The operator welcomes listeners to Ameren Corporation's Third Quarter 2023 Earnings Call and introduces the host, Andrew Kirk. He is joined by other members of the Ameren management team, including Marty Lyons, the Chairman, President, and CEO. The call contains time-sensitive information and forward-looking statements. Marty congratulates Warner Baxter, who recently retired as Executive Chairman after 28 years with the company.

Ameren's successful execution of a strategy focused on energy infrastructure investments and sustainability has led to strong value for customers, communities, and shareholders. The company's quarterly update highlights their continued dedication to investing in energy infrastructure and their strong sustainability value proposition. An updated sustainability investor presentation is now available, detailing the company's efforts in environmental stewardship, positive social impact, strong governance, and sustainable growth.

The company has a robust pipeline of investment opportunities totaling $48 billion that will strengthen the energy grid and create jobs. However, the recently vetoed legislation that would support timely and cost-effective construction of these projects is a setback. The company remains committed to working with stakeholders to support this legislation in the next legislative session. The company also expects 6-8% compound annual earnings growth from 2023-2027, driven by strong rate base growth and strategic investment allocation. This will result in a strong total return for shareholders compared to other regulated utilities.

The company reported strong third quarter earnings, with growth in all business segments due to increased investments in infrastructure and disciplined cost management. Sales trends for Ameren Missouri and Ameren Illinois Electric Distribution were impacted by weather and the transition back to the office for many people. However, residential sales remain higher than pre-COVID levels and industrial sales are expected to improve with the end of the UAW strike and increased demand.

The company's year-to-date sales to Illinois customers have decreased by 3%, but this does not affect their earnings. They have narrowed their 2023 earnings guidance to be between $4.30 and $4.45 per share. The company's multiyear rate plan includes investments in grid modernization and supports their clean energy transition goals. The ICC staff has recommended a cumulative increase in revenue for the next four years, including a return on equity of 8.9% and a 50% equity ratio.

In September, Ameren Illinois updated its request for a $444 million increase in revenues, but the administrative law judges recommended a lower increase of $338 million. The company has filed exceptions to this recommendation, calling for a return on equity of 9.85% and an equity ratio of 52%. An ICC decision is expected by mid-December with new rates taking effect in January 2024. In April, the company filed for an electric distribution rate reconciliation, with the ICC staff recommending a $110 million increase compared to the company's request for $117 million. For natural gas distribution rates, the company has filed an updated request for a $140 million increase, with the ICC staff recommending a lower increase of $127 million. The company expects an ICC decision by mid-November with rates taking effect in December this year. The company also provides a financing update, stating that they were able to execute two successful debt issuances earlier this year.

In order to fund their infrastructure plan and maintain their credit ratings, the company plans to issue $300 million of common equity and has entered into forward sales agreements. Their natural gas business is well-positioned for the upcoming winter months, with expected bill decreases for residential customers. The company plans to provide 2024 earnings guidance in February and expects higher earnings in Missouri due to new electric service rates and increased investments in infrastructure.

In 2024, Ameren's earnings are expected to increase by $0.02 due to a return to normal weather conditions. This will be further boosted by investments in electric transmission and distribution projects. The allowed ROE for these projects will be determined by the ITC as part of a pending rate review. Higher delivery service rates and disciplined cost management will also contribute to earnings growth. However, increased common shares and higher interest expense may have a negative impact. Ameren's strong earnings growth and attractive dividend and total shareholder return make it a favorable investment option. The conference call is now open for questions.

The unidentified analyst, Nathan Richardson, asks a question about equity needs and how the company plans to address them. Michael Moehn responds that the equity needs are unchanged from the beginning of the year and they have already taken care of the needs for 2023. They have also sold forward some of the equity needs for 2025. The company finds the ATM to be efficient and will continue to evaluate their needs and consider other financing options.

The speaker discusses the company's position on transferability cash flow and how it could benefit them in the future. They also mention the ongoing process in Illinois and the possibility of filing for a rehearing or deferring redeployment of capital expenditures.

The speaker responds to a question about the next steps in their case regarding the Clean Energy and Jobs Act. They mention that they are pleased with the support they have received for their planned capital investments, but are disappointed with the recommended return on equity and treatment of the OPEB asset. They mention that they have filed their brief on exceptions and are hopeful for a more fair outcome from the commission. They also suggest alternative options for the commission to consider.

The executives of the company are not commenting on any potential actions they may take after the commission ruling. They have a positive outlook on their rate base and capital plan, with flexibility to pivot if needed. They confirm that there will be no block equity going into the plan, and that they will continue to use the ATM for cost-effectiveness. They are confident in their ability to grow and execute their infrastructure pipeline.

During a conference call, Shahriar Pourreza congratulates the owner and predicts that he will continue to be busy during Phase 2. Marty Lyons agrees and says that the owner will probably be very busy. The next question comes from Julien Dumoulin-Smith about the company's 6-8% growth in 2024. Michael Moehn responds that they feel good about the situation and the 8.4% rate base growth. They also mention an updated IRP and $1.5 billion of potential capital. Finally, the analyst asks about the competitive transmission projects.

In this paragraph, the speaker asks about the changes in the competitive opportunities for the company. The company responds by stating that while the overall competitive opportunity remains at around $1 billion, the estimates for specific projects may have changed. They attribute this to their ability to partner with others and deliver low-cost projects. However, they caution against extrapolating this outcome to all projects, as each one is unique. The company also mentions that they have submitted a bid for another project.

The speaker discusses the company's plans to bid on the Skunk River and addresses a question about the difference in the ALJ's ROEs compared to their proposal. They also mention the proposed Missouri IRP and how conversations with stakeholders have been balanced. They mention the addition of 800 megawatts of gas simple cycle in 2027.

The company made adjustments to the timing of a coal-fired energy center and a planned combined cycle plant, as well as advancing battery storage technology. These changes were made to maintain affordability, reliability, and environmental stewardship. The company remains competitive in Missouri with renewables and is well-positioned to compete for company-owned generation and contracting.

In the Missouri Public Service Commission's recent approval of two solar projects, Ameren expects to invest 350 megawatts and close the projects in Q4 of 2024. They have also filed for CCNs for four additional solar projects, totaling 550 megawatts, and expect a decision early next year. These projects are in line with their Integrated Resource Plan (IRP), which balances renewable growth with investments in assets for reliability. The IRP also includes investments in gas and battery storage technology, as well as ensuring reliability of existing assets like the Callaway nuclear plant and coal assets through retirement. The costs associated with these renewables are offset by higher production and investment tax credits available under the Inflation Reduction Act.

The speaker believes that their proposed plan for renewable energy is the most cost-effective and will maintain reliability for customers in Missouri. They prefer to own and operate renewable assets rather than enter into PPAs. Load growth has been impacted by storms and the transition from working at home to the office, but the speaker expects it to level out in the future.

The speaker discusses the growth in the residential sector and customer growth, which is expected to lead to sales growth. They also mention positive developments in the industrial sector, including an expansion at GM that will contribute to growth. The speaker believes that load growth will remain at 0.5%, but may increase as the industrial sector evolves. The questioner asks about returns in competitive transmission, but the speaker does not have any data on this.

The company is careful about their costs and return expectations when bidding on projects. They expect to earn a fair return on the project but cannot disclose the exact amount. They are monitoring court cases in Texas and other states and plan to bring forward rights of first refusal in Illinois and Missouri. They will make adjustments to ensure the legality of these rights and will not move forward if they are deemed unlawful. The company believes these rights are beneficial to customers and communities and the recent Orient-Denny-Fairport project showcases their low-cost construction and operation abilities.

The speaker believes that the projects proposed by MISO have great value for customers and should be assigned to the incumbent transmission operator rather than put out for bid. They argue that this will delay benefits to customers and that they are a low-cost provider. They plan to work with stakeholders to put forward legislation that can withstand any court challenges. The question is raised about the potential impact of the Supreme Court ruling on ROFRs, and the speaker suggests that it will depend on how the court rules.

The speaker discusses the financing plan and the challenges they face in executing it, including the need to continue to execute projects and navigate a changing financing environment. They mention the potential to recover financing costs through rate reviews.

The speaker, Marty Lyons, believes that the most important factor in the clean energy transition is making it affordable for customers. He is joined by colleagues Anthony Crowdell and Michael Moehn, who have no further questions. Despite technical difficulties, the company had a strong start to 2023 and is confident in achieving their earnings per share growth goals. They plan to continue delivering value for customers, communities, and shareholders. The company expects 6-8% earnings per share growth for 2023-2027, supported by investments in rate-regulated infrastructure and rate base growth. The speaker thanks the participants and concludes the call.

This summary was generated with AI and may contain some inaccuracies.