and liabilities (3)
Assets, other (34) 13 Liabilities, other (18) (9)
Pension and other postretirement benefits (4) 4 Net cash provided by (used in) operating activities 56 (51)
Cash Flows From Investing Activities:
Capital expenditures (414) (534)
Nuclear fuel expenditures (16) (1)
Purchases of securities nuclear decommissioning trust fund (97) (152)
Sales and maturities of securities nuclear decommissioning trust fund 92 I 50 Money pool advances, net I 39 Other 18 Net cash used in investing activities (417) (398)
Cash Flows From Financing Activities:
Dividends on preferred stock (I)
Short-term debt, net 363 204 Capital contribution from parent 113 Net cash provided by financing activities 362 316 Net change in cash, cash equivalents, and restricted cash I (133)
Cash, cash equivalents, and restricted cash at beginning ofyear 8 I 45 Cash, cash equivalents, and restricted cash at end of period $ 9 $
The accompanying notes as they relate to Ameren Missouri are an integral part of these consolidated financial statements.
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UNION ELECTRIC COMPANY (dibla AMEREN MISSOURI)
CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Common Stock $ 511 $ 511 Other Paid-in Capital:
Beginning of year 2,725 2,518 Capital contributions from parent 113 Other paid-in capital, end of period 2,725 2,631 Preferred Stock 80 80 Retained Earnings:
Beginning of year 2,595 2,101 Net income 51 48 Dividends on preferred stock (1) (1)
Retained earnings, end of period 2,645 2,148 Total Shareholders Equity $ 5,961 $ 5,370 The accompanying notes as they relate to Ameren Missouri are an integral part of these consolidated financial statements.
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AMEREN ILLINOIS COMPANY (dlbla AMEREN ILLINOIS)
STATEMENT OF INCOME (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Operating Revenues:
Electric $ 543 $ 476 Natural gas 481 347 Total operating revenues 1,024 823 Operating Expenses:
Purchased power I 31 I 06 Natural gas purchased for resale 247 I 34 Other operations and maintenance 223 I 94 Depreciation and amortization 124 115 Taxes other than income taxes 53 46 778 Total operating expenses 595 Operating Income 246 228 Other Income, Net 24 14 Interest Charges 42 42 Income Before Income Taxes 22$ 200 Income Taxes 59 50 Net Income I 69 I 50 Preferred Stock Dividends Net Income Available to Common Shareholder $ 169 $ 149 The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
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AMEREN ILLINOIS COMPANY (dibla AMEREN ILLINOIS)
BALANCE SHEET (Unaudited) (In millions)
December 31, March 31, 2022 2021 ASSETS Current Assets:
Cash and cash equivalents $ $
Accounts receivable trade (less allowance for doubtful accounts of $1 7 and $16, respectively) 356 228 Accounts receivable affiliates 12 24 Unbilled revenue 149 159 Miscellaneous accounts receivable 12 1 Inventories 106 173 Mark-to-market derivative assets 79 28 Current regulatory assets 93 180 Other current assets 26 30 Total current assets 833 823 Property, Plant, and Equipment, Net 12,396 12,223 Investments and Other Assets:
Goodwill 411 411 Regulatory assets 780 752 Pension and other postretirement benefits 435 427 Other assets 436 399 Total investments and other assets 2,062 1,989 TOTAL ASSETS $ 15,291 $ 15,035 LIABILITIES AND SHAREHOLDERS EQUITY Current Liabilities:
Current maturities of long-term debt $ 400 $ 400 Short-termdebt 107 103 Accounts and wages payable 286 361 Accounts payable affiliates 80 64 Current regulatory liabilities 118 54 Other current liabilities 251 251 Total current liabilities I ,242 1,233 Long-term Debt, Net 3,993 3,992 Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net I ,593 I 558 Regulatory liabilities 2,442 2,374 Other deferred credits and liabilities 212 ?38 Total deferred credits and other liabilities 4,247 4,170 Commitments and Contingencies (Notes 2, 8, and 9)
Shareholders Equity:
Common stock, no par value, 45.0 shares authorized 25.5 shares outstanding Other paid-in capital 2,914 2,914 Preferred stock 49 49 Retained earnings 2,846 2,677 Total shareholders equity 5,809 5,640 TOTAL LIABILITIESAND SHAREHOLDERS EQUITY $ 15,291 $ 15,035 The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
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AMEREN ILLINOIS COMPANY (dibla AMEREN ILLINOIS)
STATEMENT OF CASH FLOWS (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Cash Flows From Operating Activities:
Netincome $ 169 $ 150 Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 124 115 Amortization of debt issuance costs and premium/discounts 3 3 Deferred income taxes and investment tax credits, net 27 53 Allowance for equity funds used during construction (4)
Other 2 Changes in assets and liabilities:
Receivables (1 26) (24)
Inventories 67 30 Accounts and wages payable (18) (40)
Taxes accrued 32 3 Regulatory assets and liabilities 79 (255)
Assets, other (18) (15)
Liabilities, other I3 (9)
Pension and other postretirement benefits (8) (1)
Net cash provided by operating activities 342 13 Cash Flows From Investing Activities:
Capital expenditures Net cash used in investing activities
{342L (342) (337)
Cash Flows From Financing Activities:
Dividends on preferred stock (1)
Short-term debt, net 4 323 Money pool borrowings, net Capital contributions from parent 40 Redemption of preferred stock Other -- - - - (4)
Net cash provided by financing activities 4 326 Net change in cash, cash equivalents, and restricted cash 4 2 Cash, cash equivalents and restricted cash at beginning of year 133 147 Cash, cash equivalents, and restricted cash at end of period $ 137 $ 149 The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
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AMEREN ILLINOIS COMPANY (dibla AMEREN ILLINOIS)
STATEMENT OF SHAREHOLDERS EQUITY (Unaudited) (In millions)
Three Months Ended March 31, 2022 2021 Common Stock $ $
Other Paid-in Capital:
Beginning of year 2,914 2,652 Capital contributions from parent 40 Other paid-in capital, end of period 2,914 2,692 Preferred Stock:
Beginning of year 49 62 Redemptions of preferred stock (i1 Preferred stock, end of period 49 49 Retained Earnings:
Beginning of year 2,677 2,252 Net income I 69 ISO Dividends on preferred stock (1)
Retained earnings, end of period 2,846 2,401 Total Shareholders Equity $ 5,809 $ 5,142 The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
IS
AMEREN CORPORATION (Consolidated)
UNION ELECTRIC COMPANY (dlbla Ameren Missouri)
AMEREN ILLINOIS COMPANY (dlbla Ameren Illinois)
COMBINED NOTES TO FINANCIAL STATEMENTS (Unaudited)
March 31 2022 NOTE I
SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES General Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Amerens subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Amerens common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Amerens principal subsidiaries are listed below. Ameren has other subsidiaries that conduct other activities, such as providing shared services.
. Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
. Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois.
R ATXI operates a FERC rate-regulated electric transmission business in the MISC.
The COVID-19 pandemic continues to affect our results ofoperations, financial position, and liquidity. While our electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs, were comparable to the same period in 2021 and total ,
sales volume levels were comparable to pre-pandemic levels, there has been a shift in sales volumes by customer class, which began in 2020, with an increase in residential sales, and a decrease in commercial and industrial sales. While the revenues from Ameren Illinois electric distribution business, residential and small nonresidential customers ofAmeren Illinois natural gas distribution business, and Ameren Illinois and ATXIs electric transmission businesses are decoupled from changes in sales volumes, earnings at Ameren Missouri and those associated with Ameren Illinois large nonresidential natural gas customers are exposed to such changes. The continued effect ofthe COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions.
Amerens and Ameren Missouris financial statements are prepared on a consolidated basis and therefore include the accounts of their majority-owned subsidiaries. All intercompany transactions have been eliminated. Ameren Missouris subsidiaries were created for the ownership of renewable generation projects. Ameren Illinois has no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.
Our accounting policies conform to GAAR Our financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in our opinion, for a fair presentation of our results. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of financial statements, and reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for an interim period may not give a true indication of results that may be expected for a full year. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the Form 10-K.
Variable Interest Entities As of March 31 2022, and December 31 2021 Ameren had unconsolidated variable interests as a limited partner in various equity method investments, primarily to advance clean and resilient energy technologies, totaling $60 million and $56 million, respectively, included in Other assets on Amerens consolidated balance sheet. Any earnings or losses related to these investments are included in Other Income, Net on Amerens consolidated statement of income and comprehensive income. Ameren is not the primary beneficiary of these investments because it does not have the power to direct matters that most significantly affect the activities of these variable interest entities. As of March 31 2022, the maximum exposure to loss related to these variable interests is limited to the investment in these partnerships of $60 million plus associated outstanding funding commitments of $28 million.
Company-owned Life Insurance Ameren and Ameren Illinois have company-owned life insurance, which is recorded at the net cash surrender value. The net cash 16
surrender value is the amount that can be realized under the insurance policies at the balance sheet date. As of March 31 2022, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $258 million (December 31 2021 $278 million) and $112 million (December 31 2021 $1 I 7 million), respectively, while total borrowings against the policies were $103 million (December 31 2021
$109 million) at both Ameren and Ameren Illinois. Ameren and Ameren Illinois have the right to offset the borrowings against the cash surrender value of the policies and, consequently, present the net asset in Other assets on their respective balance sheets. The net cash surrender value ofAmerens company-owned life insurance is affected by the investment performance of a separate account in which Ameren holds a beneficial interest.
NOTE 2 RATE AND REGULATORY MATTERS Below is a summary of updates to significant regulatory proceedings and related legal proceedings. See Note 2 Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for additional information and a summary of our regulatory frameworks. We are unable to predict the ultimate outcome of these matters, the timing of final decisions of the various agencies and courts, or the impact on our results of operations, financial position, or liquidity.
Missouri December 2021 MoPSC Electric and Natural Gas Rate Orders In December 2021 the MoPSC issued orders in Ameren Missouris 2021 electric service and natural gas delivery service regulatory rate reviews. The new electric and natural gas rates approved by these orders went into effect on February 28, 2022.
MoPSC Staff Review of Planned Rush Island Energy Center Retirement In February 2022, the MoPSC issued an order directing the MoPSC staff to review Ameren Missouris planned accelerated retirement of the Rush Island Energy Center as a result of the NSR and Clean Air Act Litigation discussed in Note 9 Commitments and Contingencies. The MoPSC staffs review will include potential impacts on the reliability and cost ofAmeren Missouris service to its customers, Ameren Missouris plans to mitigate the customer impacts of the accelerated retirement, and the prudence of Ameren Missouris actions and decisions with regard to the Rush Island Energy Center, among other things. In April 2022, the MoPSC staff filed an initial report with the MoPSC in which the staff concluded early retirement of the Rush Island Energy Center may cause reliability concerns. The MoPSC staff is under no deadline to complete this review. Ameren Missouri is unable to predict the results of this matter; however, results of the review could be used in other MoPSC proceedings, which could have a material adverse effect on the results of operations, financial position, and liquidity ofAmeren and Ameren Missouri.
Illinois MYRP ROE Performance Metncs Under an MYRP, the ROE approved by the ICC would be subject to annual adjustments during the four-year period based on certain performance metrics, with aggregate symmetrical performance-based ROE incentives and penalties ranging from 20 to 60 basis points annually.
In January 2022, Ameren Illinois filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties. The ICC is required to issue an order on this matter by September 30, 2022.
Electric Distribution Seivice Rates Under IEIMA In April 2022, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC to be used for 2023 rates, requesting an increase of $83 million. This update reflects an increase to the annual performance-based formula rate based on 2021 actual recoverable costs and expected net plant additions for 2022, an increase to include the 2021 revenue requirement reconciliation adjustment including a capital structure composed of 54% common equity, and a decrease for the conclusion of the 2020 revenue requirement reconciliation adjustment, which will be fully collected from customers in 2022, consistent with the ICCs December 2021 annual update filing order. An ICC decision in this proceeding is required by December 2022, with new rates effective in January 2023.
Electric Customer Energy-Efficiency Investments In April 2022, Ameren Illinois filed a revised energy-efficiency plan with the ICC to invest approximately $120 million per year in electric energy-efficiency programs through 2025, which reflects the increased level of annual investments allowed under the IETL. The ICC has the ability to reduce the amount of electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not recovered through the electric distribution service performance-based formula ratemaking framework. The ICC is under no deadline to issue an order in this proceeding.
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QIP Reconciliation Hearing In March 2020, Ameren Illinois filed a request with the ICC for a reconciliation hearing to determine the accuracy and prudence of natural gas capital investments recovered under the QIP rider during 2019. In August 2021 the Illinois Attorney Generals office challenged the recovery of capital investments that were made during 2019, alleging that the ICC should disallow approximately $70 million in natural gas capital investments as improper and imprudent, providing a potential over-recovery of approximately $3 million in 2019. In August and December 2021, the ICC staff filed testimony that supports the prudence and reasonableness of the capital investments made during 2019. Ameren Illinois 2019 QIP rate recovery request under review by the ICC is within the rate increase limitations allowed by law. The ICC is under no deadline to issue an order in this proceeding.
Federal Transmission Fonnula Rate Revisions In February 2020, the MISO, on behalf ofAmeren Missouri, Ameren Illinois, and ATXI, filed requests with the FERC to revise each compans transmission formula rate calculations with respect to the calculation used for materials and supplies inventories included in rate base. In May 2020, the FERC issued orders approving the revisions prospectively. In addition, the FERC declined to order refunds for earlier periods, as requested by intervenors in Ameren Illinois filing, but directed its audit staff to review historical rate recovery in connection with an ongoing FERC audit. Separately, in March 2021 the FERC issued an order related to an intervenor challenge to Ameren Illinois 2020 transmission formula rate update. As a result of this order, in March 2021 Ameren Illinois recorded a regulatory liability of $9 million, largely as a reduction of electric operating revenues, to reflect expected refunds, including interest, primarily related to the historical rate recovery of materials and supplies inventories included in rate base. The refund amount was reflected in rates as of January 2022 and will be refunded to customers by the end of 2022. Ameren Missouri, Ameren Illinois, and ATXI filed appeals of the FERCs May 2020 and March 2021 orders, and related FERC orders denng requests for rehearing, to the United States Court ofAppeals for the District of Columbia Circuit. In January 2022, the appeals were consolidated by the court. The court is under no deadline to address the appeal. Regardless of the outcome of the appeal, the impact of the May 2020 and March 2021 orders is not expected to be material to Amerens, Ameren Missouris, or Ameren Illinois results of operations, financial position, or liquidity.
FERC Complaint Cases Since November 2013, the allowed base ROE for FERC-regulated transmission rate base under the MISO tariff has been subject to customer complaint cases and has been changed by various FERC orders. In May 2020, the FERC issued an order, which set the allowed base ROE to 10.02%, and required refunds, with interest, forthe periods November 2013 to February 2015 and from late September 2016 forward. In June 2020, various parties filed requests for rehearing with the FERC, challenging the new ROE methodology established by the May 2020 order. In July 2020, the FERC denied the rehearing requests without addressing the issues raised, and indicated it will address the requests for reheating in a future order. Also in July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the May 2020 order to the United States Court ofAppeals for the District of Columbia Circuit challenging the refunds required for the period from September 2016 to May 2020.
The court is under no deadline to address the appeal.
As of March 31 2022, Ameren and Ameren Illinois had paid the refunds, including interest, associated with the allowed base ROE set by the May 2020 order.
NOTE 3 - SHORT-TERM DEBT AND LIQUIDITY The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and, in the case ofAmeren Missouri and Ameren Illinois, short-term affiliate borrowings. See Note 4 Short-term Debt and Liquidity under Part II, Item 8, in the Form 10-K for a description of our indebtedness provisions and other covenants as well as a description of money pool arrangements.
Short-term Borrowings The Missouri CreditAgreement and the Illinois CreditAgreement are available to support issuances underAmeren (parent)s, Ameren Missouris, and Ameren Illinois commercial paper programs, respectively, subject to borrowing sublimits, and the issuance of letters of credit. As of March 31 2022, based on commercial paper outstanding and letters of credit issued under the Credit Agreements, along with cash and cash equivalents, the net liquidity available to Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, was $1 .2 billion. The Ameren Companies were in compliance with the covenants in their Credit Agreements as of March 31 2022. As of March 31 2022, the ratios of consolidated indebtedness to consolidated total capitalization, calculated in accordance with the provisions of the Credit Agreements, were 59%,
50%, and 44% forAmeren, Ameren Missouri, and Ameren Illinois, respectively.
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The following table presents commercial paper outstanding, net of issuance discounts, as of March 31 2022, and December 31 2021.
There were no borrowings outstanding under the Credit Agreements as of March 31 2022, or December 31 2021.
March 31, 2022 December 31, 2021 Ameren (parent) $ 466 $ 277 Ameren Missouri 528 165 Ameren Illinois 107 103 Ameren consolidated $ 1,101 s 545 The following table summarizes the activity and relevant interest rates for Ameren (parent)s, Ameren Missouris, and Ameren Illinois commercial paper issuances and borrowings under the Credit Agreements in the aggregate for the three months ended March 31 2022 and ,
2021:
Ameren Ameren Ameren Ameren (parent) Missouri Illinois Consolidated 2022 Average daily amount outstanding $ 282 $ 408 $ 99 $ 789 Weighted-average interest rate 0.41 % 0.44 % 0.33 % 0.41 %
Peak amount outstanding during period(a) $ 466 $ 539 $ 142 $ 1,101 Peakinterestrate 1.05% 1.06% 1.15% 1.15%
2021 Average daily amount outstanding $ 454 $ 99 $ 96 $ 649 Weighted-average interest rate 0.25 % 0.22 % 0.21 % 0.24 %
Peak amount outstanding during period(a) $ 650 $ 206 $ 353 $ 916 Peak interest rate 0.33 % 0.25 % 0.25 % 0.33 %
(a) The timing of peak outstanding commercial paper issuances and borrowings under the Credit Agreements varies by company. Therefore, the sum of individual company peak amounts may not equal theAmeren consolidated peak for the period.
Money Pools Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. The average interest rate for borrowings under the utility money pool for the three months ended March 31 2022, was ,
0.39% (2021 0.22% ). See Note 8 Related-party Transactions for the amount of interest income and expense from the utility money pool arrangements recorded by Ameren Missouri and Ameren Illinois for the three months ended March 31 2022 and 2021. ,
NOTE 4 LONG-TERM DEBT AND EQUITY FINANCINGS Ameren For the three months ended March 31 2022, Ameren issued a total of 0.1 million shares of common stock under its DRPIus and 401(k) plan, and received proceeds of $5 million and had a receivable of $8 million. In addition, in the first quarter of 2022, Ameren issued 0.4 million shares of common stock valued at $31 million upon the settlement of stock-based compensation awards.
In May 2021 Ameren entered into an equity distribution sales agreement pursuant to which Ameren may offer and sell from time to time up to
$750 million of its common stock through an ATM program, which includes the ability to enter into forward sales agreements. There were no shares issued under the ATM program for the three months ended March 31 2022. As of March 31 2022, Ameren had approximately
$320 million of common stock available to issue under the ATM program, which takes into account the forward sale agreements in effect as of March 31 2022, discussed below.
Ameren has entered into multiple forward sale agreements, including the April 2022 forward sale agreement discussed below, under the ATM program with various counterparties relating to 3.4 million shares of common stock. Ameren expects to settle the forward sale agreements by December 31 2022. ,
Related to the forward sale agreements outstanding as of March 31 2022, these agreements can be settled at Amerens discretion on or prior to dates ranging from May 3, 2023 to September 30, 2023. On a settlement date or dates, ifAmeren elects to physically settle the forward sale agreement, Ameren will issue shares of common stock to the counterparties at the then-applicable forward sale price. The initial forward sale price for the agreements ranged from $86.35 to $88.81 with a weighted average initial sale price of $87.61 . Each initial forward sale price is subject to adjustment based on a floating interest rate factor equal to the overnight bank funding rate less a spread of 75 basis points, and will be subject to decrease on certain dates specified in the forward sale agreements by specified amounts related to expected dividends on shares of the common stock during the term of the forward sale agreements. If the overnight bank funding rate is less than the spread on any day, the interest rate factor will result in a reduction of the forward sale price. The forward sale agreements will be physically 19
settled unless Ameren elects to settle in cash or to net share settle. At March 31 2022, Ameren could have settled the forward sale agreements with physical delivery of 3.2 million shares of common stock to the respective counterparties in exchange for cash of $276 million. The forward sale agreements could have also been settled at March 31 2022, with delivery of approximately $21 million of cash or approximately 0.2 million shares of common stock to the counterparties. In connection to the forward sale agreements, the various counterparties, or their affiliates, borrowed from third parties and sold 3.2 million shares of common stock. The gross sales price of these shares totaled $280 million. In connection with such sales, the counterparties were deemed to have received commissions of $3 million. Ameren has not received any proceeds from such sales of borrowed shares. The forward sale agreements have been classified as equity transactions.
In April 2022, Ameren entered into a forward sale agreement under the ATM program relating to 0.2 million shares of common stock. The April 2022 forward sale can be settled atAmerens discretion on or prior to September 30, 2023. The forward sale price was initially $91 .41 for the April 2022 forward sale agreement.
Ameren Missouri In April 2022, Ameren Missouri issued $525 million of 3.90% first mortgage bonds due April 2052, with interest payable semiannually on April I and October 1 of each year, beginning October 1 2022. Ameren Missouri received net proceeds of $51 9 million, which were used to repay short-term debt and for near-term capital expenditures. Ameren Missouri intends to allocate an amount equal to the net proceeds to sustainability projects meeting certain eligibility criteria.
ATXI In November 2021 pursuant to a note purchase agreement, AIXI agreed to issue $95 million of its 2.96% senior unsecured notes due 2052, with interest payable semiannually on February 25 and August 25 of each year, beginning February 25, 2023, through a private placement offering exempt from registration under the Securities Act of 1933, as amended. ATXI expects to issue the notes and receive net proceeds of
$95 million in August 2022, which will be used to refinance the remaining portion of an intercompany long-term note with Ameren (parent), repay a $50 million principal payment of its 3.43% senior unsecured notes, and to repay short-term debt.
Indenture Provisions and Other Covenants See Note 5 Long-term Debt and Equity Financings under Part II, Item 8, in the Form 10-K for a description of our indenture provisions and other covenants, as well as restrictions on the payment of dividends. At March 31 2022, the Ameren Companies were in compliance with the provisions and covenants contained in their indentures and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreements.
Off-balance-sheet Arrangements At March 31 2022, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than variable interest entities and the multiple forward sale agreements under the ATM program relating to common stock. See Note I Summary of SignificantAccounting Policies for further detail concerning variable interest entities.
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NOTE 5 OTHER INCOME, NET The following table presents the components of Other Income, Net in the Ameren Companies statements of income for the three months ended March 31 2022 and 2021 1 Three Months 2022 2021 Ameren:
Allowanceforequityfundsusedduringconstruction $ 8 $ 7 Interest income on industrial development revenue bonds 6 6 Non-service cost components of net periodic benefit income(a) 46 34 Miscellaneous income 7 5 Donations (2) (3)
Miscellaneous expense (5) (3)
Total Other Income, Net $ 60 $ 46 Ameren Missouri:
Allowance for equity funds used during construction $ 4 $ 4 Interest income on industrial development revenue bonds 6 6 Non-service cost components of net periodic benefit income2 14 14 Miscellaneous income 2 1 Donations (1)
Miscellaneous expense (2) (2)
Total Other Income, Net $ 23 $ 23 Ameren Illinois:
Allowanceforequityfundsusedduringconstruction $ 4 $ 3 Non-service cost components of net periodic benefit income 21 14 Miscellaneous income 2 1 Donations (1) (3)
Miscellaneousexpense (2) (1)
TotalOtherincomeNet $ 24 $ 14 (a) For the three months ended March 31 2022 and 2021 the non-service cost components of net periodic benefit income were adjusted by amounts deferred of $6 million and less than $(1) million, respectively, due to a regulatory tracking mechanism for the difference between the level of such costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.
NOTE 6 DERIVATIVE FINANCIAL INSTRUMENTS We use derivatives to manage the risk of changes in market prices for natural gas, power, and uranium, as well as the risk of changes in rail transportation surcharges through fuel oil hedges. Such price fluctuations may cause the following:
I an unrealized appreciation or depreciation of our contracted commitments to purchase or sell when purchase or sale prices under the commitments are compared with current commodity prices;
. market values of natural gas and uranium inventories that differ from the cost of those commodities in inventory; e actual cash outlays for the purchase of these commodities that differ from anticipated cash outlays; and
. actual off-system sales revenues that differ from anticipated revenues.
The derivatives that we use to hedge these risks are governed by our risk management policies for forward contracts, futures, options, and swaps. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The goal of the hedging program is generally to mitigate financial risks while ensuring that sufficient volumes are available to meet our requirements. Contracts we enter into as part of our risk management program may be settled financially, settled by physical delivery, or net settled with the counterparty.
All contracts considered to be derivative instruments are required to be recorded on the balance sheet at their fair values, unless the NPNS exception applies. Many of our physical contracts, such as our purchased power contracts, qualify for the NPNS exception to derivative accounting rules. The revenue or expense on NPNS contracts is recognized at the contract price upon physical delivery. The following disclosures exclude NPNS contracts and other non-derivative commodity contracts that are accounted for under the accrual method of accounting.
If we determine that a contract meets the definition of a derivative and is not eligible for the NPNS exception, we review the contract to determine whether the resulting gains or losses qualify for regulatory deferral. Derivative contracts that qualify for regulatory deferral are recorded at fair value, with changes in fair value recorded as regulatory assets or liabilities in the period in which the change occurs. We 21
believe derivative losses and gains deferred as regulatory assets and liabilities are probable of recovery, or refund, through future rates charged to customers. Regulatory assets and liabilities are amortized to operating income as related losses and gains are reflected in rates charged to customers. Therefore, gains and losses on these derivatives have no effect on operating income. As of March 31 2022, and December 31, ,
2021 all contracts that met the definition of a derivative and were not eligible for the NPNS exception received regulatory deferral. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.
The following table presents open gross commodity contract volumes by commodity type for derivative assets and liabilities as of March 31, 2022, and December 31 2021 As of March 31 2022, these contracts extended through October 2024, October 2027, May 2032 and March 2024 for fuel oils, natural gas, power and uranium, respectively.
Quantity (in millions)
March 31, 2022 December 31, 2021 Ameren Ameren Commodity Missouri Ameren Illinois Ameren Missouri Ameren Illinois Ameren Fuel oils (in gallons) 25 25 30 30 Naturalgas(inmmbtu) 36 146 182 35 144 179 Power (in MWhs) 4 6 10 6 6 12 Uranium (pounds in thousands) 496 496 586 586 The following table presents the carrying value and balance sheet location of all derivative commodity contracts, none of which were designated as hedging instruments, as of March 31 2022, and December 31 2021:
March 31, 2022 December 31, 2021 Ameren Ameren Ameren Ameren Balance Sheet Location Missouri Illinois Ameren Missouri Illinois Ameren Fuel oils Mark-to-market derivative assets $ (a) $ $ 18 $ (a) $ $ 8 Other current assets 18 8 Other assets 8 8 5 5 Natural gas Mark-to-market derivative assets (a) 74 90 (a) 28 35 Other current assets 16 7 Other assets 10 23 33 5 13 18 Power Mark-to-marketderivative assets (a) 5 24 (a) 23 Other current assets 19 23 Other assets Uranium Mark-to-market derivative assets (a) 5 (a)
Other current assets 5 Other assets 2 2 1 I Total assets $ 78 $ 102 $ 180 $ 49 $ 41 $ 90 Natural gas Mark-to-market derivative liabilities (a) (a) 2 (a) (a)
Other current liabilities 2 2 6 8 Other deferred credits and liabilities I I 2 I 2 3 Power Mark-to-market derivative liabilities 109 (a) (a) 50 (a) (a)
Other current liabilities I I 10 9 59 Otherdeferred credits and liabilities 26 78 104 23 108 131 Uranium Mark-to-market derivative liabilities (a) (a) I (a) (a)
Other current liabilities I Total liabilities $ 136 $ 82 $ 218 $ 77 $ 125 $ 202 (a) Balance sheet line item not applicable to registrant.
We believe that entering into master netting arrangements or similar agreements mitigates the level of financial loss that could result from default by allowing net settlement of derivative assets and liabilities. These master netting arrangements allow the counterparties to net settle sale and purchase transactions. Further, collateral requirements are calculated at the master netting arrangement or similar agreement level by counterparty.
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The following table provides the recognized gross derivative balances and the net amounts of those derivatives subject to an enforceable master netting arrangement or similar agreement as of March 31 2022, and December 31 2021.
Gross Amounts Not Offset inthe Balance Sheet Gross Amounts Recognized in the cash collateral Net commodity contracts Eligible to be Offset Balance Sheet Derivative Instruments ReceivedlPosted(a) Amount 2022 Assets:
Ameren Missouri $ 78 $ 19 $ 5 $ 54 Ameren Illinois 102 6 9 87 Ameren $ 180 $ 25 $ 14 $ 141 Liabilities:
Ameren Missouri $ 136 s 19 $ 92 $ 25 Ameren Illinois 82 6 76 Ameren $ 218 $ 25 $ 92 $ 101 2021 Assets:
Ameren Missouri $ 49 $ 15 $ $ 34 Ameren Illinois 41 4 37 Ameren $ 90 $ 19 $ $ 71 Liabilities:
Ameren Missouri $ 77 $ 15 $ 47 s 15 Ameren Illinois 125 4 121 Ameren $ 202 $ 19 $ 47 $ 136 (a) Cash collateral received reduces gross asset balances and is included in Other current liabilities and Other deferred credits and liabilities on the balance sheet. Cash collateral posted reduces gross liability balances and is included in Other current assets and Other assets on the balance sheet.
Credit Risk In determining our concentrations of credit risk related to derivative instruments, we review our individual counterparties and categorize each counterparty into groupings according to the primary business in which each engages. As of March 31 2022, if counterparty groups were to fail completely to perform on contracts, Ameren, Ameren Missouri, and Ameren Illinois maximum exposure related to derivative assets, predominantly from financial institutions, was $1 76 million, $79 million, and $97 million, respectively. The potential loss on counterparty exposures may be reduced or eliminated by the application of master netting arrangements or similar agreements and collateral held. As of March 31 2022, the potential loss after consideration of the application of master netting arrangements or similar agreements and collateral held forAmeren, Ameren Missouri, and Ameren Illinois was $144 million, $56 million, and $88 million, respectively.
Certain of our derivative instruments contain collateral provisions tied to the Ameren Companies credit ratings. If our credit ratings were downgraded below investment grade, or if a counterparty with reasonable grounds for uncertainty regarding our ability to satisfy an obligation requested adequate assurance of performance, additional collateral postings might be required. The additional collateral required is the net liability position allowed under master netting arrangements or similar agreements, assuming (1) the credit risk-related contingent features underlng these arrangements were triggered and (2) those counterparties with rights to do so requested collateral. The following table presents, as of March 31 2022, the aggregate fair value of all derivative instruments with credit risk-related contingent features in a gross liability position, the cash collateral posted, and the aggregate amount of additional collateral that counterparties could require.
Aggregate Fair Value of cash Potential Aggregate Amount of Derivative Liabilities(a) Collateral Posted Additional Collateral Required(b)
Ameren Missouri $ 36 $ 18 $ 7 Ameren Illinois 4 4 Ameren $ 40 $ 18 $ 11 (a) Before consideration of master netting arrangements or similar agreements.
(b) As collateral requirements with certain counterparties are based on master netting arrangements or similar agreements, the aggregate amount of additional collateral required to be posted is determined after consideration of the effects of such arrangements.
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NOTE 7 FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAR See Note 8 Fair Value Measurements under Part II, Item 8, ofthe Form JO-k for information related to hierarchy levels and valuation techniques.
We consider nonperformance risk in our valuation of derivative instruments by analyzing our own credit standing and the credit standing of our counterparties, and by considering any credit enhancements (e.g. collateral). Included in our valuation, and based on current market conditions, is a valuation adjustment for counterparty default derived from market data such as the price of credit default swaps, bond yields, and credit ratings. No material gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in the three months ended March 3J 2022 or 202J At March 3J 2022, and December 3J 202J the counterparty default risk valuation adjustment related to derivative contracts was immaterial for Ameren, Ameren Missouri, and Ameren Illinois.
The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of March 3J 2022, and December 3J 202J:
March3l,2022 December3l,2021 Level I Level 2 Level 3 Total Level I Level 2 Level 3 Total Assets:
Ameren Missouri Derivative assets commodity contracts:
Fueloils $ 24 $ $ 2 $ 26 $ 13 $ S $ 13 Natural gas 26 26 12 12 Power 18 I 19 10 13 23 Uranium 7 7 1 1 Total derivative assets commodity contracts
$ 42 $ 26 $ 10 $ 78 $ 23 $ 12 $ 14 $ 49 N uclear decommissioning trust fund:
Equity securities:
U.S. large capitalization $ 719 $ $ $ 719 $ 824 $ $ $ 824 Debt securities:
USTreasuryandagencysecurities 174 174 141 141 Corporatebonds 133 133 131 131 Other 61 61 56 56 Total nucleardecommissioningtrustfund $ 719 $ 368 $ $ 1,087 (a) 824 S 328 $ $ 1,152 (a)
TotalAmerenMissouri $ 761 $ 394 $ 10 $ 1,165 $ 847 $ 340 $ 14 $ 1,201 Ameren Illinois Derivative assets commodity contracts:
Naturalgas $ 7 $ 77 $ 13 $ 97 $ I $ 33 $ 7 $ 41 Power 5 5 TotalAmeren Illinois $ 7 $ 77 $ 18 $ 102 $ I $ 33 $ 7 $ 41 Ameren Derivative assets commodity contracts)b)
$ 49 $ 103 $ 28 $ 180 $ 24 5 45 $ 21 $ 90 Nucleardecommissioningtrustfund)c) 7f9 36$ 1,067 (a) 824 328 1,152 (a)
TotalAmeren $ 76$ $ 471 $ 28 $ 1,267 $ 848 $ 373 $ 21 $ 1,242 Liabilities:
Ameren Missouri Derivative liabilities commodity contracts:
Natural gas $ $ I $ $ I $ $ 2 S 1 $ 3 Power $1 54 135 45 28 73 Uranium 1 1 TotalArnerenMissouri $ $1 $ I $ 54 $ 136 $ 45 S 2 $ 30 $ 77 24
March 31, 2022 Decembet 31, 2021 Level I Level 2 Level 3 Total Level I Level 2 Level 3 Total Ameten Illinois Derivative liabilities commodity contracts:
Naturalgas $ $ I $ 2 $ 3 $ $ 5 $ 3 $ 8 Power 79 79 117 117 TotalAmeren Illinois $ $ I $ 81 $ $2 $ $ 5 $ 120 $ 125 Ameren Derivative liabilities commodity contractsfb)
$ J $ 2 $ 135 $ 218 $ 45 $ 7 $ 150 $ 202 (a) Balance excludes $7 million of cash and cash equivalents, receivables, payables, and accrued income, net, for both March 31 2022, and December 31 2021.
(b) See the Ameren Missouri and Ameren Illinois sections ofthe table for a breakout ofthe fair value ofAmerens derivative assets and liabilities by type of commodity.
(c) See the Ameren Missouri section of the table for a breakout of the fair value ofAmerens nuclear decommissioning trust fund by investment type.
Level 3 fuel oils, natural gas, and uranium derivative contract assets and liabilities measured at fair value on a recurring basis were immaterial for all periods presented. The following table presents the fair value reconciliation of Level 3 power derivative contract assets and liabilities measured at fair value on a recurring basis for the three months ended March 31 2022 and 2021: ,
2022 2021 Ameren Ameren Ameten Ameten Missouri Illinois Ameten Missouri Illinois Ameten For the three months ended March 31:
Beginning balance atJanuary I $ (15) $ (117) $ (132) $ 2 $ (198) $ (196)
Realized and unrealized gainsl(losses) included in regulatory assetslliabilities (41) 42 1 (5) 9 4 Settlements 3 1 4 4 4 Ending balance at March 31 $ (53) $ (74) $ (127) $ (3) $ (185) $ (188)
Change in unrealized gainsl(losses) related to assets/liabilities held at March 31 $ (38) $ 42 $ 4 $ (3) $ 9 $ 6 All gains or losses related to our Level 3 derivative commodity contracts are expected to be recovered or returned through customer rates; therefore, there is no impact to either net income or other comprehensive income resulting from changes in the fair value of these instruments.
The following table describes the valuation techniques and significant unobservable inputs utilized for the fair value of our Level 3 power derivative contract assets and liabilities as of March 31 2022, and December 31 2021:
Fair Value Weighted commodit, Assets Liabilities Valuation Technique(s) Unobservable Inputfa) Range Averagefb) 2022 Powe) $ 6 $ (133) Discounted cash flow AIgefOIWardpeaknd off-peak pricing 82 51 Nodal basis ($/MWh) (16) 0 (3)
Trend rate (%) (e) (1) 2021 Power $ 13 (145) Discounted cash flow Averageforwardpeakand off-peak pricing 32 55 40 Nodal basis ($IMWh) (14) 0 (2)
Trend rate (%) (e) 0 (a) Generally, significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement.
(b) Unobservable inputs were weighted by relative fair value.
(c) Valuations through 2031 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2031 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
(d) Valuations through 2029 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2029 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
(e) No meaningful range around weighted average.
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The following table sets forth the carrying amount and, by level within the fair value hierarchy, the fair value of financial assets and liabilities disclosed, but not recorded, at fair value as of March 31 2022, and December 31 2021:
Carryin Fair Value Amoun? Levell Level2 Level3 Total March 31, 2022 Ameren:
Cash, cash equivalents, and restricted cash $ 154 $ 154 $ $ $ 154 Investments in industrial development revenue bondsta) 248 248 248 Short-term debt 1,101 1,101 1,101 Long-term debt (including current portion)(a) 13,068 fb) 12,615 526 (C) j3,j4j Ameren Missouri:
Cash, cash equivalents, and restricted cash $ 9 $ 9 $ $ $ 9 Investments in industrial development revenue bonds(a) 248 248 248 Short-term debt 528 528 528 Long-term debt (including current portion)fa) 5,619 (b) 5,701 5,701 Ameren Illinois:
Cash, cash equivalents, and restricted cash $ 137 $ 137 $ $ $ 137 Short-termdebt 107 107 107 Long-term debt (including current portion) 4,393 4,457 4,457 December 31, 2021 Ameren:
Cash, cash equivalents, and restricted cash $ 155 $ 155 $ $ $ 155 Investments in industrial development revenue bonds(a) 248 248 248 Short-term debt 545 545 545 Long-term debt (including current portion)(a) 13,067 fb]
13,930 591 (c) 14,521 Ameren Missouri:
Cash, cash equivalents, and restricted cash $ 8 $ 8 $ $ $ 8 Investments in industrial development revenue bondsfa) 248 248 248 Short-termdebt 165 165 165 Long-term debt (including current portion)(a) 5,619 (b) 6,321 6,321 Ameren Illinois:
Cash, cash equivalents, and restricted cash $ 133 $ 133 $ $ $ 133 Short-termdebt 103 103 103 Long-term debt (including current portion) 4,392 to] 4,971 4,971 (a) Ameren and Ameren Missouri have investments in industrial development revenue bonds, classified as held-to-maturity and recorded in OtherAssets, that are equal to the finance obligations for the Peno Creek and Audrain CT energy centers. As of March 31 2022, and December 31 2021 the carrying amount of both the investments in industrial development revenue bonds and the finance obligations approximated fair value.
(b) Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $94 million, $38 million, and $38 million forAmeren, Ameren Missoun, and Ameren Illinois, respectively, as of March 31 2022. Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $94 million, $38 million, and $39 million forAmeren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31 2021.
(c) The Level 3 fair value amount consists ofATXIs senior unsecured notes.
NOTE 8 RELATED-PARTY TRANSACTIONS In the ordinary course of business, Ameren Missouri and Ameren Illinois have engaged in, and may in the future engage in, affiliate transactions. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings. Transactions between Amerens subsidiaries are reported as affiliate transactions on their individual financial statements, but those transactions are eliminated in consolidation for Amerens consolidated financial statements. For a discussion of material related-party agreements and money pool arrangements, see Note I 3 Related-party Transactions and Note 4 Short-term Debt and Liquidity under Part II, Item 8, ofthe Form 10-K.
Support Services Agreements At both March 31 2022 and December 31 2021 Ameren Missouri and Ameren Illinois had long-term receivables included in Other assets from Ameren Services of $77 million and $80 million, respectively, related to Ameren Services allocated portion ofAmerens pension and postretirement benefit plans.
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Tax Allocation Agreement See Note I Summary olSignificantAccounting Policies under Part II, Item 8, ofthe Form JO-K for a discussion ofthe tax allocation agreement. The following table presents the affiliate balances related to income taxes for Ameren Missouri and Ameren Illinois as of March 31, 2022, and December31, 2021:
March 31, 2022 December31, 2021 Ameren Missouri Ameren Illinois Ameren Missouri Ameten Illinois Income taxes payable to parentfa) $ $ 42 $ $ 8 Income taxes receivable from parentfb) 33 27 18 (a) Included in Accounts payable affiliates on the balance sheet.
(b) Included in Accounts receivable affiliates on the balance sheet.
Effects of Related-party Transactions on the Statement of Income The following table presents the impact on Ameren Missouri and Ameren Illinois of related-party transactions for the three months ended March 31, 2022 and 2021:
Three Months Income Statement Ameren Ameren Agreement Line Item Missouri Illinois Ameren Missouri power supply Operating Revenues 2022 $ 4 $ (a) agreements with Ameren Illinois 2021 2 (a)
Ameren Missouri and Ameren Illinois Operating Revenues 2022 $ 6 $ (b) rent and facility services 2021 7 (b)
Ameren Missouri and Ameren Illinois miscellaneous Operating Revenues 2022 $ (b) $ I support services and other services provided to ATXI 2021 (b) (b)
TotalOperatingRevenues 2022 $ 10 $ I 2021 9 (b)
Ameren Illinois power supply Purchased Power 2022 $ (a) $ 4 agreements with Ameren Missouri 2021 (a) 2 Ameren Missouri and Ameren Illinois Purchased Power 2022 $ (b) $ (b) transmission services from ATXI 2021 1 (b)
Total Purchased Power 2022 $ (b) $ 4 2021 1 2 Ameren Missouh and Ameren Illinois Other Operations and Maintenance 2022 $ (b) $ I rent and facility services 2021 (b) I Ameren Services support services Other Operations and Maintenance 2022 $ 38 $ 35 agreement 2021 35 33 Total Other Operations and 2022 $ 38 $ 36 Maintenance 2021 35 34 Money pool borrowings (advances) (Interest charges)/Other Income, Net 2022 $ (b) $ (b) 2021 (b) (b)
(a) Not applicable.
(b) Amount less than $1 million.
NOTE 9 - COMMITMENTS AND CONTINGENCIES We are involved in legal, tax, and regulatory proceedings before various courts, regulatory commissions, authorities, and governmental agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in the notes to our financial statements in this report and in the Form 1 0-K, will not have a material adverse effect on our results of operations, financial position, or liquidity.
Reference is made to Note I Summary of Significant Accounting Policies, Note 2 Rate and Regulatory Matters, Note 9 Callaway Energy Center, Note 13 Related-party Transactions, and Note 14 Commitments and Contingencies under Part II, Item 8, ofthe Form 10-K.
See also Note 1 Summary of Significant Accounting Policies, Note 2 Rate and Regulatory Matters, Note 8 Related-party Transactions, and Note 1 0 Callaway Energy Center ofthis report.
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Environmental Matters Our electric generation, transmission, and distribution and natural gas distribution and storage operations must comply with a variety of statutes and regulations relating to the protection of the environment and human health and safety including permitting programs implemented via federal, state, and local authorities. Such environmental laws address air emissions; discharges to water bodies; the storage, handling and disposal of hazardous substances and waste materials; siting and land use requirements; and potential ecological impacts. Complex and lengthy processes are required to obtain and renew approvals, permits, and licenses for new, existing, or modified facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures. We employ dedicated personnel knowledgeable in environmental matters to oversee our business activities compliance with regulatory requirements.
Environmental regulations have a significant impact on the electric utility industry and compliance with these regulations could be costly for Ameren Missouri, which operates coal-fired power plants. Clean Air Act regulations that apply to the electric utility industry include the NSPS, the CSAPR, the MATS, and the National Ambient Air Quality Standards, which are subject to periodic review for certain pollutants. Collectively, these regulations cover a variety of pollutants, such as 502, particulate matter, NOx, mercury, toxic metals and acid gases, and CO2 emissions from new power plants. Regulations implementing the Clean Water Act govern both intake and discharges of water, and may require evaluation of the ecological and biological impact of our operations and could require modifications to water intake structures or more stringent limitations on wastewater discharges. Depending upon the scope of modifications ultimately required by state regulators, these capital expenditures could be significant. The management and disposal of coal ash is regulated under the Resource Conservation and Recovery Act and the CCR Rule, which require the closure of our surface impoundments at Ameren Missouris coal-fired energy centers. The individual or combined effects of existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of operations at some ofAmeren Missouris energy centers. Ameren and Ameren Missouri expect that such compliance costs would be recoverable through rates, subject to MoPSC prudence review, but the timing of costs and their recovery could be subject to regulatory lag.
Ameren and Ameren Missouri estimate that they will need to make capital expenditures of $125 million to $1 75 million from 2022 through 2026 in order to comply with existing environmental regulations. Additional environmental controls beyond 2026 could be required. This estimate of capital expenditures includes ash pond closure and corrective action measures required by the CCR Rule and the effluent limitation guidelines applicable to steam electric generating units, and potential modifications to cooling water intake structures at existing power plants under Clean WaterAct rules, all ofwhich are discussed below. In addition to planned retirements ofcoal-fired energy centers as setforth in the 2020 IRP and as noted in the NSR and Clean AirAct litigation discussed below, Ameren Missouris current plan for compliance with existing air emission regulations includes the closure ofthe Venice Energy Center by 2030 as discussed below in Illinois Emission Standards, burning low-sulfur coal and installing new or optimizing existing air pollution control equipment. The actual amount of capital expenditures required to comply with existing environmental regulations may vary substantially from the above estimates because of uncertainty as to future permitting requirements made by state regulators and the EPA, potential revisions to regulatory obligations, and the cost of potential compliance strategies, among other things.
The following sections describe the more significant environmental laws and rules and environmental enforcement and remediation matters that affect or could affect our operations. The EPA has initiated an administrative review of several regulations and proposed amendments to regulations and guidelines, including the CSAPR, which could ultimately result in the revision of all or part of such rules. Additionally, Ameren Missouris wind generation facilities may be subject to operating restrictions to limit the impact on protected species. Seasonal nighttime curtailment began at the High Prairie Renewable Energy Center at the end of March 2022, but the extent and duration of the curtailment is unknown at this time as assessment of mitigation technologies is ongoing. Nighttime operating restrictions may be required during the critical biological season, which typically occurs from April through October. Ameren Missouri does not anticipate these operating curtailments to result in significant impacts on its results of operations, financial position, or liquidity.
Clean AicAct Federal and state laws, including CSAPR, regulate emissions of 502 and NO through the reduction of emissions at their source and the use and retirement of emission allowances. CSAPR is implemented through a series of phases, and the second phase became effective in 201 7. In April 2022, the EPA proposed revisions to the CSAPR and additional emission reduction requirements may apply in subsequent years. Ameren Missouri complies with current CSAPR requirements by minimizing emissions through the use of low-sulfur coal, operation of two scrubbers at its Sioux Energy Center, and optimization of other existing air pollution control equipment. Ameren Missouri could incur additional costs to lower its emissions at one or more of its energy centers to comply with additional CSAPR requirements in future years. These additional costs for compliance are expected to be recovered from customers through the FAC or higher base rates.
CO2 Emissions Standards The EPAs Affordable Clean Energy Rule repealed the Clean Power Plan and replaced it with a new rule that established emission guidelines for states to follow in developing plans to limit CO2 emissions and identified certain efficiency measures as the best system of 28
emission reduction for coal-fired electric generating units. In January 2021 the United States Court ofAppeals for the District of Columbia Circuit vacated the Affordable Clean Energy Rule, and ruled that the EPA had the discretion to consider emission reduction measures that include efficiency measures and generation shifting to lower carbon emissions. The United States Supreme Court agreed to review the court of appeals ruling and oral arguments occurred in February 2022, with a decision expected by mid-2022. A decision by the United States Supreme Court could impact the EPAs development of new regulations to address carbon emissions from coal- and natural gas-fired electric generating units. At this time, Ameren Missouri cannot predict the outcome of the legal challenge or future rulemakings. As such, any impact on the results of operations, financial position, and liquidity ofAmeren and Ameren Missouri is uncertain.
NSR and Clean AirAct Litigation In January 201 1 the United States Department of Justice, on behalf ofthe EPA, filed a complaint againstAmeren Missouri in the United States District Court for the Eastern District of Missouri alleging that in performing projects at its coal-fired Rush Island Energy Center in 2007 and 2010, Ameren Missouri violated provisions of the Clean Air Act and Missouri law. In January 201 7, the district court issued a liability ruling against Ameren Missouri and, in September 201 9, entered a remedy order that required Ameren Missouri to install a flue gas desulfurization system at the Rush Island Energy Center and a dry sorbent injection system at the Labadie Energy Center. Ameren Missouri appealed both the liability and remedy orders and, in August 2021 the United States Court ofAppeals for the Eighth Circuit issued a decision that affirmed the liability ruling and the district courts remedy order as it related to the installation of a flue gas desulfurization system at the Rush Island Energy Center, but reversed the order as it related to the installation of a dry sorbent injection system at the Labadie Energy Center. In November 2021, the court of appeals issued an order denying requests for consideration previously sought by both Ameren Missouri and the United States Department of Justice.
Based on its assessment of available legal, operational, and regulatory alternatives, Ameren Missouri has determined not to further appeal the court rulings and, in December 2021 filed a motion with the district court to modify the remedy order to allow the retirement of the Rush Island Energy Center in advance of its previously expected useful life in lieu of installing a flue gas desulfurization system. The district court is under no deadline to issue a ruling revising the remedy order. In January 2022, the MISC completed a preliminary informational assessment regarding potential impacts of the retirement to the regional electric power system, which indicated transmission upgrades and voltage support would be needed in advance of the retirement of the Rush Island Energy Center to address reliability concerns. In February 2022, Ameren Missouri formally notified the MISC of its intent to retire the Rush Island Energy Center and requested the MISC to perform a final reliability assessment, which is expected to be completed in May 2022. The MISC must also separately approve the specific upgrades and transmission support required to address reliability concerns noted in the final assessment. Additionally, the MISC will determine whether reliability concerns require the Rush Island Energy Center to be classified as a system support resource, which should continue operating until the completion of to-be-specified transmission upgrades. If the Rush Island Energy Center were identified as a system support resource, an agreement detailing the manner of and time for continued operation would be filed with the FERC for approval. The district court has the authority to determine the retirement date and operating parameters for the Rush Island Energy Center and is not bound by the MISC determination or FERCs approval.
Related to this matter, in February 2022, the MoPSC issued an order directing the MoPSC staff to review the planned accelerated retirement of the Rush Island Energy Center. See Note 2 Rate and Regulatory Matters for additional information.
In connection with the planned accelerated retirement ofthe Rush Island Energy Center, Ameren Missouri expects to seek approval from the MoPSC to finance the costs associated with the retirement, including the remaining unrecovered net plant balance associated with the facility, through the issuance of securitized utility tariff bonds pursuant to the Missouri securitization statute that became effective in August 2021 As of March 31 2022, the Rush Island Energy Center had a net plant balance of approximately $0.6 billion included in plant to be abandoned, net, within Property, Plant, and Equipment, Net and a rate base of approximately $0.4 billion. See Note I Summary of Significant Accounting Policies under Part II, Item 8, ofthe Form 10-K for additional information regarding plantto be abandoned, net. In addition, Ameren Missouri expects to file an update to the 2020 IRP with the MoPSC in June 2022 to reflect the planned acceleration ofthe retirement ofthe Rush Island Energy Center from 2039, the retirement year for the facility as reflected in the 2020 IRP and reflected in depreciation rates approved by the December 2021 MoPSC electric rate order.
Ameren Missouri is unable to predict the ultimate resolution of this matter; however, such resolution could have a material adverse effect on the results of operations, financial position, and liquidity ofAmeren and Ameren Missouri.
Clean WaterAct The EPAs regulations implementing Section 316(b) ofthe Clean Water Act require power plant operators to evaluate cooling water intake structures and identify measures for reducing the number of aquatic organisms impinged on a power plants cooling water intake screens or entrained through the plants cooling water system. All ofAmeren Missouris coal-fired and nuclear energy centers are subject to the cooling water intake structures rule. Requirements of the rule are implemented by state regulators through the permit renewal process of each power plants water discharge permit, which is expected to be completed by 2023 forAmeren Missouri.
In 2015, the EPA issued a rule to revise the effluent limitation guidelines applicable to steam electric generating units. These guidelines established national standards for water discharges, prohibit effluent discharges of certain waste streams, and impose more stringent 29
limitations on certain water discharges from power plants. To meet the requirements ofthe guidelines, Ameren Missouri installed dry ash handling systems and in 2020 completed construction of wastewater treatment facilities at three of its four coal-fired energy centers. The Meramec Energy Center is scheduled to retire in 2022 and, as a result, does not require new wastewater and dry ash handling systems.
OCR Management The EPAs CCR Rule establishes requirements for the management and disposal of CCR from coal-fired power plants and will result in the closure of certain surface impoundments at Ameren Missouris energy centers. Ameren Missouri completed the closure of all surface impoundments at its Labadie and Rush Island energy centers in 2021 and has made significant progress by closing several impoundments at its Sioux and Meramec energy centers. Ameren Missouri plans to complete the closures of the remaining surface impoundments as required by the CCR Rule in 2023. In January 2022, Ameren Missouri received notice of a proposed determination by the EPA that it has rejected Ameren Missouris requests to extend the timeline for operating certain impoundments located at the Sioux and Meramec energy centers. Pursuant to the terms of the proposed determination, compliance with the CCR Rules requirements for closure of the impoundments would be required I 35 days after the EPA issues a final determination, which Ameren Missouri expects to be issued in the spring of 2022. IfAmeren Missouri was no longer able to use the surface impoundments at the Sioux or Meramec energy centers, Ameren Missouri would not be able to operate the energy centers unless an alternative for handling the CCR material was available. Ameren Missouri will retire the Meramec Energy Center in 2022, and construction is underway to complete a CCR Rule-compliant impoundment at the Sioux Energy Center to allow for continued operations.
Additionally, Ameren Missouri is seeking a reliability determination from the MISO, which, if granted and accepted by the EPA, would extend the deadline to comply with the requirement to close the surface impoundments and allow the energy centers to operate. Ameren expects the MISO determination to be completed in June 2022. Ameren Missouri does not expect that this matter will have a material adverse effect on its results of operations, financial position, or liquidity.
Ameren and Ameren Missouri have AROs of $79 million recorded on their respective balance sheets as of March 31 2022, associated with CCR storage facilities. Ameren Missouri estimates it will need to make capital expenditures of $60 million to $80 million from 2022 through 2026 to implement its CCR management compliance plan, which includes installation of groundwater monitoring equipment and groundwater treatment facilities.
Remediation The Ameren Companies are involved in a number of remediation actions to clean up sites impacted by the use or disposal of materials containing hazardous substances. Federal and state laws can require responsible parties to fund remediation regardless of their degree of fault, the legality of original disposal, or the ownership of a disposal site.
As of March 31 2022, Ameren Illinois has remediated the majority ofthe 44 former MGP sites in Illinois and could substantially conclude remediation efforts at the remaining sites by 2023. The ICC allows Ameren Illinois to recover such remediation and related litigation costs from its electric and natural gas utility customers through environmental cost riders that are subject to annual prudence reviews by the ICC. As of March 31 2022, Ameren Illinois estimated the remaining obligation related to these former MGP sites at $68 million to $125 million. Ameren and Ameren Illinois recorded a liability of $68 million to represent the estimated minimum obligation for these sites, as no other amount within the range was a better estimate.
The scope of the remediation activities at these former MGP sites may increase as remediation efforts continue. Considerable uncertainty remains in these estimates because many site-specific factors can influence the actual costs, including unanticipated underground structures, the degree to which groundwater is encountered, regulatory changes, local ordinances, and site accessibility. The actual costs and timing of completion may vary substantially from these estimates.
Our operations or those of our predecessor companies involve the use of, disposal of, and, in appropriate circumstances, the cleanup of substances regulated under environmental laws. We are unable to determine whether such historical practices will result in future environmental commitments or will affect our results of operations, financial position, or liquidity.
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Illinois Emission Standards The IETL established emission standards that became effective in September 2021 Ameren Missouris natural gas-fired energy centers in Illinois are subject to limits on emissions, including CO2 and NOx, equal to their unit-specific average emissions from 201 8 through 2020, for any rolling twelve-month period beginning October 1 2021 through 2029. Further reductions to emissions limits will become effective between 2030 and 2040, which could limit the operations ofAmeren Missouris five natural gas-fired energy centers located in the state of Illinois, and will result in the closure ofthe Venice Energy Center by 2030. These energy centers are utilized to support peak loads. Subjectto conditions in the IETL, these energy centers may be allowed to exceed the emissions limits in order to maintain reliability of electric utility service as necessary. Ameren Missouri is reviewing the emission standards and the effect they may have on its generation strategy, including any increases in capital expenditures or operating costs, and changes to the useful life of the Venice Energy Center. Ameren Missouri expects to file an update to the 2020 IRP with the MoPSC in June 2022 to reflect, among other things, the impact of these new emissions standards.
NOTE 10 - CALLAWAY ENERGY CENTER See Note 9 Callaway Energy Center under Part II, Item 8, ofthe Form 10-K for information regarding spent nuclear fuel recovery, recovery of decommissioning costs, and the nuclear decommissioning trust fund. The fair value of the trust fund for Ameren Missouris Callaway Energy Center is reported as Nuclear decommissioning trust fund in Amerens and Ameren Missouris balance sheets. This amount is legally restricted and may be used only to fund the costs of nuclear decommissioning. Changes in the fair value of the trust fund are recorded as an increase or decrease to the nuclear decommissioning trust fund, with an offsetting adjustment to the related regulatory liability. Ameren and Ameren Missouri have recorded an ARO for the Callaway Energy Center decommissioning costs at fair value, which represents the present value of estimated future cash outflows. Annual decommissioning costs of$7 million are included in the costs used to establish electric rates forAmeren Missouris customers. Every three years, the MoPSC requires Ameren Missouri to file an updated cost study and funding analysis for decommissioning its Callaway Energy Center. An updated cost study and funding analysis was filed with the MoPSC in November 2020 and reflected within the ARO.
In February 2021 the MoPSC approved no change in electric rates for decommissioning costs based on Ameren Missouris updated cost study funding analysis. See Note 13 Supplemental Information for more information on Ameren Missouris AROs.
Maintenance Outage See Note 9 Callaway Energy Center under Part II, Item 8, of the Form I 0-K for information regarding a maintenance outage from a non-nuclear operating issue related to the Callaway Energy Centers generator in late December 2020 and subsequent return to service on August 4, 2021 along with the related insurance claims. As of March 31 2022, a $26 million insurance receivable was included in Miscellaneous accounts receivable on Amerens and Ameren Missouris consolidated balance sheets related to lost sales insurance claims and capital expenditures. In April 2022, Ameren Missouri received $22 million from NEIL related to lost sales insurance claims.
Insurance The following table presents insurance coverage at Ameren Missouris Callaway Energy Center at April 1 2022: ,
Most Recent Maximum Assessments Type and Source of Coverage Renewal Date Maximum Coverages for Single Incidents Public liability and nuclear worker liability:
American Nuclear Insurers January 1 2022 $ 450 $
Pool participation (a) 13,073 138
$ 13,523 (C)
$ 138 Property damage:
NEIL and EMANI April 1, 2022 $ 3,200 26 (e)
Accidental outage:
NEIL April 1, 2022 $ 490 $ 7 fe)
(a) Provided through mandatory participation in an industrywide retrospective premium assessment program. The maximum coverage available is dependent on the number of United States commercial reactors participating in the program.
(b) Retrospective premium under the Price-Anderson Act. This is subject to retrospective assessment with respect to a covered loss in excess of $450 million in the event of an incident at any licensed United States commercial reactor, payable at $21 million per year.
(c) Limit ofliability for each incident underthe Price-Anderson liability provisions ofthe Atomic EnergyAct of 1954, as amended. This limit is subject to change to account for the effects of inflation and changes in the number of licensed power reactors.
(d) NEIL provides $2.7 billion in property damage, stabilization, decontamination, and premature decommissioning insurance for radiation events and $2.3 billion in property damage insurance for nonradiation events. EMANI provides $490 million in property damage insurance for both radiation and nonradiation events.
(e) All NEIL-insured plants could be subject to assessments should losses exceed the accumulated funds from NEIL.
(1 Accidental outage insurance provides for lost sales in the event of a prolonged accidental outage. Weekly indemnity up to $4.5 million for 52 weeks, which commences after the first 12 weeks of an outage, plus up to $3.6 million per week for a minimum of 71 weeks thereafter for a total not exceeding the policy limit of $490 million. Nonradiation events are limited to $328 million.
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The Price-Anderson Act is a federal law that limits the liability for claims from an incident involving any licensed United States commercial nuclear energy center. The limit is based on the number of licensed reactors. The limit of liability and the maximum potential annual payments are adjusted at least every five years for inflation to reflect changes in the Consumer Price Index. The most recent five-year inflationary adjustment became effective in November 201 8. Owners of a nuclear reactor cover this exposure through a combination of private insurance and mandatory participation in a financial protection pool, as established by the Price-Anderson Act.
Losses resulting from terrorist attacks on nuclear facilities insured by NEIL are subject to industrywide aggregates, such that terrorist acts against one or more commercial nuclear power plants within a stated time period would be treated as a single event, and the owners of the nuclear power plants would share the limit of liability. NEIL policies have an aggregate limit of $3.2 billion within a 12-month period for radiation events, or $1 .8 billion for events not involving radiation contamination, resulting from terrorist attacks. The EMANI policies are not subject to industrywide aggregates in the event of terrorist attacks on nuclear facilities.
If losses from a nuclear incident at the Callaway Energy Center exceed the limits of, or are not covered by insurance, or if coverage is unavailable, Ameren Missouri is at risk for any uninsured losses. If a serious nuclear incident were to occur, it could have a material adverse effect on Amerens and Ameren Missouris results of operations, financial position, or liquidity.
NOTE 11 RETIREMENT BENEFITS The following table presents the components ofthe net periodic benefit cost (income) incurred forAmerens pension and postretirement benefit plans for the three months ended March 31 2022 and 2021: ,
Pension Benefits Postretirement Benefits Three Months Three Months 2022 2021 2022 2021 Service cost(a) $ 33 $ 33 $ 5 $ 6 Non-service cost components:
Interestcost 40 38 8 8 Expected return on plan assets (80) (75) (21) (20)
Amortization of:
Prior service benefit (1) (1)
Actuarial loss (gain) 6 17 (4) (1)
Total non-service cost components(b) $ (34) $ (20) $ (18) $ (14)
Net periodic benefit cost (income) $ (1) $ 13 $ (13) $ (8)
(a) Service cost, net of capitalization, is reflected in Operating Expenses Other operations and maintenance on Amerens statement of income.
(b) Non-service cost components are reflected in Other Income, Net on Amerens statement of income. See Note 5 Other Income, Net, for additional information.
Ameren Missouri and Ameren Illinois are responsible for their respective share ofAmerens pension and other postretirement costs. The following table presents the respective share of net periodic pension and other postretirement benefit costs (income) incurred for the three months ended March 31, 2022 and 2021:
Pension Benefits Postretirement Benefits Three Months Three Months 2022 2021 2022 2021 Ameren Missouri(a) $ (1) 6 $ (3) $ (1)
Ameren Illinois I 8 (10) (7)
Other (1) (1)
Amerenfa) $
(1) S 13 $ (13) $
(a) Does not include the impact of the regulatory tracking mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.
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NOTE 12 INCOME TAXES The following table presents a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the three months ended March 31 2022 and 2021:
Ameren Ameren Missouri Ameren Illinois 2022 2021 2022 2021 2022 2021 Three Months Federal statutory corporate income tax rate 21 % 21 % 21 % 21 % 21 % 21 %
Increases (decreases) from:
Amortization ofdeferred investmenttax credit (1) (1) (1)
Amortization of excess deferred taxesfa) (8) (9) (16) (1 7) (2) (2)
Depreciation differences 1 (1)
Renewable and other tax creditstb) (5) (6) (1 1) (1 1)
Statetax 5 6 3 3 7 7 Stock-basedcompensaUon (1)(
Effective income tax rate 12 % 10 % (4)% (4)% 26 % 25 %
(a) Reflects the amortization of amounts resulting from the revaluation of deferred income taxes subject to regulatory ratemaking, which are being refunded to customers. Deferred income taxes are revalued when federal or state income tax rates change, and the offset to the revaluation of deferred income taxes subject to regulatory ratemaking is recorded to a regulatory asset or liability.
(b) Includes credits associated with the High Prairie and Atchison renewable energy centers. Ameren Missouri placed the High Prairie renewable energy center in service in December 2020. Additionally, Ameren Missouri placed in service the wind turbines at itsAtchison renewable energy centerthroughoutthe first half of 2021. The benefit of the credits associated with Missouri renewable energy standard compliance is refunded to customers through the RESRAM.
NOTE 13 SUPPLEMENTAL INFORMATION Cash, Cash Equivalents, and Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows at March 31 2022, and December 31 2021:
March 31, 2022 December31, 2021 Ameren Ameren Ameren Ameren Ameren Missouri Illinois Ameren Missouri Illinois cash and cash equivalents $ 7 $ I $ $ 8 $ $
Restricted cash included in Other current assets 10 3 5 16 4 6 Restricted cash included in Otherassets 132 132 127 127 Restricted cash included in Nuclear decommissioning trust fund 5 5 4 4 Total cash, cash equivalents, and restricted cash $ 154 $ 9 $ 137 $ 155 $ 8 $ 133 Restricted cash included in Other current assets primarily represents funds held by an irrevocable Voluntary Employee Beneficiary Association (VEBA) trust, which provides health care benefits for active employees. Restricted cash included in Other assets on Amerens and Ameren Illinois balance sheets primarily represents amounts collected under a cost recovery rider restricted for use in the procurement of renewable energy credits and amounts in a trust fund restricted for the use of funding certain asbestos-related claims.
Accounts Receivable Accounts receivable trade on Amerens and Ameren Illinois balance sheets include certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At March 31 2022, and December 31 2021, Other current liabilities on Amerens and Ameren Illinois balance sheets included payables for purchased receivables of $29 million and $27 million, respectively.
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The following table provides a reconciliation of the beginning and ending amount of the allowance for doubtful accounts for the three months ended March 31 2022 and 2021:
Three Months 2022 2021 Ameren:
Beginning of period $ 29 $ 50 Bad debt expense 4 4 Net write-offs (5) (7)
Endofpenod $ 28 s 47 Ameren Missouri:
Beginning ofperiod $ 13 $ 16 Bad debt expense j Net wnte-offs (3) (2)
End of period $ 11 $ 15 Ameren Illinois:ta)
Beginning ofperiod $ 16 $ 34 Bad debt expense 3 3 Netwnte-offs (2) (5)
End of period $ 17 $ 32 (a) Ameren Illinois has rate-adjustment mechanisms that allow it to recover the difference between its actual net bad debt wnte-offs under GAAF including those associated with receivables purchased from alternative retail electric suppliers, and the amount of net bad debt write-offs included in its base rates.
Supplemental Cash Flow Information Capital expenditures at Ameren and Ameren Missouri included wind generation expenditures of an immaterial amount for the three months ended March 31 2022, and $193 million for the three months ended March 31 2021. ,
The following table provides noncash financing and investing activity excluded from the statements of cash flows for the three months ended March 37, 2022 and 2021:
March 31, 2022 March 31, 2021 Ameren Ameren Ameren Ameren Ameren Missouri Illinois Ameren Missouri Illinois Investing Accruedcapitalexpenditures $ 345 $ 194 $ 147 S 271 $ 141 $ 139 Net realized and unrealized gainl(loss) nuclear decommissioning trust fund (71) (71) 22 22 Financing Issuance of common stock for stock-based compensation $ 31 $ $ $ 33 $ $
Issuance of common stock under the DRPIu5 8 34
Asset Retirement Obligations The following table provides a reconciliation of the beginning and ending carrying amount ofAROs for the three months ended March 31, 2022:
Ameren Ameren Missouri Illinois Ameren Balance at December 31, 2021 $ 760 (a) 4 (b)
$ 764 (a)
Accretion 8 (C) 8 (C)
Change in estimates 4 )d) 4 (U)
Balance at March 31, 2022 $ 772 4 )b)
$ 776 (a)
(a) Balance included $7 million in Other current liabilities on the balance sheet as of both March 31, 2022, and December 31, 2021.
(b) Included in Other deferred credits and liabilities on the balance sheet.
(c) Accretion expense attributable toAmeren Missouri was recorded as a decrease to regulatory liabilities.
(d) Ameren Missouri changed its fair value estimate primarily due to the change in useful life of the Sioux Energy Center as reflected in depreciation rates approved by the December 2021 electric rate order, which became effective in 2022.
Stock-based Compensation In the first quarter of 2022, Ameren granted 267,849 performance share units with a grant date fair value of $25 million and I 22,882 restricted share units with a grant date fair value of $1 I million. Awards vest approximately 3 years after the grant date or on a pro-rata basis upon death or eligible retirement. The performance share units vest based on the achievement of certain specified market performance measures (229,566 performance share units) or clean energy transition targets (38,283 performance share units). The exact number of shares issued pursuant to a performance share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals.
For the three months ended March 31 2022 and 2021 excess tax benefits associated with the settlement of stock-based compensation awards reduced income tax expense by $5 million in both periods.
Deferred Compensation At March 31 2022, and December 31 2021 the present value of benefits to be paid for deferred compensation obligations was $91 million in both periods, which was primarily reflected in Other deferred credits and liabilities on Amerens consolidated balance sheet.
Operating Revenues As of March 31 2022 and 2021 our remaining performance obligations for contracts with a term greater than one year were immaterial. The Ameren Companies elected not to disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of the end of the reporting period for contracts with an initial expected term of one year or less.
See Note 14 Segment Information for disaggregated revenue information.
Excise Taxes Ameren Missouri and Ameren Illinois collect from their customers excise taxes, including municipal and state excise taxes and gross receipts taxes that are levied on the sale or distribution of natural gas and electricity. The following table presents the excise taxes recorded on a gross basis in Operating Revenues Electric, Operating Revenues Natural gas and Operating Expenses Taxes other than income taxes on the statements of income for the three months ended March 31 2022 and 2021: ,
Three Months 2022 2021 Ameren Missouri $ 34 $ 31 Ameren Illinois 45 39 Ameren . ... ,
. . $ 79 $ -
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Earnings per Share The following table reconciles the basic weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the three months ended March 31 2022 and 2021: ,
Three Months 2022 2021 Weighted-average common Shares Outstanding Basic 257.9 2544 Assumed settlement of performance share units and restricted stock units 1.1 1.5 Weighted-average common Shares Outstanding Diuted(a) 259.0 255.9 (a) There was an immaterial number of anti-dilutive securities excluded from the earnings per diluted share calculations for the three months ended March 31 2022. There were no anti-dilutive securities excluded from the earnings per diluted share calculations for the three months ended March 31 2021. ,
NOTE 14 SEGMENT INFORMATION The following tables present revenues, net income attributable to common shareholders, and capital expenditures by segment atAmeren and Ameren Illinois for the three months ended March 31 2022 and 2021 Ameren, Ameren Missouri, and Ameren Illinois management review segment capital expenditure information rather than any individual or total asset amount. For additional information about our segments, see Note 16 Segment Information under Part II, Item 8, ofthe Form 10-K.
Ameren Ameren Ameren Ameren Illinois Electric Illinois Ameren Intersegment Missouri Distribution Natural Gas Transmission Other Eliminations Ameren Three Months 2022:
Externalrevenues $ 808 $ 464 $ 481 $ 126 $ $ $ 1,879 lntersegment revenues 10 1 20 (31)
Net income attributable to Ameren common shareholders 50 49 80 58 (a) j5 252 capital expenditures 414 138 49 172 2 (1) 774 Three Months 2021:
Externalrevenues $ 695 $ 411 $ 347 $ 113 $ $ $ 1,566 lntersegmentrevenues 9 17 (26)
Net income attributable to Ameren common shareholders 47 46 75 47 (a) 18 233 capital expenditures 534 b) 157 48 141 1 6 887 (a) Ameren Transmission earnings reflect an allocation of financing costs from Ameren (parent).
(b) Includes $193 million atAmeren and Ameren Missouri for wind generation expenditures forthe three months ended March 31, 2021.
Ameren Illinois Ameren Illinois Ameren Electric Illinois Natural Ameren Illinois lntersegment Distribution Gas Transmission Eliminations Ameren Illinois Three Months 2022:
Externairevenues $ 465 $ 481 $ 78 $ $ 1,024 Intersegmentrevenues 20 (20)
Net income available to common shareholder 49 80 40 169 capital expenditures 138 49 155 342 Three Months 2021:
Extemalrevenues $ 411 $ 347 $ 65 $ $ 823 Intersegmentrevenues 16 (16)
Net income available to common shareholder 46 75 28 149 capital expenditures -
1 57 48 132 337 36
The following tables present disaggregated revenues by segment atAmeren and Ameren Illinois for the three months ended March 31 2022 ,
and 2021 Economic factors affect the nature, timing, amount, and uncertainty of revenues and cash flows in a similar manner across customer classes. Revenues from alternative revenue programs have a similar distribution among customer classes as revenues from contracts with customers. Other revenues not associated with contracts with customers are presented in the Other customer classification, along with electric transmission and off-system revenues.
Ameren Ameren Illinois Ameren Electric Ameren Illinois Ameren Intersegment Missouri Distribution Natural Gas Transmission Eliminations Ameren Three Months 2022:
Residential $ 332 $ 263 $ $ $ $ 595 Commercial 240 158 398 Industrial 57 45 102 Other --,-
109 (1) 146 (31) 223 Totalelectricrevenues $ 738 $ 465 $ $ 146 $ (31) $ 1,318 Residential $ 51 $ $ 369 $ $ $ 420 commercial 22 97 119 Industrial 2 17 19 Other 5 (2) 3 Total natural gas revenues $ 80 $ $ 481 $ $ $ 561 Totalrevenues(a) $ 818 $ 465 $ 481 $ 146 $ (31) $ 1,879 Three Months 2021:
Residential $ 312 $ 229 $ $ $ $ 541 commercial 216 132 348 Industrial 52 34 86 Other 61 16 130 (26) 181 Totalelectncrevenues $ 641 $ 411 $ $ 130 $ (26) $ 1156 Residential $ 34 $ $ 251 $ $ $ 285 Commercial 15 64 79 Industrial I 14 15 Other 13 18 31 Totalnaturalgasrevenues $ 63 $ $ 347 $ $ $ 410 Totalrevenuesfa) $ 704 $ 411 $ 347 $ 130 $ (26) $ 1,566 (a) The following table presents increasesl(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the three months ended March 31 2022 and 2021:
Ameren Illinois Ameren Ameren Electric Illinois Ameren Missouri Distribution Natural Gas Transmission Ameren Three Months 2022:
Revenues from altemative revenue programs $ (6) $ 55 $ (5) $ I $ 45 Other revenues not from contracts with customers (a) 2 (a) 1 3 Three Months 2021:
Revenues from altemative revenue programs $ (10) $ 61 $ 3 $ (1) $ 53 Other revenues not from contracts with customers (2) 3 1 2 (a) Includes insurance recovenes related to lost sales associated with the Callaway Energy Center maintenance outage. See Note 1 0 Callaway Energy Center for additional information.
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Ameren Illinois Ameren Illinois Ameren Electric Illinois Ameren Illinois Intersegment Distribution Natural Gas Transmission Eliminations Ameren Illinois Three Months 2022:
Residential $ 263 $ 369 $ $ $ 632 Commercial 158 97 255 Industrial 45 17 62 Other (1) (2) 98 (20) 75 Total revenues(a) 465 $ 481 $ 98 $ (20) $ 1,024 Three Months 2021:
Residential $ 229 $ 251 $ $ $ 480 Commercial 132 64 196 Industrial 34 14 48 Other 16 18 81 (16) 99 Thtalrevenues(a) $ 411 $ 347 $ 81 $ (16) $ 823 (a) The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the Ameren Illinois segments for the three months ended March 31, 2022 and 2021:
Ameren Illinois Electric Ameren Illinois Ameren Illinois Distribution Natural Gas Transmission Ameren Illinois Three Months 2022:
Revenues from alternative revenue programs $ 55 $ (5) $ I $ 51 Other revenues not from contracts with customers 2 1 3 Three Months 2021:
Revenues from alternative revenue programs $ 61 $ 3 S (1) $ 63 Other revenues not from contracts with customers 3 1 4 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the financial statements contained in this Form 1O-Q, as well as Managements Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors contained in the Form 10-K. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of our business segments to provide a better understanding of how those segments and their results affect the financial condition and results of operations ofAmeren as a whole. Also see the Glossary of Terms and Abbreviations at the front ofthis report and in the Form I 0-K.
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Amerens subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Amerens common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Amerens principal subsidiaries are listed below. Ameren has other subsidiaries that conduct other activities, such as providing shared services.
. Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
. Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois.
. ATXI operates a FERC rate-regulated electric transmission business in the MlSO.
Amerens and Ameren Missouris financial statements are prepared on a consolidated basis and therefore include the accounts of their majority-owned subsidiaries. All intercompany transactions have been eliminated. Ameren Missouris subsidiaries were created for the ownership of renewable generation projects. Ameren Illinois has no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.
In addition to presenting results of operations and earnings amounts in total, we present certain information in cents per share. These amounts reflect factors that directly affect Amerens earnings. We believe this per share information helps readers to understand the impact of these factors on Amerens earnings per share.
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OVERVIEW Net income attributable to Ameren common shareholders in the three months ended March 31 2022, was $252 million, or $0.97 per diluted share, compared with $233 million, or $0.91 per diluted share, in the year-ago period. Net income for the three months ended March 31 2022, ,
compared to the year-ago period, was favorably affected by increased rate base investments across all segments and a higher recognized ROE atAmeren Illinois Electric Distribution. Earnings for the three months ended March 31 2022, compared to the year-ago period, was also favorably affected by the absence in 2022 of the FERCs March 2021 order, primarily related to the historical recovery of materials and supplies inventories, and increased retail electric sales volumes at Ameren Missouri, primarily resulting from colder temperatures experienced in 2022.
Earnings for the three months ended March 31 2022, compared to the year-ago period, was unfavorably affected by increased other operations and maintenance expenses, primarily due to a reduction in the cash surrender value of company-owned life insurance and an increase due to the expiration of contracts relating to refined coal tax credits at Ameren Missouri in 2021 increased financing costs from debt issuances, and the effects of dilution.
Amerens strategic plan includes investing and operating its utilities in a manner consistent with existing regulatory frameworks, enhancing those frameworks, and advocating for responsible energy and economic policies, as well as creating and capitalizing on opportunities for investment for the benefit of its customers, shareholders, and the environment. Ameren remains focused on disciplined cost management and strategic capital allocation. Ameren invested $0.8 billion in its rate-regulated businesses in the three months ended March 31 2022. ,
The COVID-1 9 pandemic continues to affect our results of operations, financial position, and liquidity. While our electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs, were comparable to the same period in 2021 and total ,
sales volume levels were comparable to pre-pandemic levels, there has been a shift in sales volumes by customer class, which began in 2020, with an increase in residential sales, and a decrease in commercial and industrial sales. The continued effect of the COVID-1 9 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. We continue to assess the impacts the COVID-19 pandemic is having on our businesses, including impacts on electric and natural gas sales volumes, liquidity, bad debt expense, and supply chain operations. For further discussion of these and other matters discussed below, see Note 1 Summary of Significant Accounting Policies and Note 2 Rate and Regulatory Matters under Part I, Item 1 of this report, and Results of Operations, Liquidity and Capital Resources, and Outlook sections below.
In December 2021 Ameren Missouri filed a motion with the United States District Court for the Eastern District of Missouri to modify a September 2019 remedy order issued by the district court to allow the retirement ofthe Rush Island Energy Center in advance of its previously expected useful life in lieu of installing a flue gas desulfurization system. The district court is under no deadline to issue a ruling revising the remedy order. In January 2022, the MISO completed a preliminary informational assessment regarding potential impacts of the retirement to the regional electric power system, which indicated transmission upgrades and voltage support would be needed in advance of the retirement of the Rush Island Energy Center to address reliability concerns. In February 2022, Ameren Missouri formally notified the MISO of its intent to retire the Rush Island Energy Center and requested the MISO to perform a final reliability assessment, which is expected to be completed in May 2022.
The MISO must also separately approve the specific upgrades and transmission support required to address reliability concerns noted in the final assessment. Additionally, the MISO will determine whether reliability concerns require the Rush Island Energy Center to be classified as a system support resource, which should continue operating until the completion of to-be-specified transmission upgrades. If the Rush Island Energy Center were identified as a system support resource, an agreement detailing the manner of and time for continued operation would be filed with the FERC for approval. The district court has the authority to determine the retirement date and operating parameters for the Rush Island Energy Center and is not bound by the MISO determination or FERCs approval. Related to this matter, in February 2022, the MoPSC issued an order directing the MoPSC staff to review Ameren Missouris planned accelerated retirement of the Rush Island Energy Center, including potential impacts on the reliability and cost ofAmeren Missouris service to its customers, Ameren Missouris plans to mitigate the customer impacts ofthe accelerated retirement, and the prudence ofAmeren Missouris actions and decisions with regard to the Rush Island Energy Center, among other things. In April 2022, the MoPSC staff filed an initial report with the MoPSC in which the staff concluded early retirement of the Rush Island Energy Center may cause reliability concerns. The MoPSC staff is under no deadline to complete this review.
Ameren Missouri expects to seek approval from the MoPSC to finance the costs associated with the retirement, including the remaining unrecovered net plant balance associated with the facility, through the issuance of securitized utility tariff bonds pursuant to the Missouri securitization statute that became effective in August 2021 See Note 9 Commitments and Contingencies under Part I, Item I of this report for additional information.
In February 2022, Ameren Missouri filed an update to its Smart Energy Plan with the MoPSC, which includes a five-year capital investment overview with a detailed one-year plan for 2022. The plan is designed to upgrade Ameren Missouris electric infrastructure and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $8.4 billion over the five-year period from 2022 through 2026, with expenditures largely recoverable under the PISA and the RESRAM. The planned investments in 2024 through 2026 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA from December 2023 to December 2028.
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In May 2022, Senate Bill 745 passed the Missouri General Assembly and was sent to the governor for approval. If enacted, among other things, the bill would extend the PISA election through December 2028 and allow for an additional five-year extension through December 2033 if requested by Ameren Missouri and approved by the MoPSC. In addition, a 2.5% limit on customer rate increases resulting from PISA deferrals would become effective beginning in 2024. For information on the rate increase limitation effective through 2023, see Note 2 Rate and Regulatory Matters under Part II, Item 8, ofthe Form 10-K.
In January 2022, Ameren Illinois filed a request with the ICC proposing performance metrics that would be used in determining ROE incentives and penalties under an MYRR The ICC is required to issue an order on this matter by September 30, 2022.
In April 2022, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC to be used for 2023 rates, requesting an increase of $83 million. This update reflects an increase to the annual performance-based formula rate based on 2021 actual recoverable costs and expected net plant additions for 2022, an increase to include the 2021 revenue requirement reconciliation adjustment including a capital structure composed of 54% common equity, and a decrease for the conclusion of the 2020 revenue requirement reconciliation adjustment, which will be fully collected from customers in 2022, consistent with the ICCs December 2021 annual update filing order. An ICC decision in this proceeding is required by December 2022, with new rates effective in January 2023.
In April 2022, Ameren Illinois filed a revised energy-efficiency plan with the ICC to invest approximately $120 million per year in electric energy-efficiency programs through 2025, which reflects the increased level of annual investments allowed under the IETL. The ICC has the ability to reduce the amount of electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not recovered through the electric distribution service performance-based formula ratemaking framework. The ICC is under no deadline to issue an order in this proceeding.
RESULTS OF OPERATIONS Our results of operations and financial position are affected by many factors. Economic conditions, including those resulting from the COVID I 9 pandemic discussed below, energy-efficiency investments by our customers and by us, technological advances, distributed generation, and the actions of key customers can significantly affect the demand for our services. Ameren and Ameren Missouri results are also affected by seasonal fluctuations in winter heating and summer cooling demands, as well as by energy center maintenance outages. Additionally, fluctuations in interest rates and conditions in the capital and credit markets affect our cost of borrowing, and our pension and postretirement benefits costs. Almost all ofAmerens revenues are subject to state or federal regulation. This regulation has a material impact on the rates we charge customers for our services. Our results of operations, financial position, and liquidity are affected by our ability to align our overall spending, both operating and capital, with the frameworks established by our regulators. See Note 2 Rate and Regulatory Mailers under Part I, Item I ofthis report and Note 2 Rate and Regulatory Matters under Part II, Item 8, ofthe Form 10-K for additional information regarding Ameren Missouris, Ameren Illinois, and ATXIs regulatory mechanisms.
We continue to monitor the impacts of the COVID-1 9 pandemic on our businesses, including impacts on electric and natural gas sales volumes, liquidity, supply chain operations, and bad debt expense. Regarding uncollectible accounts receivable, Ameren Illinois electric distribution and natural gas distribution businesses have bad debt riders, which provide for recovery of bad debt write-offs, net of any subsequent recoveries. Ameren Missouri does not have a bad debt rider or tracker, and thus its earnings are exposed to increases in bad debt expense, absent regulatory relief. However, Ameren Missouri has not experienced and does not expect a material impact to earnings from increases in bad debt expense.
Ameren Missouri principally uses coal and enriched uranium for fuel in its electric operations and purchases natural gas for its customers.
Ameren Illinois purchases power and natural gas for its customers. The prices for these commodities can fluctuate significantly because of the global economic and political environment, weather, supply, demand, and many other factors. We have natural gas cost recovery mechanisms for our Illinois and Missouri natural gas distribution businesses, a purchased power cost recovery mechanism forAmeren Illinois electric distribution business, and a FAC forAmeren Missouris electric business.
We employ various risk management strategies to reduce our exposure to commodity risk and other risks inherent in our business. The reliability ofAmeren Missouris energy centers and our transmission and distribution systems, and the level and timing of operations and maintenance costs and capital investment, are key factors that we seek to manage in order to optimize our results of operations, financial position, and liquidity.
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Earnings Summary The following table presents a summary ofAmerens earnings for the three months ended March 31 2022 and 2021:
Three Months 2022 2021 Netincome attributable toAmeren common shareholders $ 252 $ 233 Earnings per common share diluted 0.97 0.91 Net income attributable to Ameren common shareholders increased $19 million, or 6 cents per diluted share, in the three months ended March 31 2022, compared with the year-ago period. The increase was due to net income increases of $71 million, $5 million, $3 million,
$3 million, at Ameren Transmission, Ameren Illinois Natural Gas, Ameren Missouri, and Ameren Illinois Electric Distribution, respectively. These increases were partially offset by a $3 million decrease in the net income for activity not reported as part of a segment, primarily atAmeren (parent).
Earnings per diluted share were favorably affected in the three months ended March 31 2022, compared to the year-ago period, by:
. increased rate base investments at Ameren Transmission and Ameren Illinois Electric Distribution and a higher recognized ROE due to a higher estimated annual average of the monthly yields ofthe 30-year United States Treasury bonds at Ameren Illinois Electric Distribution, which increased revenues at these segments (4 cents per share);
increased Ameren Illinois Natural Gas earnings from investments in qualifying infrastructure recovered under the QIP and higher base rates pursuant to the ICCs January 2021 natural gas rate order (3 cents per share);
I the absence in 2022 ofthe FERCs March 2021 order, primarily related to the historical recovery of materials and supplies inventories, which decreased Ameren Transmission revenues in 2021 (3 cents per share);
. increased base rate revenues for the inclusion of previously deferred interest charges pursuant to the December 2021 MoPSC electric rate order and increased deferral of interest charges related to infrastructure investments associated with the PISA and RESRAM (3 cents per share); and
. increased electric retail sales at Ameren Missouri, primarily resulting from colder temperatures experienced in 2022 (estimated at 3 cents per share).
Earnings per diluted share were unfavorably affected in the three months ended March 31 2022, compared to the year-ago period, by:
. increased other operations and maintenance expenses not subject to riders and trackers, primarily due to a reduction in the cash surrender value of company-owned life insurance and an increase due to the expiration of contracts relating to refined coal tax credits at Ameren Missouri in 2021 (8 cents per share);
. increased financing costs, primarily at Ameren (parent) and Ameren Missouri, largely due to higher long-term debt balances (2 cents per share); and
. increased weighted-average basic common shares outstanding resulting from issuances of common shares as detailed in Note 4 Long-term Debt and Equity Financings under Part I, Item 1, ofthis report, and Note 5 Long Term Debt and Equity Financings under Part II, Item 8, of the Form JO-K (1 cent per share).
The cents per share variances above are presented based on the weighted-average basic common shares outstanding in the three months ended March 31 2021 and do not reflect the impact of dilution on earnings per share, unless otherwise noted. Amounts other than variances related to income taxes have been presented net of income taxes using Amerens 2022 blended federal and state statutory tax rate of 26%. For additional details regarding the Ameren Companies results of operations, including explanations of Electric and Natural Gas Margins, Other Operations and Maintenance Expenses, Depreciation and Amortization Expenses, Taxes Other Than Income Taxes, Other Income, Net, Interest Charges, and Income Taxes, see the major headings below.
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Below is Amerens table of income statement components by segment for the three months ended March 31 2022 and 2021:
Ameren Illinois Ameren Other!
Ameren Electric lihnois Ameren Intersegment Missouri Distribution Natural Gas Transmission Eliminations Ameren Three Months 2022:
Electncrevenues $ 738 $ 465 $ $ 146 $ (31) $ 1318 Fuel (176) (176)
Purchased power (50) (151) 24 (177)
Electric margins 512 314 146 (7) 965 Naturalgasrevenues 80 481 561 Natural gas purchased for resale (46) (247) (293)
Natural gas margins 34 234 268 Other operations and maintenance expenses (232) (147) (63) (16) (3) (461)
Depreciation and amortization expenses (164) (81) (23) (30) (1) (299)
Taxes other than income taxes (85) (20) (31) (2) (4) (142)
Operating income (loss) 65 66 117 98 (15) 331 Otherincomenet 23 16 4 3 14 60 lnterestcharges (39) (18) (11) (22) (14) (104)
Income (taxes) benefit 2 (15) (30) (21) 30 (34)
Netincome 51 49 80 58 15 253 Noncontrolling interests preferred stock dividends (1) (1)
Net income attributable to Ameren common shareholders $ 50 $ 49 $ 80 $ 58 $ 15 $ 252 Three Months 2021:
Electricrevenues $ 641 $ 411 $ $ 130 $ (26) $ 1,156 Fuel (65) (65)
Purchased power (88) (122) 19 (191)
Electric margins 488 289 130 (7) 900 Naturalgasrevenues 63 347 410 Natural gas purchased for resale (31) (134) (165)
Natural gas margins 32 213 245 Other operations and maintenance expenses (225) (125) (56) (16) 2 (420)
Depreciation and amortization expenses (156) (75) (22) (28) (281)
Taxes other than income taxes (77) (20) (25) (2) (4) (128)
Operating income (loss) 62 69 110 84 (9) 316 Other income, net 23 8 3 3 9 46 Interest charges (39) (18) (10) (23) (10) (100)
Income (taxes) benefit 2 (12) (28) (17) 28 (27)
Net income 48 47 75 47 18 235 Noncontrolling interests preferred stock dividends (1) (1) (2)
Net income attributable to Ameren common shareholders $ 47 $ 46 $ 75 $ 47 $ 18 $ 233 42
Below is Ameren Illinois table of income statement components by segment for the three months ended March 31 2022 and 2021: ,
Ameren Illinois Ameren Ameren Other I Electric Illinois Illinois Intersegment Distribution Natural Gas Transmission Eliminations Ameren Illinois Three Months 2022:
Electricrevenues $ 465 $ $ 98 $ (20) $ 543 Purchased power (151) 20 (131)
Electricmargins 314 98 412 Natural gas revenues 481 481 Natural gas purchased for resale (247) .
(247)
Natural gas margins 234 234 Other operations and maintenance expenses (147) (63) (13) (223)
Depreciation and amortization expenses (81) (23) (20) (124)
Taxes other than income taxes (20) (31) (2) (53)
Operating income (loss) 66 117 63 246 Other income, net 16 4 4 24 Interest charges (18) (11) (13) (42) lncometaxes (15) (30) (14) (59)
Net income attributable to common shareholder $ 49 $ 80 $ 40 $ $ 169 Three Months 2021:
Electric revenues $ 411 $ $ 81 $ (16) $ 476 Purchased power (122) 16 (106)
Electricmargins 289 81 370 Natural gas revenues 347 347 Naturalgaspurchasedforresale (134) (134)
Naturalgasmargins 213 213 Other operations and maintenance expenses (125) (56) (13) (194)
Depreciation and amortization expenses (75) (22) (18) (115)
Taxes other than income taxes (20) (25) (1) (46)
Operating income (loss) 69 110 49 228 Other income, net 8 3 3 14 lnterestcharges (18) (10) (14) (42)
Income taxes (12) (28) (10) (50)
Net income 47 75 28 ISO Preferred stock dividends (1) (1)
Net income attributable to common shareholder $ 46 $ 75 $ 28 $ $ 149 Electric and Natural Gas Margins Electric margins are defined as electric revenues less fuel and purchased power costs. Natural gas margins are defined as natural gas revenues less natural gas purchased for resale. We consider electric and natural gas margins useful measures to analyze the change in profitability of our electric and natural gas operations between periods. We have included the analysis below to complement the financial information we provide in accordance with GAAP. However, these margins may not be a presentation defined under GAAF and they may not be comparable to other companies presentations or more useful than the GAAP information we provide elsewhere in this report.
43
Electric Margins Increase by Segment Total by Segment(a) Overall Ameren Increase of $65 Million
$1,000 $965 $30
$900
$20 U,
$500
$10
$0 $0 2022 2021 (a) Includes otherlintersegment eliminations of $(7) miNion and $(7) million in the three months ended Match 31, 2022 and 2021, respectively.
Ameren Ameren Other/Intersegment Missouri Ameren Illinois Electric Distribution Transmission Eliminations Natural Gas Margins Increase by Segment Total by Segment Overall Ameren Increase of $23 Million
$300 $25
$250
$20
$200 U, $15 0
$150
$100
$50
- $2
$0 $0 Ameren Missouri Ameren Illinois Natural Gas 44
The following tables present the favorable (unfavorable) variations by Ameren segment for electric and natural gas margins for the three months ended Match 31 2022, compared with the year-ago period:
Electric and Natural Gas Margins Ameren Illinois Ameren Other Ameren Electric Illinois Ameren Ilntersegment Three Months Missouri Distribution Natural Gas Transmission(aj Eliminations Ameren Electric revenue change:
Effect of weather (estimate)(b) $ 7 $ $ $ $ $ 7 Base rates (estimate)fc) 18 19 16 53 Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA) 4 4 Off-system sales, capacity, and FAC revenues, net 52 52 Ameren Illinois energy-efficiency program investment revenues 3 3 Other (1) (1)
Cost recovery mechanisms offset in fuel and purchased power(d) 24 29 (5) 48 Other cost recovery mechanisms(e) (7) 3 (4)
Total electric revenue change $ 97 $ 54 $ $ I6 $ (5) $ I 62 Fuel and purchased power change:
Energy costs (excluding the estimated effect ofweather) $ (47) $ $ $ $ $ (47)
Effect ofweather (estimate) (1) (1)
Effect of higher net energy costs included in base rates (1) (1)
Cost recovery mechanisms offset in electric revenuetd)
(24) (29) 5 (48)
Total fuel and purchased power change $ (73) $ (29) $ $ $ 5 $ (97)
Net change in electric margins $ 24 $ 25 $ $ 16 $ $ 65 Natural gas revenue change:
Base rates (estimate) $ I $ $ 3 $ $ $ 4 Change in rate design I I QlPrider 9 9 Other 2 2 Cost recovery mechanisms offset in natural gas purchased for resale(d) 15 113 128 Other cost recovery mechanisms(e) I 6 7 Total natural gas revenue change $ 17 $ $ 134 $ $ $ 151 Natural gas purchased for resale change:
Cost recovery mechanisms offsetin natural gas revenue(d) $ (15) $ $ (113) $ $ $ (128)
Total natural gas purchased for resale change $ (1 5) $ $ (113) $ $ $ (128)
Net change in natural gas margins $ 2 $ $ 21 $ $ $ 23 (a) Includes an increase in transmission margins of$17 million atAmeren Illinois forthe three months ended March 31, 2022, compared with the year-ago period.
(b) Represents the estimated variation resulting primarily from changes in cooling and heating degree-days on electric and natural gas demand compared with the year-ago period; this variation is based on temperature readings from the National Oceanic and AtmosphericAdministration weather stations at local airports in our service territories.
(c) ForAmeren Illinois Electric Distribution and Ameren Transmission, base rates include increases or decreases to operating revenues related to the revenue requirement reconciliation adjustment under formula rates. ForAmeren Missouri, base rates exclude an increase for the recovery of lost electric margins resulting from the MEEIA customer energy-efficiency programs and an increase in base rates for RESRAM. These changes in base rates are included in the Sales volumes and changes in customer usage patterns (excluding the estimated effects ofweather and MEEIA) and Cost recovery mechanisms line items, respectively.
(d) Electric and natural gas revenue changes are offset by corresponding changes in Fuel, Purchased power and Natural gas purchased for resale on the statement of income, resulting in no change to electric and natural gas margins. Activity in Other/Intersegment Eliminations represents the elimination of related-party transactions between Ameren Missouri, Ameren Illinois, and ATXI, as well as Ameren Transmission revenue from transmission services provided to Ameren Illinois Electric Distribution. See Note 8 Related-party Transactions and Note 14 Segment Information under Part I, Item 1, ofthis report for additional information on intersegment eliminations.
(e) Offsetting expense increases or decreases are reflected in Other operations and maintenance, Depreciation and amortization, or in Taxes other than income taxes, within the Operating Expenses section and Income Taxes in the statement of income. These items have no overall impact on earnings.
45
Ameren Amerens electric margins increased $65 million, or 7%, for the three months ended March 31 2022, compared with the year-ago period, due to increased margins at Ameren Missouri, Ameren Illinois Electric Distribution, and Ameren Transmission, as discussed below. Amerens natural gas margins increased $23 million, or 9%, for the three months ended March 31 2022, compared with the year-ago period, primarily because of increased margins at Ameren Illinois Natural Gas, as discussed below.
Ameren Transmission Ameren Transmissions margins increased $16 million, or 12%, for the three months ended March 31 2022, compared with the year-ago period. Base rate revenues were favorably affected by the absence in 2022 ofthe FERCs March 2021 order (+$7 million), increased capital investment, as evidenced by a 10% increase in rate base used to calculate the revenue requirement (+$5 million), and higher recoverable expenses (+$4 million). See Transmission Formula Rate Revisions in Note 2 Rate and Regulatory Matters under Part I, Item I of this report for additional information regarding the March 2021 FERC order.
Ameren Missouri Ameren Missouris electric margins increased $24 million, or 5%, for the three months ended March 31 2022, compared with the year-ago period. Revenues associated with Cost recovery mechanisms offset in fuel and purchased power increased $24 million for the three months ended March 31 2022. The increased revenues are fully offset by an increase in fuel and purchased power costs, which increased primarily due to 2022 amortization of costs previously deferred under the FAC. The changes to Cost recovery mechanisms offset in fuel and purchased power are fully offset by Cost recovery mechanisms offset in electric revenue, in the table above, and result in no impact to margins. Ameren Missouris 5% exposure to net energy cost variances under the FAC is reflected within Off-system sales, capacity, and FAC revenues, net and Energy costs (excluding the estimated effect of weather).
The following items had a favorable effect on Ameren Missouris electric margins between periods:
S The December 2021 MoPSC electric rate order effective February 28, 2022, that resulted in higher electric base rates, excluding the change in base rates for the MEEIA customer energy efficiency programs and the RESRAM, partially offset by higher net energy costs included in base rates, increased margins $1 7 million. The change in electric base rates is the sum of the change in Base rates (estimate) (-t-$1 8 million) and the Effect of higher net energy costs included in base rates (-$1 million) in the table above.
. Wnter temperatures were colder as heating degree days increased I % for the three months ended March 31 2022. The aggregate effect of weather increased margins an estimated $6 million. The change in margins due to weather is the sum of the Effect of weather (estimate) on electric revenues (+$7 million) and the Effect of weather (estimate) on fuel and purchased power (-$1 million) in the table above.
. Lower net energy costs increased margins $5 million. In 2021 the absence of the Callaway Energy Center generation and the significant increase in cost and customer demand caused by the extremely cold weather in February 2021 drove higher net energy costs resulting from Ameren Missouris 5% exposure to net energy cost variances from base rates under the FAC. The change in net energy costs is the sum of 0ff-system sales, capacity and FAC revenues, net (+$52 million) and Energy costs (excluding the estimated effect of weather) (-$47 million) in the table above.
. Excluding the estimated effects of weather and the MEEIA customer energy-efficiency programs, electric revenues increased an estimated
$4 million. The increase was primarily due to an increase in the average retail price per kilowafihour due to changes in customer usage patterns and shifts in commercial and industrial usage within rate classes.
Ameren Missouris other cost recovery mechanisms decreased margins $7 million primarily due to a reduction of recoverable MEEIA program costs.
Ameren Missouris natural gas margins were comparable between periods. Purchased gas costs increased $1 5 million due to 2022 amortization of natural gas costs previously deferred under the PGA, driven by a significant increase in cost and customer demand as result of the extremely cold weather in February 2021 partially offset by lower natural gas prices in 2022. The increased purchased natural gas costs are fully offset by an increase in natural gas revenues under the PGA rider, resulting in no impact to margin. The increase in purchased natural gas cost is reflected in Cost recovery mechanisms offset in natural gas revenue and the associated recoverability from customers is reflected in Cost recovery mechanisms offset in natural gas purchased for resale in the table above.
Ameren Illinois Ameren Illinois electric margins increased $42 million, or 11%, for the three months ended March 31 2022, compared with the year-ago period, driven by increased margins at Ameren Illinois Electric Distribution and Ameren Illinois Transmission. Ameren Illinois Natural Gas margins increased $21 million, or 10%, for the three months ended March 31 2022, compared with the year-ago period.
46
Ameren Illinois Electric Distribution Ameren Illinois Electric Distributions margins increased $25 million, or 9%, for the three months ended March 31 2022, compared with the year-ago period. Purchased power costs increased $29 million for the three months ended March 31 2022, primarily resulting from higher electric prices. The increased purchased power costs are fully offset by an increase in electric revenues under the cost recovery mechanisms for purchased power, resulting in no impact to margin. The increase in purchased power cost is reflected in Cost recovery mechanisms offset in electric revenue and the associated recoverability from customers is reflected in Cost recovery mechanisms offset in fuel and purchased power in the table above.
The following items had a favorable effect on Ameren Illinois Electric Distributions margins between periods:
. Base rates increased due to a higher recognized ROE (+$2 million), as evidenced by an increase of 29 basis points in the estimated annual average ofthe monthly yields of the 30-year United States Treasury bonds, increased capital investment (+$2 million), as evidenced by a 6%
increase in rate base used to calculate the revenue requirement, and higher recoverable non-purchased power expenses (+$19 million),
partially offset by the absence in 2022 of revenue requirement reconciliation adjustment true-ups (-$4 million). The sum of these changes collectively increased margins $19 million.
. Revenues increased $3 million due to the recovery of and return on increased energy-efficiency program investments under performance-based formula ratemaking.
Ameren Illinois Natural Gas Ameren Illinois Natural Gas margins increased $21 million, or 10%, forthe three months ended March 31, 2022, compared with the year-ago period. Purchased gas costs increased $113 million for the three months ended March 31 2022, due to 2022 amortization of natural gas costs previously deferred under the PGA, driven by a significant increase in cost and customer demand as a result of the extremely cold weather in February 2021 partially offset by lower natural gas costs in 2022. The increased purchased natural gas costs are fully offset by an increase in natural gas revenues under the PGA rider, resulting in no impact to margin. The increase in purchased natural gas cost is reflected in Cost recovery mechanisms offset in natural gas revenue and the associated recoverability from customers is reflected in Cost recovery mechanisms offset in natural gas purchased for resale in the table above.
The following items had a favorable effect on Ameren Illinois Natural Gas margins between periods:
. Revenues increased $9 million due to additional investment in qualified natural gas infrastructure under the QIR a Other cost recovery mechanisms increased revenues $6 million, primarily due to increased revenues for excise taxes.
. Revenues increased $3 million during January 2022 due to higher natural gas base rates as a result of the January 2021 natural gas rate order.
Ameten Illinois Transmission Ameren Illinois Transmissions margins increased $1 7 million, or 21 %, for the three months ended March 31 , 2022, compared with the year-ago period. Base rate revenues were favorably affected by the absence in 2022 of the FERCs March 2021 order (--$7 million), increased capital investment (+$5 million), as evidenced by a 16% increase in rate base used to calculate the revenue requirement, and higher recoverable expenses (+$5 million). See Transmission Formula Rate Revisions in Note 2 Rate and Regulatory Matters under Part I, Item I , of this report for additional information regarding the March 2021 FERC order.
47
Other Operations and Maintenance Expenses Increase by Segment Total by Segment(a) Overall Ameren Increase of $41 Million
$500 $25
$461
$22
$400 -1 ; $20
$300 $15 (I
C 0
$200 I $10 j
$100 2022 2021 (a) Includes other/intersegment eliminations of$3 million and $(2) million in the three months ended March 31, 2022 and 2021, respectively.
Ameren Missouri Ameren Illinois Natural Gas Other/Intersegment Eliminations I Ameren Illinois Electric Distribution Ameren Transmission Ameren Other operations and maintenance expenses increased $41 million in the three months ended March 31 2022, compared with the year-ago period. In addition to changes by segments discussed below, other operations and maintenance expenses increased $5 million for activity not reported as part of a segment, as reflected in Other/lntersegment Eliminations above, primarily because of increased costs for support services.
Ameren Transmission Other operations and maintenance expenses were comparable between periods.
Ameren Missouri The $7 million increase in other operations and maintenance in the three months ended March 31 2022, compared with the year-ago period, was primarily due to the following items:
. The absence in 2022 of $6 million service fees received from third parties under refined coal production agreements, as the result of the expiration of refined coal tax credits at the end of 2021.
. The cash surrender value of company-owned life insurance decreased $6 million, primarily because of unfavorable market returns in 2022.
I The absence of a $5 million deferral to a regulatory asset of certain costs previously incurred related to the COVID-1 9 pandemic, pursuant to the March 2021 MoPSC orders.
S Energy center operating costs, increased $3 million, primarily because of costs related to new wind generation facilities, which are recovered underthe RESRAM.
48
The above increases were partially offset by a $1 3 million decrease in MEEIA customer energy-efficiency program spend as approved by the MoPSC, compared with the year-ago period.
Ameren Illinois Other operations and maintenance expenses increased $29 million in the three months ended March 31 2022, compared with the year-ago period, as discussed below. Other operations and maintenance expenses were comparable between periods at Ameren Illinois Transmission.
Ameren Illinois Electric Distribution The $22 million increase in other operations and maintenance expenses in the three months ended March 31 2022, compared with the year-ago period, was primarily due to the following items:
Distribution system expenditures increased $1 0 million, primarily because of projects deferred in 2021 as a result of storm restoration efforts that were deferred as a regulatory asset in 2021.
e Increased bad debt expense of $5 million, primarily because of increased recovery of bad debt costs allowed by the ICC.
. The cash surrender value of company-owned life insurance decreased $3 million, primarily because of unfavorable market returns in 2022.
I Amortization of regulatory assets associated with customer energy-efficiency program investments under formula ratemaking increased
$2 million.
Ameren Illinois Natural Gas Other operations and maintenance expenses increased $7 million in the three months ended March 31 2022, compared with the year-ago period, primarily because of a $4 million increase in distribution system expenditures, related to higher labor and contract service costs. Other operations and maintenance expenses also increased $2 million, primarily because of a decrease in the cash surrender value of company-owned life insurance because of unfavorable market returns in 2022. These increases were partially offset by a $2 million reduction in costs recovered through riders.
49
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Taxes Other Than Income Taxes Increase by Segment Total by Segment(a) OverallAmeren Increase of$14 Million
$160 $10
$142
$8
$120 0
$6 0
- so
$4
$40
$2
$0 $0 I $ $
2022 2021 (a) Includes $2 million and $2 million atAmeren Transmission in the three months ended March 31, 2022 and 2021, respectively, and other/intersegmenteliminations of$4 million and $4 million in the three months ended March 31, 2022 and 2021, respectively.
I Ameren Missouri Arneren Illinois Natural Other/Intersegment Eliminations
. Ameren Illinois Electric Distribution Ameren Transmission Taxes other than income taxes increased $14 million in the three months ended March 31 2022, compared with the year-ago period, primarily because of $6 million and $3 million increases in excise taxes at Ameren Illinois Natural Gas and Ameren Missouri, respectively, primarily because of increased sales. Taxes other than income taxes also increased $4 million at Ameren Missouri because of increased property taxes, primarily resulting from property tax refunds received in 2021.
51
Other Income, Net Increase by Segment Total by Segmentfa) Overall Ameren Increase of $14 Million
$70 $10
$60
$60 $8
$8
$50
$46
$6 0
$3o
$4
$20
$10 1 I
$2 I
$0 $0 2022 2021 Ameren Missouri Ameren Illinois Natural Gas Other/Intersegment Eliminations Ameren Illinois Electric Ameren Transmission I Distnbution Other income, net, increased $14 miNion in the three months ended March 31 2022, compared with the year-ago period, primarily because of increases in the non-service cost component of net periodic benefit income of $5 million, $4 million, and $2 million forAmeren Illinois Electric Distribution, activity not reported as part of a segment, and Ameren Illinois Natural Gas, respectively.
See Note 5 Other Income, Net, under Part I, Item I ofthis report for additional information. See Note I I Retirement Benefits under Part I, Item I of this report for more information on the non-service cost components of net periodic benefit income.
52
Interest Charges Increase (Decrease) by Segment Total by Segment Overall Ameren Increase of $4 Million
$125 $6
$104
$100
$100
$4 T75
$2
$1 O
$0
$i)
$(2) 2022 2021 Ameren Missouri Ameren Illinois Natural Gas Other/Intersegment Eliminations P
. Ameren Illinois Electric Distribution Ameren Transmission Interest charges increased $4 million in the three months ended March 31 2022, compared wfth the year-ago period, primarily because of issuances of long-term debt at Ameren (parent) in March and November of 2021 . Interest charges at Ameren and Ameren Missouri reflected a deferral to a regulatory asset of interest charges pursuant to PISA and RESRAM. The PISA and RESRAM deferrals of interest charges were $18 million and $1 5 million for the three months ended March 31 2022 and 2021 respectively. A reduction in nterest charges related to the increase in PISA and RESRAM deferrals atAmeren Missouri was offset by the issuance of long-term debt atAmeren Missouri in June 2021 which increased interest charges by $3 million. The amount of interest charges included in base rates for PISA and RESRAM deferrals was updated when new customer rates became effective on February 28, 2022, pursuant to the December 2021 MoPSC electric rate order, which incorporated deferrals through September 30, 2021.
Income Taxes The following table presents effective income tax rates for the three months ended March 31 2022 and 2021: ,
Three Monthst 2022 2021 Ameren 12% 10%
Ameren Missouri (4)% (4)%
Ameren Illinois 26 % 25 %
Ameren Illinois Electric Distribution 24 % 22 %
Ameren Illinois Natural Gas 27 % 27 %
Ameren Illinois Transmission 26 % 25 %
Ameren Transmission 27 % 27 %
(a) Estimate ofthe annual effective income tax rate adjusted to reflectthe tax effect of items discrete to the three months ended March 31, 2022 and 2021.
See Note 12 Income Taxes under Part I, Item I ofthis report for a reconciliation ofthe federal statutory corporate income tax rate to the effective income tax rate for the Ameren Companies.
The effective income tax rate was higher at Ameren Illinois Electric Distribution in the three months ended March 31 2022, compared with ,
the year-ago period, primarily because of lower amortization of excess deferred taxes.
53
LIQUIDITYAND CAPITAL RESOURCES Collections from our tariff-based revenues are our principal source of cash provided by operating activities. A diversified retail customer mix, primarily consisting of rate-regulated residential, commercial, and industrial customers, provides us with a reasonably predictable source of cash.
In addition to using cash provided by operating activities, we use available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case ofAmeren Missouri and Ameren Illinois, short-term affiliate borrowings to support normal operations and temporary capital requirements. We may reduce our short-term borrowings with cash provided by operations or, at our discretion, with long-term borrowings, or, in the case ofAmeren Missouri and Ameren Illinois, with capital contributions from Ameren (parent). As of March 31 2022, there ,
have been no material changes other than in the ordinary course of business related to cash requirements arising from these long-term commitments provided in Item 7 of the Form I 0-K for the year ended December 31 2021. ,
We expect to make significant capital expenditures over the next five years, supported by a combination of long-term debt and equity, as we invest in our electric and natural gas utility infrastructure to support overall system reliability, grid modernization, renewable energy target requirements, environmental compliance, and other improvements. For additional information about our long-term debt outstanding, including maturities due within one year, and the applicable interest rates, see Note 5 Long-term Debt and Equity Financings under Part II, Item 8 of the Form I 0-K and Note 4 Long-term Debt and Equity Financings under Part I, Item I of this report. As part of its funding plan for capital expenditures, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2026. Ameren expects these issuances to provide equity of about $100 million annually. In addition, in 2021 Ameren established an ATM program under which Ameren may offer and sell from time to time up to $750 million of its common stock, which includes the ability to enter into forward sales agreements, subject to market conditions and other factors. There were no shares issued under the ATM program for the three months ended March 31 2022. Ameren has entered into multiple forward sale agreements under the ATM program with various counterparties relating to 3.4 million shares of common stock. Ameren expects to settle the forward sale agreements by December 31 2022. Ameren plans to issue approximately $300 million of equity each year from 2022 to 2026 in addition to issuances under the DRPlus and employee benefit plans. Ameren expects its equity to total capitalization ratio to be approximately 45% through December 31 2026, with the long-term intent to support solid investment-grade credit ratings. See Long-term Debt and Equity below and Note 4 Long-term Debt and Equity Financings under Part I, Item I ofthis report for additional information on the ATM program, including the forward sale agreements under the ATM program relating to common stock.
The use of cash provided by operating activities and short-term borrowings to fund capital expenditures and other long-term investments at the Ameren Companies frequently results in a working capital deficit, defined as current liabilities exceeding current assets, as was the case at March 31 2022, for Ameren, Ameren Missouri, and Ameren Illinois. Wth the credit capacity available under the Credit Agreements, and cash and cash equivalents, Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, had net available liquidity of $1 .2 billion at March 31, 2022. See Credit Facility Borrowings and Liquidity for additional information.
The following table presents net cash provided by (used in) operating, investing, and financing activities for the three months ended March 31, 2022 and 2021:
Net Cash Provided By (Used In) Net Cash Used In Net Cash Provided By Operating Activities Investing Activities Financing Activities 2022 2021 Variance 2022 2021 Variance 2022 2021 Variance Ameren $ 388 $ (35) $ 423 $ (780) $ (889) $ 109 $ 391 $ 795 $ (404)
Ameren Missouri 56 (51) 107 (417) (398) (19) 362 316 46 Ameren Illinois 342 13 329 (342) (337) (5) 4 326 (322)
Cash Flows from Operating Activities Our cash provided by operating activities is affected by fluctuations of trade accounts receivable, inventories, and accounts and wages payable, among other things, as well as the unique regulatory environment for each of our businesses. Substantially all expenditures related to fuel, purchased power, and natural gas purchased for resale are recovered from customers through rate adjustment mechanisms, which may be adjusted without a traditional rate proceeding. Similar regulatory mechanisms exist for certain other operating expenses that can also affect the timing of cash provided by operating activities. The timing of cash payments for costs recoverable under our regulatory mechanisms differs from the recovery period of those costs. Additionally, the seasonality of our electric and natural gas businesses, primarily caused by seasonal customer rates and changes in customer demand due to weather, such as increased demand resulting from the extremely cold weather in mid-February 2021 significantly affects the amount and timing of our cash provided by operating activities.
54
Ameren Amerens cash provided by operating activities increased $423 million in the first three months of 2022, compared with the year-ago period.
The following items contributed to the increase:
. A $471 million increase resulting from increased customer collections and decreased expenditures under the PGA and FAC, primarily as a result of the significant increase from customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather and a net increase attributable to other regulatory recover mechanisms. See Outlook below for additional information about the extension of the collection period for the PGA related to the extremely cold weather in mid-February 2021.
. A $41 million decrease in the cost of natural gas held in storage, primarily at Ameren Illinois, because of higher prices as a result of extremely cold winterweather in mid-February 2021.
. A $15 million decrease in major storm restoration costs atAmeren Illinois, primarily due to a January 2021 storm.
The following items partially offset the increase in Amerens cash from operating activities between periods:
S A $25 million increase in net collateral posted with counterparties, primarily due to changes in the market prices of power, natural gas, and other fuels.
I A $1 5 million increase in interest payments, primarily due to an increase in the average outstanding debt.
. A $14 million decrease resulting from an increase in coal inventory levels atAmeren Missouri, as less coal was purchased in 2021 due to service-related delivery disruptions.
. A $12 million increase in property tax payments at Ameren Missouri, primarily due to higher assessed property tax values.
p A $1 0 million increase in payments for certain cloud computing arrangements.
Ameren Missouri Ameren Missouris cash provided by operating activities increased $1 07 million in the first three months of 2022, compared with the year-ago period, primarily as a result of a $1 81 million increase from higher customer collections and decreased expenditures under the FAC and PGA due to the significant increase from customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and a net increase attributable to other regulatory recovery mechanisms. See Outlook below for additional information about the extension ofthe collection period for the PGA related to the extremely cold weather in mid-February 2021.
The following items partially offset the increase in Ameren Missouris cash from operating activities between periods:
. A $33 million increase in net collateral posted with counterparties, primarily due to changes in the market prices of power, natural gas, and other fuels.
. A $14 million decrease resulting from an increase in coal inventory levels, as less coal was purchased in 2021 due to service-related delivery disruptions.
. A $12 million increase in property tax payments, primarily due to higher assessed property tax values.
. A $9 million increase in interest payments, primarily due to an increase in the average outstanding debt.
. A $7 million increase in payments for certain cloud computing arrangements.
Ameren Illinois Ameren Illinois cash provided by operating activities increased $329 million in the first three months of 2022, compared with the year-ago period. The following items contributed to the increase:
. A $289 million increase resulting from increased customer collections and decreased expenditures under the PGA, primarily as a result of the significant increase from customer demand and prices for natural gas and electricity experienced in mid-February due to extremely cold weather and a net increase attributable to other regulatory recover mechanisms. See Outlook below for additional information about the extension of the collection period for the PGA related to the extremely cold weather in mid-February 2021.
I A $39 million decrease in the cost of natural gas held in storage because of higher prices as a result of extremely cold winter weather in mid-February 2021.
. A $1 5 million decrease in major storm restoration costs, primarily due to a January 2021 storm.
. An $8 million increase in net collateral received from counterparties, primarily due to changes in the market prices of natural gas.
The increase in Ameren Illinois cash from operating activities between periods was partially offset by an $8 million increase in payments for certain cloud computing arrangements.
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Cash Flows from Investing Activities Amerens cash used in investing activities decreased $109 million during the first three months of 2022, compared with the year-ago period, primarily as a result of a $1 13 million decrease in capital expenditures, largely resulting from a reduction in expenditures related to wind generation assets at Ameren Missouri, and $1 7 million in insurance proceeds for the Callaway Energy Centers generator. The decrease in Amerens cash used in investing activities was partially offset by a $15 million increase due to the timing of nuclear fuel expenditures at Ameren Missouri.
Ameren Missouris cash used in investing activities increased $19 million during the firstthree months of2022, compared with the year-ago period, primarily as a result of a $139 million return of net money pool advances in the year-ago period, and a $1 5 million increase due to the timing of nuclear fuel expenditures. This increase was partially offset by a $120 million decrease in capital expenditures, primarily resulting from a reduction in expenditures related to wind generation assets, and $17 million in insurance proceeds for the Callaway Energy Centers generator.
Ameren Illinois cash used in investing activities increased $5 million during the first three months of 2022, compared with the year-ago period, as a result of a $5 million increase in capital expenditures.
Cash Flows from Financing Activities Cash provided by, or used in, financing activities is a result of our financing needs, which depend on the level of cash provided by operating activities, the level of cash used in investing activities, the level of dividends, and our long-term debt maturities, among other things. Due to extremely cold winterweather in mid-February 2021 Ameren Missouri and Ameren Illinois experienced higherthan anticipated commodity costs for natural gas purchased for resale and purchased power, which contributed to the acceleration of the timing of certain planned 2021 debt issuances.
Amerens cash provided by consolidated financing activities decreased $404 million during the first three months of 2022, compared with the year-ago period. During the first three months of 2022, Ameren utilized proceeds from net commercial paper issuances of $555 million along with cash provided by operating activities to fund, in part, investing activities. In addition, Ameren received aggregate cash proceeds of $5 million from the issuance of common stock under the DRPlus and the 401(k) plan. In comparison, during the first three months of 2021 Ameren utilized proceeds from the issuance of $450 million of long-term debt for general corporate purposes, including to repay then-outstanding short-term debt, and to fund, in part, investing activities. Ameren also utilized proceeds from net commercial paper issuances of $399 million and cash on hand to fund operating activities, including increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. In addition, Ameren received aggregate cash proceeds of$125 million from the settlement ofthe remaining portion of the forward sale agreement of common stock and the issuance of common stock under the DRPIus and the 401 (k) plan. During the firstthree months of2022, Ameren paid common stock dividends of$152 million, compared with $140 million in the year-ago period, as a result of an increase in both the dividend rate and the number of common shares outstanding.
Ameren Missouris cash provided by financing activities increased $46 million during the first three months of 2022, compared with the year-ago period. During the first three months of 2022, Ameren Missouri utilized proceeds from net commercial paper issuances of $363 million and cash provided by operating activities to fund, in part, investing activities. In comparison, during the first three months of 2021 Ameren Missouri utilized proceeds from net commercial paper issuances of $204 million and cash on hand to fund operating activities, including increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. In addition, Ameren Missouri received a $1 I 3 million capital contribution from Ameren (parent) during the first three months of 2021.
Ameren Illinois cash provided by financing activities decreased $322 million during the first three months of 2022, compared with the year-ago period. During the first three months of 2021 Ameren Illinois utilized proceeds from net commercial paper issuances of $323 million to fund operating activities, including increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. Ameren Illinois also received a $40 million capital contribution from Ameren (parent) during the first three months of 2021 In addition, Ameren repaid $19 million of money pool borrowings and redeemed $13 million of preferred stock during the firstthree months of 2021.
See Long-term Debt and Equity in this section for additional information on maturities and issuances of long-term debt, issuances of common stock, and redemptions of preferred stock.
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Credit Facility Borrowings and Liquidity The following table presents Amerens consolidated liquidity as of March 31 2022:
Available at March 31, 2022 Ameren (parent) and Ameren Missouri:
Missouri creditAgreement borrowing capacity
$ 1200 Less: Ameren (parent) commercial paper outstanding 300 Less: Ameren Missouri commercial paper outstanding 528 Less: Ameren Missouri letters of credit 2 Missouri Credit Agreement subtotal 370 Ameren (parent) and Ameren Illinois:
Illinois CreditAgreement borrowing capacity 1,100 Less: Ameren (parent) commercial paper outstanding I 66 Less: Ameren Illinois commercial paper outstanding 107 Illinois CreditAgreement subtotal 827 Subtotal $ 1,197 A&LCashandcasqjvjent Net Available Liquidityiai $ 1,204 (a) Does not include Amerens forward equity sale agreements. See Note 4 Long-term Debt and Equity Financings under Part I, Item 1 of this report for additional information.
The Credit Agreements, among other things, provide $2.3 billion of credit until maturity in December 2025. See Note 3 Short-term Debt and Liquidity under Part I, Item 1 of this report for additional information on the Credit Agreements. During the three months ended March 31, 2022, Ameren (parent), Ameren Missouri, and Ameren Illinois each issued commercial paper. Borrowings under the Credit Agreements and commercial paper issuances are based upon available interest rates at that time of the borrowing or issuance.
Ameren has a money pool agreement with and among its utility subsidiaries to coordinate and to provide for certain short-term cash and working capital requirements. As short-term capital needs arise, and based on availability of funding sources, Ameren Missouri and Ameren Illinois will access funds from the utility money pool, the Credit Agreements, or the commercial paper programs depending on which option has the lowest interest rates.
See Note 3 Short-term Debt and Liquidity under Part I, Item 1 of this report for additional information on credit agreements, commercial paper issuances, Amerens money pool arrangements and related borrowings, and relevant interest rates.
The issuance of short-term debt securities by Amerens utility subsidiaries is subject to FERC approval under the Federal Power Act. In March 2022, the FERC issued an order authorizing Ameren Missouri to issue up to $7 billion of short-term debt securities through March 2024.
In 2020, the FERC issued an order authorizing Ameren Illinois to issue up to $1 billion of short-term debt securities through September 2022. In 2021 the FERC issued an order authorizing ATXI to issue up to $300 million of short-term debt securities, which expires in July 2023.
The Ameren Companies continually evaluate the adequacy and appropriateness of their liquidity arrangements for changing business conditions. When business conditions warrant, changes may be made to existing credit agreements or to other borrowing arrangements, or other arrangements may be made.
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Long-term Debt and Equity The following table presents Amerens issuances (net of any issuance premiums or discounts) of long-term debt and equity, redemptions of preferred stock for the three months ended March 31 2022 and 2021 I ,
Month Issued, Redeemed, or Matured 2022 2021 Issuances of Long-term Debt Ameren:
1.75% Senior unsecured notes due 2028 March $ $ 450 Total Ameren long-term debt issuances $ S 450 Issuances of Common Stock Ameren:
DRPIus and 401(k) (a) Various $ 5 fb)
$ 12 August 2019 forward sale agreement (C) February 113 Total Ameren common stock issuances (U) $ 5 $ I 25 Redemptions of Preferred Stock Ameren Illinois:
6.625% Series March $ $ 12 7.75% Series -
March 1 Total Ameren Illinois preferred stock redemptions $ $ 13 (a) Ameren issued a total ofO.1 million and 0.1 million shares olcommon stock under its DRPlus and 401(k) plan in the three months ended March 31, 2022 and 2021, respectively.
(b) Excludes an $8 million receivable at March 31, 2022.
(c) Ameren issued 1 .6 million shares of common stock to settle the remainder of the August 201 9 forward sale agreement.
(d) Excludes 0.4 million and 0.5 million shares of common stock valued at $31 million and $33 million issued for no cash consideration in connection with stock-based compensation forthe three months ended March 31, 2022 and 2021, respectively.
See Note 4 Long-term Debt and Equity Financings under Part I, Item I ofthis report for additional information, including proceeds from issuances of long-term debt, including Ameren Missouris April 2022 issuance of first mortgage bonds, the use of those proceeds, Amerens forward equity sale agreements, and the ATM program.
Indebtedness Provisions and Other Covenants At March 31 2022, the Ameren Companies were in compliance with the provisions and covenants contained in their credit agreements, indentures, and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreements. See Note 3 Short-term Debt and Liquidity under Part I, Item I ofthis report and Note 4 Short-term Debt and Liquidity and Note 5 Long-term Debt and Equity Financings under Part II, Item 8, ofthe Form 10-K for a discussion of provisions, applicable cross-default provisions, and covenants contained in our credit agreements, in ATXIs note purchase agreements, and in certain of the Ameren Companies indentures and articles of incorporation.
We consider access to short-term and long-term capital markets to be a significant source of funding for capital requirements not satisfied by cash provided by our operating activities. Inability to raise capital on reasonable terms, particularly during times of uncertainty in the capital markets, could negatively affect our ability to maintain and expand our businesses. After assessing its current operating performance, liquidity, and credit ratings (see Credit Ratings below), Ameren, Ameren Missouri, and Ameren Illinois each believes that it will continue to have access to the capital markets on reasonable terms. However, events beyond Amerens, Ameren Missouris, and Ameren Illinois control may create uncertainty in the capital markets or make access to the capital markets uncertain or limited. Such events could increase our cost of capital and adversely affect our ability to access the capital markets.
Dividends The amount and timing of dividends payable on Amerens common stock are within the sole discretion ofAmerens board of directors.
Amerens board of directors has not set specific targets or payout parameters when declaring common stock dividends, but it considers various factors, including Amerens overall payout ratio, payout ratios of our peers, projected cash flow and potential future cash flow requirements, historical earnings and cash flow, projected earnings, impacts of regulatory orders or legislation, and other key business considerations. Ameren expects its dividend payout ratio to be between 55% and 70% of annual earnings over the next few years.
See Note 4 Short-term Debt and Liquidity and Note 5 Long-term Debt and Equity Financings under Part II, Item 8, ofthe Form JO-K for additional discussion of covenants and provisions contained in certain of the Ameren Companies financial agreements and articles of incorporation that would restrict the Ameren Companies payment of dividends in certain circumstances. At March 3J 2022, none of these ,
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circumstances existed atAmeren, Ameren Missouri, orAmeren Illinois and, as a result, these companies were not restricted from paying dividends.
The following table presents common stock dividends declared and paid by Ameren Corporation to its common shareholders and by Ameren subsidiaries to their parent, Ameren Corporation, for the three months ended March 31 2022 and 2021:
Three Months 2022 2021 Ameren $ 152 $ 140 ATXI - -- 25 Credit Ratings Our credit ratings affect our liquidity, our access to the capital markets and credit markets, our cost of borrowing under our credit facilities and our commercial paper programs, and our collateral posting requirements under commodity contracts.
The following table presents the principal credit ratings by Moodys and S&P, as applicable, effective on the date of this report:
Moodys S&P Ameren:
Issuer/corporate credit rating Gaal BBB+
Seniorunsecureddebt Baal BBS commercial paper P-2 A-2 Ameren Missouri:
Issuer/corporate credit rating Baal 555+
Secured debt A2 A Senior unsecured debt Baal Not Rated commercial paper P-2 A-2 Ameren Illinois:
Issuer/corporate credit rating A3 555+
Secured debt Al A Senior unsecured debt A3 555+
Commercial paper P-2 A-2 ATXI:
Issuer credit rating A2 Not Rated Senior unsecured debt A2 Not Rated A credit rating is not a recommendation to buy, sell, or hold securities. It should be evaluated independently of any other rating. Ratings are subject to revision or withdrawal at any time by the rating organization.
Collateral Postings Any weakening of our credit ratings may reduce access to capital and trigger additional collateral postings and prepayrnents. Such changes may also increase the cost of borrowing, resulting in an adverse effect on earnings. Cash collateral postings and prepayments made with external parties, including postings related to exchange-traded contracts, were $1 I 0 million for Ameren and Ameren Missouri and cash collateral posted by external parties were $35 million, $4 million, and $31 million forAmeren, Ameren Missouri, and Ameren Illinois, respectively, at March 31 2022. A sub-investment-grade issuer or senior unsecured debt rating (below Baa3 from Moodys or below BBB- from S&P) at March 31 2022, could have resulted in Ameren, Ameren Missouri, or Ameren Illinois being required to post additional collateral or other assurances for certain trade obligations amounting to $98 million, $68 million, and $30 million, respectively.
Changes in commodity prices could trigger additional collateral postings and prepayments. Based on credit ratings at March 31 2022, if, market prices were 15% higher or lower than March 31 2022 levels in the next 12 months and 20% higher or lower thereafter through the end of the term of the commodity contracts, then Ameren and Ameren Missouri could be required to post an immaterial amount, compared to each companys liquidity, of collateral or provide other assurances for certain trade obligations.
OUTLOOK Below are some key trends, events, and uncertainties that may reasonably affect our results of operations, financial condition, or liquidity, as well as our ability to achieve strategic and financial objectives, for 2022 and beyond. The continued effect of the COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future 59
regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. Although restrictions on social activities and nonessential businesses implemented in our service territories in 2020 have been relaxed, additional restrictions may be imposed in the future. We continue to monitor the impacts the COVID-1 9 pandemic is having on our businesses, including but not limited to impacts on our liquidity; demand for residential, commercial, and industrial electric and natural gas services; supply chain operations; the availability of our employees and contractors; counterparty credit; capital construction; infrastructure operations and maintenance; and pension valuations. For additional information regarding recent rate orders, lawsuits, and pending requests filed with state and federal regulatory commissions, including those discussed below, see Note 2 Rate and Regulatory Matters under Part I, Item I ofthis report and Note 2 Rate and Regulatory Matters under Part II, Item 8, ofthe Form JO-K.
Operations In the first three months of 2022, our sales volumes, which have been, and continue to be, affected by the COVID-J 9 pandemic, among other things, were comparable to the same period in 2021 excluding the estimated effects of weather and customer energy-efficiency programs. While total sales volume levels were also comparable to pre-pandemic levels, there has been a shift in sales volumes by customer class, which began in 2020, with an increase in residential sales, and a decrease in commercial and industrial sales. Because of their regulatory frameworks, Ameren Illinois and AIXIs revenues are largely decoupled from changes in sales volumes.
The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on investments in certain property, plant, and equipment placed in service, and not included in base rates. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC, with all approved PISA deferrals added to rate base prospectively and recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the J 5% of depreciation expense not recovered under the PISA, and earn a return at the applicable WACC for investments in renewable generation plant placed in service to comply with Missouris renewable energy standard. Accumulated RESRAM deferrals earn carrying costs at short-term interest rates. The PISA and the RESRAM mitigate the effects of regulatory lag between regulatory rate reviews. Those investments not eligible for recovery under the PISA and the remaining J 5% of certain property, plant, and equipment placed in service, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. Ameren Missouri defers its cost of debt relating to PISA eligible investments as an offset to interest charges with the difference between the applicable WACC and its cost of debt recognized in revenues when recovery of such deferrals is reflected in customer rates. As a result of the PISA election, additional provisions of the law apply to Ameren Missouri, including limitations on electric customer rate increases. Ameren Missouri does not expect to exceed these rate increase limitations in 2022. Both the rate increase limitation and the PISA are effective through December 2023, unless Ameren Missouri requests and the MoPSC approves an extension through December 2028. In May 2022, Senate Bill 745 passed the Missouri General Assembly and was sent to the governor for approval. If enacted, among other things, the bill would extend the PISA election through December 2028 and allow for an additional five-year extension through December 2033 if requested by Ameren Missouri and approved by the MoPSC. In addition, a 2.5% limit on customer rate increases resulting from PISA deferrals would become effective beginning in 2024.
For information on the rate increase limitation effective through 2023, see Note 2 Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K.
In 201 8, the MoPSC issued an order approving Ameren Missouris MEEIA 201 9 plan. The plan includes a portfolio of customer energy-efficiency programs through December 2023 and low-income customer energy-efficiency programs through December 2024, along with a rider. Ameren Missouri intends to invest approximately $360 million over the life of the plan, including $70 million in 2022 and $75 million in 2023. The plan includes the continued use of the MEEIA rider, which allows Ameren Missouri to collect from, or refund to, customers any difference in actual MEEIA program costs and related lost electric margins and the amounts collected from customers. In addition, the plan includes a performance incentive that provides Ameren Missouri an opportunity to earn additional revenues by achieving certain customer energy-efficiency goals. If the target goals were achieved for 2021 and are achieved for 2022, additional revenues of $24 million would be recognized in 2022, and, if target goals are achieved for 2023, additional revenues of $1 3 million would be recognized in 2023.
In December 2021 the MoPSC issued an order in Ameren Missouris 2021 electric service regulatory rate review, resulting in an increase of
$220 million to Ameren Missouris annual revenue requirement for electric retail service. As a result of this order, Ameren Missouri expects a year-over-year increase to 2022 earnings, compared to 2021 primarily in the third quarter of 2022 due to seasonal electric customer rates and higher demand during the summer. Ameren Missouri expects earnings to increase approximately $23 million in the third quarter of 2022, compared to the same period in 2021.
Ameren Illinois and ATXI use a forward-looking rate calculation with an annual revenue requirement reconciliation for each companys electric transmission business. Based on expected rate base and the currently allowed I 0.52% ROE, which includes a 50 basis point incentive adder for participation in an RTO, the revenue requirements included in 2022 rates forAmeren Illinois and ATXIs electric transmission businesses are $422 million and $195 million, respectively. These revenue requirements represent an increase in Ameren Illinois revenue requirement of $42 million and a decrease in ATXIs revenue requirements of $5 million from the revenue requirements reflected in 2021 rates, primarily due to higher expected rate base at Ameren Illinois and a lower expected rate base at ATXI. These 60
rates will affect Ameren Illinois and ATXIs cash receipts during 2022, but will not determine their respective electric transmission service operating revenues, which will instead be based on 2022 actual recoverable costs, rate base, and a return on rate base at the applicable WACC as calculated under the FERC formula ratemaking framework.
p The allowed base ROE for FERC-regulated transmission rates previously charged under the MISO tariff is the subject of an appeal filed with the United States Court of Appeals for the District of Columbia Circuit. Depending on the outcome ofthe appeal, the transmission rates charged during previous periods and the currently effective rates may be subject to change. Additionally, in March 201 9, the FERC issued a Notice of Inquiry regarding its transmission incentives policy. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which addressed many of the issues in the Notice of Inquiry on transmission incentives. The Notice of Proposed Rulemaking included an increased incentive in the allowed base ROE for participation in an RTO to 100 basis points from the current 50 basis points and revised the parameters for awarding incentives, while limiting the overall incentives to a cap of 250 basis points, among other things. In April 2021 the FERC issued a Supplemental Notice of Proposed Rulemaking, which proposes to modify the Notice of Proposed Rulemakings incentive for participation in an RTO by limiting this incentive for utilities thatjoin an RTO to 50 basis points and only allowing them to earn the incentive for three years, among other things. If this proposal is included in a final rule, Ameren Illinois and ATXI would no longer be eligible for the 50 basis point RTO incentive adder, prospectively. The FERC is under no deadline to issue a final rule on this mailer. Ameren is unable to predict the ultimate impact of any changes to the FERCs incentives policy, or any further order on base ROE. A 50 basis point change in the FERC-allowed base ROE would affect Amerens and Ameren Illinois annual net income by an estimated $12 million and $8 million, respectively, based on each companys 2022 projected rate base.
Ameren Illinois electric distribution service performance-based formula ratemaking framework under the IEIMA allows Ameren Illinois to reconcile electric distribution service rates to its actual revenue requirement on an annual basis to reflect actual recoverable costs incurred and a return at the applicable WACC on year-end rate base. If a given years revenue requirement varies from the amount collected from customers, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to reflect that years actual revenue requirement, independent of actual sales volumes. The regulatory balance is then collected from, or refunded to, customers within two years from the end of the year. Pursuant to an order issued by the ICC in March 2021 Ameren Illinois expects to use the current IEIMA formula framework to establish annual customer rates effective through 2023, and reconcile the related revenue requirement for customer rates established for 2022 and 2023. As such, Ameren Illinois 2022 and 2023 revenues would reflect each years actual recoverable costs, year-end rate base, and a return at the applicable WACC, with the ROE component based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. For more information on the March 2021 ICC order, see Note 2 Rate and Regulatory Matters under Part II, Item 8, ofthe Form JO-K. Bylaw, the decoupling provisions extend beyond the end of existing performance-based formula ratemaking, which ensures that Ameren Illinois electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes.
Pursuant to the IETL, which was enacted in September 2021 Ameren Illinois may file an MYRP with the ICC to establish base rates for electric distribution service to be charged to customers for each calendar year of a four-year period. An MYRP would allow Ameren Illinois to reconcile electric distribution service rates to its actual revenue requirement on an annual basis, subject to a reconciliation cap and adjustments to the ICC-determined ROE for performance incentives and penalties. Ameren Illinois existing riders will remain effective whether it elects to file an MYRP or a traditional regulatory rate review. Additionally, electric distribution service revenues would continue to be decoupled from sales volumes under either election. Subject to a constructive outcome regarding the ICCs determination of performance metrics, Ameren Illinois anticipates filing an MYRP by mid-January 2023, with rates effective beginning in 2024. IfAmeren Illinois does not file an MYRP for rates effective beginning in 2024, its next opportunity to file an MYRP would be for rates effective beginning in 2028. For additional information regarding ratemaking under an MYRP, including details of the reconciliation cap, see Note 2 Rate and Regulatory Matters under Part II, Item 8, ofthe Form 10-K.
In 2021 the ICC issued an order in Ameren Illinois annual update filing that approved a $58 million increase in Ameren Illinois electric distribution service rates beginning in January 2022. Ameren Illinois 2022 electric distribution service revenues will be based on its 2022 actual recoverable costs, 2022 year-end rate base, and a return at the applicable WACC, with the ROE component based on the annual average ofthe monthly yields of the 30-year United States Treasury bonds plus 580 basis points. As of March 31 2022, Ameren Illinois expects its 2022 electric distribution year-end rate base to be $3.9 billion. The 2022 revenue requirement reconciliation adjustment will be collected from, or refunded to, customers in 2024. A 50 basis point change in the annual average of the monthly yields ofthe 30-year United States Treasury bonds would result in an estimated $1 I million change in Amerens and Ameren Illinois annual net income, based on Ameren Illinois 2022 projected year-end rate base, including electric energy-efficiency investments. Ameren Illinois allowed ROE for the first three months of 2022 was based on an estimated annual average of the monthly yields of the 30-year United States Treasury bonds of 2.66%.
In April 2022, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC to be used for 2023 rates, requesting an increase of $83 million. An ICC decision in this proceeding is required by December 2022, with new rates effective in January 2023. These rates will affect Ameren Illinois cash receipts during 2023, but will not affect electric distribution service 61
revenues, which will be based on 2023 actual recoverable costs, 2023 year-end rate base, and a return at the applicable WACC as calculated under the Illinois performance-based formula ratemaking framework.
S Pursuant to Illinois law, Ameren Illinois electric energy-efficiency investments are deferred as a regulatory asset and earn a return at the applicable WACC, with the ROE component based on the annual average ofthe monthly yields ofthe 30-year United States Treasury bonds plus 580 basis points. The allowed ROE on electric energy-efficiency investments can be increased or decreased by up to 200 basis points, depending on the achievement of annual energy savings goals. While the ICC has approved a plan for Ameren Illinois to invest approximately $100 million per year in electric energy-efficiency programs through 2025, the ICC has the ability to reduce the amount of electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not recovered through the electric distribution service performance-based formula ratemaking framework. In April 2022, Ameren Illinois filed a revised energy-efficiency plan with the ICC to invest approximately
$120 million per year in electric energy-efficiency programs through 2025, which reflects the increased level of annual investments allowed under the IETL. The ICC is under no deadline to issue an order in this proceeding.
Ameren Missouris scheduled refueling and maintenance outage at its Callaway Energy Center began in April 2022. Ameren Missouri expects to incur approximately $50 million in maintenance expenses related to the outage. During a scheduled refueling, which occurs every 1 8 months, maintenance expenses are deferred as a regulatory asset and amortized until the completion of the next refueling and maintenance outage. During an outage, depending on the availability of its other generation sources and the market prices for power, Ameren Missouris purchased power costs may increase and the amount of excess power available for sale may decrease versus non-outage years. Changes in purchased power costs and excess power available for sale are included in the FAC, which results in limited impacts to earnings. In addition, Ameren Missouri may incur increased non-nuclear energy center maintenance costs in non-outage years.
Ameren Missouris next refueling and maintenance outage at its Callaway energy center is scheduled for the fall of 2023.
In December 2021 Ameren Missouri filed a motion with the United States District Court for the Eastern District of Missouri to modify a September 2019 remedy order issued by the district court to allow the retirement ofthe Rush Island Energy Center in advance of its previously expected useful life in lieu of installing a flue gas desulfurization system. The district court is under no deadline to issue a ruling revising the remedy order. In January 2022, the MISO completed a preliminary informational assessment regarding potential impacts of the retirement to the regional electric power system, which indicated transmission upgrades and voltage support would be needed in advance of the retirement of the Rush Island Energy Center to address reliability concerns. In February 2022, Ameren Missouri formally notified the MISO of its intent to retire the Rush Island Energy Center and requested the MISO to perform a final reliability assessment, which is expected to be completed in May 2022. The MISO must also separately approve the specific upgrades and transmission support required to address reliability concerns noted in the final assessment. Additionally, the MISO will determine whether reliability concerns require the Rush Island Energy Center to be classified as a system support resource, which should continue operating until the completion of to-be-specified transmission upgrades. If the Rush Island Energy Center were identified as a system support resource, an agreement detailing the manner of and time for continued operation would be filed with the FERC for approval. The district court has the authority to determine the retirement date and operating parameters for the Rush Island Energy Center and is not bound by the MISO determination or FERCs approval. For additional information on the NSR and Clean AirAct litigation, see Note 9 Commitments and Contingencies under Part I, Item I of this report. Ameren Missouri expects to file an update to the 2020 IRP with the MoPSC in June 2022 to reflect the planned acceleration of the retirement of the Rush Island Energy Center from 2039, the retirement year for the facility as reflected in the 2020 IRP. In February 2022, the MoPSC issued an order directing the MoPSC staff to review Ameren Missouris planned accelerated retirement of the Rush Island Energy Center, including potential impacts on the reliability and cost ofAmeren Missouris service to its customers, Ameren Missouris plans to mitigate the customer impacts of the accelerated retirement, and the prudence ofAmeren Missouris actions and decisions with regard to the Rush Island Energy Center, among other things. In April 2022, the MoPSC staff filed an initial report with the MoPSC in which the staff concluded early retirement of the Rush Island Energy Center may cause reliability concerns. The MoPSC staff is under no deadline to complete this review. As of December 31 2021 and March 31 2022, Ameren and Ameren Missouri classified the remaining net book value of the Rush Island Energy Center as plant to be abandoned, net, within Property, Plant, and Equipment, Net on Amerens and Ameren Missouris balance sheets. As part of the assessment of any potential future abandonment loss, consideration will be given to rate and securitization orders issued by the MoPSC to Ameren Missouri and to orders issued to other Missouri utilities with similar facts.
In January 2022, Ameren Missouri received notice of a proposed determination by the EPA that it has rejected Ameren Missouris requests to extend the timeline for operating certain impoundments located at the Sioux and Meramec energy centers. Pursuant to the terms of the proposed determination, compliance with the CCR Rules requirements for closure ofthe impoundments would be required 135 days after the EPA issues a final determination, which Ameren Missouri expects to be issued in the spring of 2022. IfAmeren Missouri was no longer able to use the surface impoundments at the Sioux or Meramec energy centers, Ameren Missouri would not be able to operate the energy centers unless an alternative for handling the CCR material was available. Ameren Missouri will retire the Meramec Energy Center in 2022, and construction is underway to complete a CCR Rule-compliant impoundment at the Sioux Energy Center to allow for continued operations. Additionally, Ameren Missouri is seeking a reliability determination from the MISO, which, if 62
granted and accepted by the EPA, would extend the deadline to comply with the requirement to close the surface impoundments and allow the energy centers to operate. Ameren expects the MISO determination to be completed in June 2022. Ameren Missouri does not expect that this matter will have a material adverse effect on its results of operations, financial position, or liquidity.
The IETL established emission standards that became effective in September 2021 Ameren Missouris natural gas-fired energy centers in Illinois are subject to limits on emissions, including CO2 and NOx, equal to their unit-specific average emissions from 2018 through 2020, for any rolling twelve-month period beginning October 1 2021 through 2029. Further reductions to emissions limits will become effective between 2030 and 2040, which could limit the operations ofAmeren Missouris five natural gas-fired energy centers located in the state of Illinois, and will result in the closure ofthe Venice Energy Center by 2030. These energy centers are utilized to support peak loads. Subject to conditions in the IETL, these energy centers may be allowed to exceed the emissions limits in order to maintain reliability of electric utility service as necessary. Ameren Missouri is reviewing the emission standards and the effect they may have on its generation strategy, including any increases in capital expenditures or operating costs, and changes to the useful life of the Venice Energy Center. Ameren Missouri expects to file an update to the 2020 IRP with the MoPSC in June 2022 to reflect, among other things, the impact of these new emissions standards.
In April 2022, the MISO released the results of its 2022 capacity auction, which projected a capacity shortage in the central region of the MISO footprint, which includes Ameren Missouris and Ameren Illinois service territories. The projected shortage resulted in higher capacity prices for June 2022 through May 2023, and the MISO indicated that the shortage may lead to temporary, controlled interruptions of service to maintain system reliability.
We are observing inflationary pressures on the prices of commodities, labor, services, materials, and supplies. Ameren Missouri and Ameren Illinois are generally allowed to pass on to customers prudently incurred costs for fuel, purchased power, and natural gas supply. Additionally, for certain non-commodity cost changes, the use of trackers, riders, and formula ratemaking, as applicable, mitigates our exposure. The inflationary pressures could impact our ability to control costs and/or make substantial investments in our businesses, including our ability to recover costs and investments, and to earn our allowed ROEs within frameworks established by our regulators, while maintaining rates that are affordable to our customers. Eased on estimated power prices and customer demand, the capacity price set by the April 2022 MISO auction, and the amounts of energy and capacity hedged through IPA procurement events, Ameren Illinois estimates an increase to purchased power costs for calendar year 2022, compared to 2021 of approximately $400 million. The actual increase to purchased power costs will vary due to differences between estimated and realized power prices as well as customer demand, which will be affected by changes in customers elections to use Ameren Illinois or an alternative retail electric supplier for their energy needs. Because of the power procurement riders, the difference between actual purchased power costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. These pass-through costs do not affect Ameren Illinois net income, as any change in costs are offset by a corresponding change in revenues.
Ameren Missouri and Ameren Illinois continue to make infrastructure investments and expect to seek increases to electric and natural gas rates to recover the cost of investments and earn an adequate return. Ameren Missouri and Ameren Illinois will also seek new, or to maintain existing, legislative solutions to address regulatory lag and to support investment in their utility infrastructure for the benefit of their customers. Ameren Missouri and Ameren Illinois continue to face cost recovery pressures, including limited economic growth in their service territories, increasing inflation, economic impacts of the COVID-19 pandemic, customer conservation efforts, the impacts of additional customer energy-efficiency programs, and increased customer use of increasingly cost-effective technological advances, including private generation and energy storage. However, over the long-term, we expect the decreased demand to be partially offset by increased demand resulting from increased electrification of the economy for efficiencies and as a means to address economy-wide CO2 emission concerns.
We expect that increased investments, including expected future investments for environmental compliance, system reliability improvements, and new generation sources, will result in rate base and revenue growth but also higher depreciation and financing costs.
Liquidity and Capital Resources U
While our customers payment for our services had previously been adversely affected by the COVID-1 9 pandemic, payment activity has returned to levels more comparable to pre-pandemic levels. However, our liquidity and our capital expenditure plans could be adversely affected by other impacts resulting from the COVID-1 9 pandemic, including but not limited to potential impacts on our ability to access the capital markets on reasonable terms when needed and the timing of tax payments and the utilization of tax credits. We expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, however, disruptions to the capital markets and the ability of our suppliers and contractors to perform as required under their contracts could impact the execution of our capital investment strategy. For further discussion on the impacts to our ability to access the capital markets, see below.
In February 2022, Ameren Missouri filed an update to its Smart Energy Plan with the MoPSC, which includes a five-year capital investment overview with a detailed one-year plan for 2022. The plan is designed to upgrade Ameren Missouris electric infrastructure 63
and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $8.4 billion over the five-year period from 2022 through 2026, with expenditures largely recoverable under the PISA and the RESRAM. The planned investments in 2024 through 2026 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA from December 2023 to December 2028. For additional information on Senate Bill 745, and its impact on the PISA, see above.
In connection with Ameren Missouris 2020 IRP, Ameren established a goal of achieving net-zero carbon emissions by 2050. Ameren is also targeting a 50% CO2 emission reduction by 2030 and an 85% reduction by 2040 from the 2005 level. Amerens CO2 emission reduction targets encompass direct emissions from Ameren Missouris and Ameren Illinois operations, with nearly all of those emitted by Ameren Missouris generation fleet. In 2021 the MoPSC issued an order affirming the plans compliance with Missouri law. The plan targets cleaner and more diverse sources of energy generation, including solar, wind, hydro, and nuclear power, and supports increased investment in new energy technologies. It also indudes expanding renewable sources by adding 3,100 MWs of renewable generation by the end of 2030 and a total of 5,400 MWs of renewable generation by 2040. These amounts include 700 MWs related to the High Prairie Renewable and Atchison Renewable energy centers, which support Ameren Missouris compliance with the state of Missouris requirement of achieving 15% of native load sales from renewable energy sources that began in 2021 The plan also includes accelerating the retirement dates of the Sioux and Rush Island coal-fired energy centers to 2028 and 2039, respectively, the continued implementation of customer energy-efficiency programs, and the expectation that Ameren Missouri will seek NRC approval for an extension of the operating license for the Callaway Energy Center beyond its current 2044 expiration date. Additionally, the plan includes retiring the Meramec and Labadie coal-fired energy centers at the end oftheir useful lives (by 2022 and 2042, respectively). Ameren Missouris plan could be affected by, among other factors: Ameren Missouris ability to obtain certificates of convenience and necessity from the MoPSC, and any other required approvals for the addition of renewable resources, retirement of energy centers, and new or continued customer energy-efficiency programs; the ability to enter into build-transfer agreements for renewable generation and acquire that generation at a reasonable cost; the ability of developers to meet contractual commitments and timely complete projects, which is dependent upon the availability of necessary labor, materials, and equipment, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic or government actions, among other things; changes in the scope and timing of projects; the availability of federal production and investment tax credits related to renewable energy and Ameren Missouris ability to use such credits; the cost of wind, solar, and other renewable generation and storage technologies; changes in environmental regulations, including those related to carbon emissions; energy prices and demand; and Ameren Missouris ability to obtain necessary rights-of-way, easements, and transmission interconnection agreements at an acceptable cost and in a timely fashion. In December 2021 the MoPSC issued an order in Ameren Missouris 2021 electric service regulatory rate review, which, among other things, approved a change in the depreciable lives of the Sioux and Rush Island energy centers assets consistent with Ameren Missouris 2020 IRP.
Due to the NSR and Clean Air Act Litigation discussed in Note 9 Commitments and Contingencies under Part I, Item I of this report, Ameren Missouri plans to retire the Rush Island Energy Center prior to the 2039 date discussed above. Ameren Missouri expects to file an update to the 2020 IRP with the MoPSC in June 2022 to reflect an accelerated retirement date for the Rush Island Energy Center and the impact of new emission standards pursuant to the IETL, as discussed in Note 9 Commitments and Contingencies, among other things.
The next integrated resource plan is expected to be filed in September 2023.
S Missouri law allows Missouri electric utility companies to petition the MoPSC for a financing order to authorize the issuance of securitized utility tariff bonds to finance the cost of retiring electric generation facilities before the end of their useful lives, including the repayment of existing debt. In connection with the planned accelerated retirement of the Rush Island Energy Center due to the NSR and Clean Air Act Litigation discussed above, Ameren Missouri expects to seek approval from the MoPSC to finance the costs associated with the retirement, including the remaining unrecovered net plant balance associated with the facility, through the issuance of securitized utility tariff bonds.
In February 2022, Ameren Missouri, through a subsidiary, entered into a build-transfer agreement to acquire a 150-MW solar generation facility after construction. The facility is expected to be located in southeastern Illinois. The acquisition is subject to certain conditions, including the issuance of a certificate of convenience and necessity by the MoPSC, obtaining a MISO transmission interconnection agreement, and approval by the FERC. Ameren Missouri expects to file for a certificate of convenience and necessity with the MoPSC by mid-2022. Depending on the timing of regulatory approvals and the impact of potential sourcing issues discussed below, the project could be completed as early as 2024. Capital expenditures related to this facility are not included in Amerens and Ameren Missouris expected capital investments discussed below.
Ameren Missouris 2020 IRP targets cleaner and more diverse sources of energy generation, induding solar generation. While rights to acquire the 150-MW solar facility discussed above were secured through a build-transfer agreement, supply chain disruptions, including solar panel shortages and increasing material costs as a result of government tariffs and other factors, could affect the costs as well as the timing of this project and other solar generation projects. The supply of solar panels to the United States has been significantly disrupted as a result of an investigation initiated by the Department of Commerce in late March 2022, which could result in punitive tariffs on solar panels imported from four Southeast Asian countries. The investigation is in response to complaints of Chinese solar manufacturers shifting solar cells to these countries to avoid tariffs required on imports from China. The Department of Commerce is 64
required to issue a preliminary determination within 150 days of its initiation of an investigation, with final determination taking 300 days or more. Additionally, certain solar panels from China have been subject to detention by the United States Customs and Border Protection Agency as a result of the Uyghur Forced Labor Prevention Act that was passed in December 2021 Any tariffs or other outcomes resulting from the investigation by the Department of Commerce or actions by the United States Customs and Border Protection Agency could affect the cost and the availability of solar panels and the timing and amount ofAmeren Missouris estimated capital expenditures associated with solar generation investments.
Through 2026, we expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, with a major portion directed to our transmission and distribution systems. We estimate that we will invest up to $18.0 billion (Ameren Missouri up to
$9.2 billion; Ameren Illinois up to $8.6 billion; ATXI up to $0.2 billion) of capital expenditures during the period from 2022 through 2026.
These planned investments are based on the assumption of continued constructive regulatory frameworks, including an assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA from December 2023 to December 2028. Amerens and Ameren Missouris estimates exclude renewable generation investment opportunities of I 200 MWs by 2026, which are included in Ameren Missouris 2020 IRP, and additional investment opportunities that may be approved by the MISC to address reliability concerns in connection with the planned accelerated retirement of the Rush Island Energy Center.
In 2021 the MISC issued a report outlining a preliminary long-range transmission planning roadmap of projects through 2039, which considers the rapidly changing generation mix within MISC resulting from significant additions of renewable generation, actual and expected generation plant closures, and state mandates or goals for clean energy or carbon emissions reductions. In February 2022, the MISC updated a list of projects under consideration for the first phase of the roadmap, and is expected to approve certain projects for the first phase in late July 2022. Expenditures that result from the MISC long-range transmission planning roadmap may cause adjustments to our estimated 2022 through 2026 capital expenditures.
Environmental regulations, including those related to CC2 emissions, or other actions taken by the EPA or state regulators, or requirements that may result from the NSR and Clean Air Act Litigation discussed in Note 9 Commitments and Contingencies under Part I, Item I of this report, could result in significant increases in capital expenditures and operating costs. Regulations enacted by a prior federal administration can be reviewed and repealed, and replacement or alternative regulations can be proposed or adopted by the current federal administration including the EPA. The ultimate implementation of any of these regulations, as well as the timing of any such implementation, is uncertain.
However, the individual or combined effects of existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of some ofAmeren Missouris coal and natural gas-fired energy centers. Ameren Missouris capital expenditures are subject to MoPSC prudence reviews, which could result in cost disallowances as well as regulatory lag.
The cost ofAmeren Illinois purchased power and natural gas purchased for resale could increase. However, Ameren Illinois expects that these costs would be recovered from customers with no material adverse effect on its results of operations, financial position, or liquidity.
Amerens and Ameren Missouris earnings could benefit from increased investment to comply with environmental regulations if those investments are reflected and recovered on a timely basis in customer rates.
The Ameren Companies have multiyear credit agreements that cumulatively provide $2.3 billion of credit through December 2025, subject to a 364-day repayment term forAmeren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $2.7 billion. See Note 3 Short-term Debt and Liquidity under Part I, Item I of this report and Note 4 Short-term Debt and Liquidity under Part II, Item 8, in the Form 10-K for additional information regarding the CreditAgreements. By the end of 2022, $55 million, $400 million, and $50 million of long-term debt obligations are due to mature at Ameren Missouri, Ameren Illinois, and ATXI, respectively. Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, and financing plans. To date, the Ameren Companies have been able to access the capital markets on reasonable terms when needed. However, there can be no assurance that significant changes in economic conditions, disruptions in the capital and credit markets, or other unforeseen events will not materially affect their ability to execute their expected operating, capital, or financing plans.
Ameren expects its cash used for currently planned capital expenditures and dividends to exceed cash provided by operating activities over the next several years. As part of its funding plan for capital expenditures, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2026. Ameren expects these issuances to provide equity of about $1 00 million annually. In addition, in 2021 Ameren, established an ATM program under which Ameren may offer and sell from time to time up to $750 million of its common stock, which includes the ability to enter into forward sales agreements, subject to market conditions and other factors. For additional information regarding outstanding forward sale agreements, including settlement dates, see Note 4 Long-Term Debt and Liquidity under Part I, Item I, of this report. Ameren expects to settle the forward sale agreements by December 31 2022. Ameren plans to issue approximately $300 million of equity each year from 2022 to 2026 in addition to issuances under the DRPlus and employee benefit plans. Ameren expects its equity to total capitalization ratio to be approximately 45% through December 31 2026, with the long-term intent to support solid investment-grade credit ratings. Ameren Missouri and Ameren Illinois expect to fund cash flow needs through debt issuances, adjustments of dividends to Ameren (parent), and/or capital contributions from Ameren (parent).
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I As of March 37 2022, Ameren had $1 36 million in tax benefits from federal and state income tax credit carryforwards and $35 million in tax benefits from federal and state net operating loss carryforwards, which will be utilized in future periods. Ameren expects federal income tax payments at the required minimum levels from 2022 to 2026 resulting from the anticipated use of existing production tax credits generated by Ameren Missouris High Prairie Renewable and Atchison Renewable energy centers, existing tax net operating losses, tax credit carryforwards, tax overpayrnents, and outstanding refunds.
. As a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, for the month of February 2021 Ameren Missouri and Ameren Illinois had under-recovered costs under their PGA clauses and, forAmeren Missouri, underthe FAC (Ameren Missouri PGA $53 million, FAC $50 million; Ameren Illinois PGA $221 million).
Ameren Missouris PGA and FAC under-recoveries are designed to be collected from customers over 12 months beginning November 2021 and eight months beginning October 2021 respectively. In October 2021 the MoPSC issued an order allowing Ameren Missouri to extend the collection period for the cumulative PGA under-recovery as ofAugust 2021 which includes the February 2021 under-recovery, from 12 months to 36 months beginning November 2021 to lessen the impact on customer rates. Ameren Illinois is collecting the PGA under-recovery over 18 months beginning April 2021.
The above items could have a material impact on our results of operations, financial position, and liquidity. Additionally, in the ordinary course of business, we evaluate strategies to enhance our results of operations, financial position, and liquidity. These strategies may include acquisitions, divestitures, opportunities to reduce costs or increase revenues, and other strategic initiatives to increase Amerens shareholder value. We are unable to predict which, if any, of these initiatives will be executed. The execution of these initiatives may have a material impact on our future results of operations, financial position, or liquidity.
REGULATORY MATrERS See Note 2 Rate and Regulatory Matters under Part I, Item I of this report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKEr RISK.
There have been no material changes to the quantitative and qualitative disclosures about interest rate risk, credit risk, commodity pnce risk, investment price risk, and commodity supplier risk included in the Form 10-K, except for as discussed below. See Item 7A under Part II of the Form I 0-K for a more detailed discussion of our market risk.
Ameren Missouri has an immaterial amount of enriched uranium that will be utilized later this decade sourced from a Russian supplier that could become subject to future sanctions. Ameren Missouri is reviewing options to reduce its exposure from Russian uranium suppliers. Ameren Missouri has inventories and supply contracts from non-Russian suppliers sufficient to meet all of its uranium (concentrate and hexafluoride),
conversion, and enrichment requirements at least through the 2026 refueling of the Callaway Energy Center.
ITEM 4. CONTROLS AND PROCEDURES.
(a) Evaluation of Disclosure Controls and Procedures As of March 31 2022, evaluations were performed under the supervision and with the participation of management, including the principal executive officer and the principal financial officer of each of the Ameren Companies, of the effectiveness of the design and operation of such registrants disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) ofthe ExchangeAct). Based on those evaluations, as of March 31 2022, the principal executive officer and the principal financial officer of each of the Ameren Companies concluded that such disclosure controls and procedures are effective to provide assurance that information required to be disclosed in such registrants reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SECs rules and forms and such information is accumulated and communicated to its management, including its principal executive officer and its principal financial officer, to allow timely decisions regarding required disclosure.
(b) Changes in Internal Controls over Financial Reporting There has been no change in any of the Ameren Companies internal control over financial reporting during their most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, each of their internal control over financial reporting.
PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS.
We are involved in legal and administrative proceedings before various courts and agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in this report, will not have a material adverse effect on our results of operations, financial position, or liquidity.
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Risk of loss is mitigated, in some cases, by insurance or contractual or statutory indemnification. We believe that we have established appropriate reserves for potential losses. For additional information on material legal and administrative proceedings, see 2 Rate and Regulatory Matters, Note 9 Commitments and Continqencie. and Note JO Callaway Energy Center, under Part I, Item 1, ofthis report.
Pursuant to Item I 03(c)(3)(iii) of Regulation S-K, our policy is to disclose environmental proceedings to which a governmental entity is a party if we reasonably believe such proceedings will result in monetary sanctions of $1 million or more.
ITEM IA. RISK FACTORS.
There have been no material changes to the risk factors disclosed in Part I, Item IA, Risk Factors in the Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Ameren Corporation, Ameren Missouri, and Ameren Illinois did not purchase equity securities reportable under Item 703 of Regulation S-K during the period from January 1 2022, to March 31 2022.
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ITEM 6. EXHIBITS.
The documents listed below are being filed or have previously been filed on behalf of the Ameren Companies and are incorporated herein by reference from the documents indicated and made a part hereof. Exhibits not identified as previously filed are filed herewith.
Exhibit Designation Registrant(s) Nature of Exhibit PrevioyFiledasExhibit to:
Instruments Defining Rights of Security Holders, Including Indentures 4.1 Ameren Supplemental Indenture to theAmeren Missouri Mortga, dated Match 1, 2022, fot April 1, 2022 Fotm 8-K, Exhibit 4.2, Ameren Missouri 3.90% Fitst Mortgge Bonds due2Q2 File No. 1-2967 Rule 13a-14(a) I 15d-14(a) certifications 31.1 Ameren Rule 13a-14()/15d-14(a) Certification of Principal Executive Officer of Ameren 31.2 Ameren ofPnndpalRnancjl Officer ofAmeren 31.3 Ameren Missouri Rule 13a-14fg))15d-14ai certification of Principal Executive Officer of Ameren Missouri 31.4 Ameren Missouri aule 13a-14i)/15d-14(gi ce-tition of Princbal Financial Officer of Ameren Missouri 31 5 Ameren Illinois Rule Qffier ofAmeren llnois 31 6 Ameren Illinois Rule 13a14(j/15d 14(a) certiflction of Pnncipal Financial Officer ofAmeren Illinois Section 1350 Certifications 32.1 Ameren n 1350 Certification of Principal Executive Officer and Principal Financial 0 ofAmeren 32.2 Ameren Missouri Section 1 350 Certification of Principal Executive Officer and Principal Financial ffcer olAmeren Missouri 32.3 Ameren Illinois Section 1350 Certification of Principal Executive Officer and Principal Financial Officer ofAmeren Illinois Interactive Data Files 1O1.INS Ameren Companies Inline XBRL Instance Document the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document I 01 .SCH Ameren Companies Inline XBRL Taxonomy Extension Schema Document 101 CAL Ameren Companies Inline XBRL Taxonomy Extension Calculation Linkbase Document 1O1.LAB Ameren Companies Inline XBRL Taxonomy Extension Label Linkbase Document I 01 PRE Ameren Companies Inline XBRL Taxonomy Extension Presentation Linkbase Document 1O1.DEF Ameren Companies Inline XBRL Taxonomy Extension Definition Document 104 Ameren Companies Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
The file number references for the Ameren Companies filings with the SEC are: Ameren, 1-14756; Ameren Missouri, 1-2967; and Ameren Illinois, 1-3672.
Each registrant hereby undertakes to furnish to the SEC upon request a copy of any long-term debt instrument not listed above that such registrant has not filed as an exhibit pursuant to the exemption provided by Item 601 (b)(4)(iii)(A) of Regulation S-K.
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SIGNATURES Pursuant to the requirements ofthe Exchange Act, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.
AMEREN CORPORATION (Registrant)
Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
UNION ELECTRIC COMPANY (Registrant)
Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
AMEREN ILLINOIS COMPANY (Registrant)
Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: May 6, 2022 69
Exhibit 31.1 RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OFAMEREN CORPORATION (requited by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Martin J. Lyons, Jr., certify that:
I . I have reviewed this report on Form I 0-Q for the quarterly period ended March 31 2022 ofAmeren Corporation;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules I 3a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-I 5(f) and 15d-1 5(f) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022
/5/ Martin J. Lyons, Jr.
Martin J. Lyons, Jr.
President and Chief Executive Officer (Principal Executive Officer)
Exhibit 31.2 RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF AMEREN CORPORATION (required by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Michael L. Moehn, certify that:
- 1. I have reviewed this report on Form 10-Q for the quarterly period ended March 31 2022 ofAmeren Corporation;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control overfinancial reporting (as defined in ExchangeAct Rules 13a-I 5(f) and I 5d-1 5(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022 Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Exhibit 31.3 RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF UNION ELECTRIC COMPANY (required by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Mark C. Birk, certify that:
I I have reviewed this report on Form 10-Q for the quarterly period ended March 31 2022 of Union Electric Company;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-1 5(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-I 5(f) and 15d-1 5(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022 Is! Mark C. Birk MarkC. Birk Chairman and President (Principal Executive Officer)
Exhibit 31.4 RULE I 3a-1 4(a)/I 5d-I 4(a) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF UNION ELECTRIC COMPANY (requited by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Michael L. Moehn, certify that:
I . I have reviewed this report on Form I 0-Q for the quarterly period ended March 31 2022 of Union Electric Company;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-I 5(f) and I 5d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022
/51 Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Exhibit 31.5 RULE 13a-14(a)115d-14(a) CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER OF AMEREN ILLINOIS COMPANY (required by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Richard J. Mark, certify that:
I I have reviewed this report on Form 10-Q for the quarterly period ended March 31 2022 ofAmeren Illinois Company;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in ExchangeAct Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022
/5/ Richard J. Mark Richard J. Mark Chairman and President (Principal Executive Officer)
Exhibit 31.6 RULE 13a-14(a)/15d-14(a) CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER OF AMEREN ILLINOIS COMPANY (required by Section 302 of the Sarbanes-Oxley Act of 2002)
I, Michael L. Moehn, certify that:
I . I have reviewed this report on Form 10-Q for the quarterly period ended March 31 2022 ofAmeren Illinois Company;
- 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
- 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
- 4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-1 5(e) and 15d-J5(e)) and internal control over financial reporting (as defined in Exchange Act Rules I 3a-15(f) and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
- 5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: May 6, 2022
/s! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Exhibit 32.1 SECTION 1350 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND THE PRINCIPAL FINANCIAL OFFICER OF AMEREN CORPORATION (required by Section 906 of the Sarbanes-Oxley Act of 2002)
In connection with the report on Form 10-Q for the quarterly period ended March 31, 2022 ofAmeren Corporation (the Registrant) as filed by the Registrant with the Securities and Exchange Commission on the date hereof (the Form 10-Q), each undersigned officer of the Registrant does hereby certify, pursuant to 18 USC. §1350, as adopted pursuant to §906 ofthe Sarbanes-OxleyAct of2002, that:
(1) The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) ofthe Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)); and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: May 6, 2022 Is! Martin J. Lyons, Jr.
Martin J. Lyons, Jr.
President and Chief Executive Officer (Principal Executive Officer)
Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Exhibit 32.2 SECTION 1350 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND THE PRINCIPAL FINANCIAL OFFICER OF UNION ELECTRIC COMPANY (required by Section 906 of the Sarbanes-Oxley Act of 2002)
In connection with the report on Form J0-Q for the quarterly period ended March 31, 2022 of Union Electric Company (the Registrant) as filed by the Registrant with the Securities and Exchange Commission on the date hereof (the Form 10-Q), each undersigned officer of the Registrant does hereby certify, pursuant to 18 USC. §7350, as adopted pursuant to §906 ofthe Sarbanes-OxleyAct of2002, that:
(1) The Form J0-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 780(d)); and (2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: May 6, 2022
/5/ Mark C. Birk Mark C. Birk Chairman and President (Principal Executive Officer)
/5/ Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Exhibit 32.3 SECTION 1350 CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER AND THE PRINCIPAL FINANCIAL OFFICER OF AMEREN ILLINOIS COMPANY (required by Section 906 of the Sarbanes-Oxley Act of 2002)
In connection with the report on Form 70-Q for the quarterly period ended March 31, 2022 ofAmeren Illinois Company (the Registrant) as filed by the Registrant with the Securities and Exchange Commission on the date hereof (the Form 10-Q), each undersigned officer of the Registrant does hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 ofthe Sarbanes-OxleyAct of2002, that:
(1) The Form 10-Q fully complies with the requirements of Section 1 3(a) or I 5(d) of the Securities Exchange Act of 1934 (1 5 U.S.C. 78m or 780(d)); and (2) The information contained in the Form J0-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: May 6, 2022 Is! Richard J. Mark Richard J. Mark Chairman and President (Principal Executive Officer)
Is! Michael L. Moehn Michael L. Moehn Executive Vice President and Chief Financial Officer (Principal Financial Officer)