The operator welcomes listeners to Ameren Corporation's Second Quarter 2024 Earnings Call and introduces the host, Andrew Kirk. The call contains time-sensitive information and a presentation has been posted on the company's website. The call may contain forward-looking statements and listeners are directed to the forward-looking statements section in the news release and SEC filings for more information. The CEO, Marty Lyons, will discuss the company's second quarter results and recent developments across business segments. The quarter was productive and positive.

In the second quarter, our management team remained focused on executing our strategic plan and taking advantage of investment opportunities in the utility industry. Our earnings and operations results were strong, driven by infrastructure investments, retail sales, and cost control. We are on track to meet our earnings guidance for the year. Our strategic plan prioritizes providing safe and reliable energy in a sustainable manner through infrastructure investments, regulatory enhancements, and responsible energy policies. We are grateful for our dedicated employees and have made significant progress towards our 2024 objectives in the second quarter.

The company has made strategic infrastructure investments to maintain the safety and reliability of the energy grid and to modernize it. These investments have helped prevent customer outages during severe weather events and have also received regulatory approvals for new solar and natural gas generation projects. The company is also working towards securitizing costs associated with the retirement of one of its energy centers.

In June, Ameren Missouri filed a CCN for their Castle Bluff Energy Center and continues to make progress on their smart energy plan. They have also filed an electric rate review request with the Missouri PSC and are awaiting approval. In terms of transmission, MISO has awarded all three competitive projects to Ameren and is developing a $23-27 billion project portfolio. In Illinois, the ICC has issued an order supporting Ameren Illinois' planned grid reliability investment and a decision is expected by the end of the year. Overall, Ameren has seen strong operational performance and is focused on delivering safe, reliable, and affordable energy service through automation, optimization, and standardization.

The company has seen a significant increase in customer growth opportunities, particularly in the data center industry. They are actively working to attract these opportunities to their service territories and have the resources and partnerships to do so. They also offer an attractive value proposition for commercial and industrial customers, with reliable generation and the ability to expand. They have already signed a construction agreement for a 250 megawatt data center, which will greatly increase their sales upon completion, and have also received commitments for additional load from other industries.

The company expects new and expanding customers to be fully operational by 2028, bringing in jobs and tax revenue for the state and local communities. These customer commitments were not included in the company's previous earnings guidance. The company plans to update its Integrated Resource Plan in 2025 to accommodate potential load growth and will work with stakeholders to bring economic benefits to all. The company also received approval for a solar facility in Cass County to serve business customers through its Renewable Energy Solutions program.

In June, a CCN was filed for the Castle Bluff Energy Center, a natural gas facility to serve as a backup energy source. MISO is currently analyzing the Tranche 2 proposed projects, with a cost estimate of $23-27 billion. Ameren expects to compete for Tranche 2 greenfield projects and has a pipeline of investment opportunities worth over $55 billion. Several tailwinds are also forming across their business segments.

The company is experiencing significant sales growth potential, which may require a reassessment of their investment plans. They are also seeing a growing focus on generation planning and reliability in Missouri and anticipate identifying more opportunities to improve electricity movement in the region. The company's 5-year growth plan includes a 6-8% earnings growth rate and an attractive dividend yield, making it an appealing investment opportunity. The company has a strong track record, balance sheet, and management team, and is confident in their ability to execute their investment plans.

In the second quarter of 2024, the company reported earnings of $0.97 per share, an increase from the previous year. This was due to strategic infrastructure investments, cost management, and favorable weather conditions. The company also saw growth in customer numbers and energy usage, particularly from the digital and data analytics industry. Year-to-date results show a 3% increase in industrial sales. The company remains confident in their earnings guidance for the year and expects to see cost savings in the second half of the year.

In this paragraph, the speaker discusses the company's quarterly earnings results and regulatory matters for Ameren Missouri and Ameren Illinois. They mention the approval of securitization for costs associated with the retirement of their Rush Island Energy Center and a recent filing for a rate increase in Missouri. They also mention the ongoing formula rate making process in Illinois and the recommended base rate increase by ICC staff. This will result in a net customer impact of approximately 1.5% increase in the total average residential customer bill.

The International Criminal Court (ICC) will review the matter of the multiyear rate plan and a decision is expected by December. The ICC has approved a $285 million cumulative revenue increase for 2023, which is 94% of the rehearing request and will result in a 1% average residential bill increase for 2024. The order also represents 99% of the rehearing rate base request and 96% of the revised multiyear rate plan. Interim rates are currently in effect and a revised multiyear rate plan will be reviewed later this year. This is a positive step towards achieving the objectives of The Climate and Equitable Jobs Act in Illinois. In July, the ICC staff recommended a $302 million cumulative revenue increase, with the difference primarily due to the renewal of OPEB and certain capital projects.

Ameren is expecting a decision from the ICC by December on their proposed rates effective January 1, 2025. They also provide a financing update, stating that they plan to issue $300 million of common equity in 2024 and have already sold forward $230 million of this through their at-the-market program. Ameren is also focused on finding ways to reduce costs for their customers through various cost-saving initiatives and continuous improvement efforts.

The company is focused on cost savings and efficiency through automation and standardization. They expect strong earnings growth in 2024 and have a solid strategy and team in place. They also mention a recent mediation for a legal case involving Rush Island.

The judge is expected to hold evidence hearings in September and reach a resolution on the case this year. There is no clear indication of where the bid-ask spread will end up. Tranche 2.1 includes a mix of brownfield and greenfield projects, and the company is confident in their ability to compete for and deliver these projects. No specific cost estimates for the projects in their service territory have been given, but they are optimistic about their track record in constructing and operating similar projects.

The speaker discusses the success of partnering with various organizations to deliver projects and provides a timeline for the Tranche 1 and 2.1 projects. They also mention the potential for overlapping projects and the potential for more projects in the future. A question is asked about data center construction and the speaker acknowledges the potential for more opportunities and states that they are currently reviewing thousands of megawatts of potential projects.

The company has started initial processes for the construction of a 250-megawatt data center, with an expected start date in 2026 and ramping up through 2028. They are also pursuing other economic development opportunities, including manufacturing and smaller data centers. If the load grows, they may need to update their IRP in February of next year. The CEO adds that there is a concentration of interest in Missouri and they will continue to assess the impact on their sales and generation portfolio.

The St. Louis region has seen positive growth in sales and job creation, which bodes well for the company's future. There have been recent developments such as the IRP and Tranche 2 visibility to MISO, as well as improved stock performance, which could potentially improve the company's earnings per share growth. Overall, the company aims to continue its track record of delivering earnings at or above the midpoint of its growth range.

The company's demand outlook has improved and they are excited about their transmission investment prospects. They have a strong balance sheet and are proud of their team's accomplishments in the second quarter. The company also remains focused on customer affordability and has put cost-saving initiatives in place. The recent changes in the Chevron doctrine may have far-reaching implications, but it does not affect any prior cases.

The speaker believes that the recent Supreme Court ruling will have far-reaching impacts on ongoing rule makings and court reviews related to FERC and EPA. They are unsure of how it will specifically affect these matters and will leave it to lawyers to assess. The speaker also discusses the potential for economic development opportunities in their service areas, but they will be conservative in incorporating them into their guidance. They highlight the strengths of both Missouri and Illinois in attracting these opportunities.

The speaker discusses the status of their company's incentives and opportunities in Missouri. They mention a specific data center project that has a construction agreement and will be included in their sales guidance. They also mention positive developments in regulatory approvals and a desire for dispatchable resources in the state. Overall, they see a constructive regulatory environment in Missouri.

The speaker discusses the upcoming IRP update and the potential impact of load growth and EPA regulations on resource mix. They mention a mix of dispatchable assets and renewable resources in the current plan and the possibility of adding more renewables and natural gas in the short-term. The speaker also acknowledges the need to consider the EPA's proposed greenhouse gas rules in the long-term.

The speaker discusses the implications of environmental rules on carbon capture and co-firing at their planned energy facilities. They are uncertain about the impact of these rules and are considering potential regret moves to increase flexibility. The speaker also briefly mentions the MISO Tranche 2.2 and how it came about, but does not have any information on its sizing compared to Tranche 2.1 and Tranche 1.

The speaker discusses the logical order in which infrastructure projects should be built in the Midwest region, taking into account the region's clean energy goals and potential relocation of generation facilities and load. They mention a potential 345 line in Missouri and the need for more investment in the southern part of Illinois and Indiana. However, it is premature to speculate on the size and specifics of these projects as they are still being finalized by MISO. The speaker clarifies that without the effects of weather and EMEA, sales growth would be up 2%.

The residential, commercial, and industrial sectors have seen a 2.2% overall increase in energy usage compared to last year. This is due to a stronger energy efficiency impact and some price variance. The weather has been normal so far this year. The company is working on a new IRP and has seen positive developments.

The speaker is not able to give a specific range for the increase in the IRP at this time. They are currently going through their planning process and will have a better idea in the fall. They mention a 250-megawatt project that would represent a 40% increase in industrial sales and a 5% increase in Missouri's retail sales. They also mention that they are able to serve the data center with their current resources and planned additions, but the IRP update will consider potential changes in light of thousands of megawatts in the queue.

The speaker is asking how the company's new resources will impact consumers and rates, and if there is an economic development aspect to consider. The company's current tariffs are in place to ensure fair allocation of costs among customer classes, but as more megawatts are added, they will need to consider appropriate tariffs. The speaker also mentions the impact of PJM capacity auction and how regulators in Illinois have recently slowed down CapEx spending.

The speaker acknowledges that the person they are speaking to may not be familiar with PJM capacity prices, but believes that Illinois regulators may change their view and recognize the importance of adding infrastructure to support customer growth. They mention that both states are concerned about reliability and resource adequacy, and as cost pressures and economic growth continue, policies may shift to support these concerns. The speaker also provides a rule of thumb for the impact of industrial sales on EPS and discusses the efforts being made to attract large load customers and what they need from ratemaking.

Marty Lyons, the CFO of Evergy, discusses the potential for adding data centers and other industrial customers to their current industrial tariffs, which would not require any special tariffs. They may need to consider special tariffs in the future if these opportunities come to fruition. They have experience working with the commission to put special tariffs in place, as seen with the Cass County Solar project. They also pursued an extension of PSA to dispatchable generation, but it did not pass in the last legislative session. They expect strong support for it in the next session. Analyst Julien Dumoulin-Smith asks about the process for potentially procuring shorter-term contracts.

Marty Lyons discusses the process for dealing with the 250-megawatt opportunity and the potential for expediting it. He mentions that they are actively working with stakeholders to support the location of these facilities in Missouri and Illinois. The opportunity is expected to ramp up in 2026 and they plan to update the IRP to potentially accelerate planned additions and add additional resources to serve the load. However, there may be limitations to this plan.

The speaker discusses plans for an 800-megawatt simple cycle to be put in place within 4 years. They also mention the potential for working with data center opportunities and updating the IRP. They claim to have flexibility in making changes to tariffs, both within and outside of a rate review. The speaker also addresses concerns about coal ash and assures that it is not a significant issue for them. They have been proactive in addressing this issue and do not have much exposure to it. The speaker concludes by thanking the audience and expressing their focus on strong execution for the rest of the year.

You are allowed to disconnect your lines now. We appreciate your involvement.

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