Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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Item 2. MANAGEMENT’S 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 10-Q, as well as Management’s 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 of Ameren as a whole. Also see the Glossary of Terms and Abbreviations at the front of this report and in the Form 10-K.

Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Ameren also has other subsidiaries that conduct other activities, such as providing shared services.

  • Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.

  • 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 MISO.

Ameren’s and Ameren Missouri’s 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 Missouri’s 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 Ameren’s earnings. We believe this per share information helps readers to understand the impact of these factors on Ameren’s earnings per share.

OVERVIEW

Net income attributable to Ameren common shareholders in the three months ended March 31, 2024, was $261 million, or $0.98 per diluted share, compared with $264 million, or $1.00 per diluted share, in the year-ago period. Net income for the three months ended March 31, 2024, was unfavorably affected by increased other operations and maintenance expenses not subject to formula rates, riders, or trackers, including a charge recorded by Ameren Missouri related to a change in the estimated minimum cost of additional mitigation relief associated with NSR and Clean Air Act litigation applicable to the Rush Island Energy Center. Earnings for the three months ended March 31, 2024, were also unfavorably affected by increased income tax expense, primarily due to a decrease in income tax benefits at Ameren (parent) related to stock-based compensation; an increase in the weighted-average basic common shares outstanding; and a lower recognized ROE at Ameren Illinois Electric Distribution. Net income for the three months ended March 31, 2024, was favorably affected by increased base rate revenues pursuant to the ICC's November 2023 natural gas rate order and increased base rate revenues pursuant to the MoPSC's June 2023 electric rate order, which increased earnings at Ameren Illinois Natural Gas and Ameren Missouri, respectively. Earnings for the three months ended March 31, 2024, were also favorably affected by increased rate base investments at Ameren Transmission.

Ameren’s strategic plan includes investing in rate-regulated energy infrastructure, enhancing regulatory frameworks and advocating for responsible policies, and optimizing operating performance to capitalize on opportunities to benefit our customers, communities, shareholders, and the environment. Ameren remains focused on disciplined cost management and strategic capital allocation. Ameren invested $0.9 billion in its rate-regulated businesses in the three months ended March 31, 2024.

In March 2024, the MoPSC issued an order approving a nonunanimous stipulation and agreement related to requested CCNs for the Split Rail, Vandalia, and Bowling Green solar projects. The stipulation and agreement also requested approval of a CCN for the Cass County Solar Project, conditioned upon full subscription of the project capacity under the Renewable Solutions Program, a commercial, industrial, and governmental customer program. Ameren Missouri expects a decision by the MoPSC on the Cass County Solar Project CCN once this project’s capacity under the Renewable Solutions Program is fully subscribed. In February and April 2023, the MoPSC issued orders approving requested CCNs for the Huck Finn and Boomtown solar projects, respectively.

In February 2024, 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 2024. The plan is designed to upgrade Ameren Missouri’s electric infrastructure and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $12.4 billion over the five-year period from 2024 through 2028, with expenditures largely recoverable under the PISA. Ameren Missouri’s Smart Energy Plan excludes investments in its natural gas distribution business, as well as removal costs, net of salvage.

In January 2024, Ameren Missouri filed a proposed customer energy-efficiency plan with the MoPSC under the MEEIA. This filing proposed a three-year plan, which includes a portfolio of customer energy-efficiency programs, along with 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 revenues and the amounts collected from customers. If the plan is approved, Ameren Missouri intends to invest $123 million annually in the proposed customer energy-efficiency programs from 2025 to 2027. In addition, Ameren Missouri requested performance incentives applicable to each plan year to earn revenues by achieving certain customer energy-efficiency savings and target spending goals. If 100% of the goals are achieved, Ameren Missouri would earn performance incentive revenues totaling $56 million over the three-year plan. Ameren Missouri also requested additional performance incentives applicable to each plan year totaling up to $14 million over the three-year plan, if Ameren Missouri exceeds 100% of the goals. Ameren Missouri expects a decision by the MoPSC by October 2024, but cannot predict the ultimate outcome of this regulatory proceeding.

In November 2023, Ameren Missouri petitioned the MoPSC for a financing order to authorize the issuance of securitized utility tariff bonds to finance $519 million of costs related to the planned accelerated retirement of the Rush Island Energy Center, which includes the expected remaining unrecovered net plant balance associated with the facility, among other costs. Ameren Missouri requested to collect the amounts necessary to repay the bonds over approximately 15 years from the date of bond issuance. In March 2024, the MoPSC staff filed an updated response to Ameren Missouri’s petition that stated Ameren Missouri’s decision to accelerate the retirement of the Rush Island Energy Center was prudent and recommended that $497 million of costs be financed through securitized utility tariff bonds. However, the MoPSC staff claimed Ameren Missouri’s prior actions that resulted in the adverse ruling in the NSR and Clean Air Act Litigation discussed in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report, were imprudent and recommended that the impact of those actions on customers be considered in future regulatory proceedings. In February 2024, the MoOPC filed a response to Ameren Missouri’s petition that opposes the issuance of securitized utility tariff bonds. If Ameren Missouri is not allowed to recover Rush Island Energy Center costs through securitization or if future regulatory proceedings result in revenue reductions based on Ameren Missouri’s prior actions that resulted in the adverse ruling in the NSR and Clean Air Act litigation, it could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Ameren Missouri expects a decision by the MoPSC by the end of June 2024, but cannot predict the ultimate outcome of this regulatory proceeding.

In September 2023, the United States District Court for the Eastern District of Missouri granted Ameren Missouri’s request to modify a September 2019 remedy order issued by the district court in order to allow the retirement of the Rush Island Energy Center in advance of its previously expected retirement date of 2039, in lieu of installing a flue gas desulfurization system. In its amended remedy order, the district court established an October 15, 2024 retirement date to allow for the completion of various transmission reliability projects and, in the interim, authorized Ameren Missouri to operate the energy center only as needed and as directed by the MISO. The United States Department of Justice is seeking an order from the district court providing for additional mitigation relief related to prior emissions. Ameren Missouri contends that the retirement of the Rush Island Energy Center, which eliminates all future emissions from the energy center, mitigates claims relating to prior emissions. In March 2024, the district court ordered Ameren Missouri and the United States Department of Justice to file proposed draft orders outlining additional mitigation relief. In May 2024, Ameren Missouri filed a proposed draft order that includes retiring the Rush Island Energy Center, a program to provide electric buses and charging stations to schools in the metro St. Louis area, a program to provide air filters to eligible Ameren Missouri electric residential customers, and the retirement of SO2 allowances. Excluding the accelerated retirement of the Rush Island Energy Center, these programs are estimated to cost approximately $20 million. Also in May 2024, the United States Department of Justice filed a proposed draft order that includes a program to provide electric buses and charging stations to schools in the metro St. Louis area and a program to provide air filters to eligible Ameren Missouri electric residential customers. These programs include a significantly greater number of buses, charging stations, and air filters than Ameren Missouri’s proposal and the United States Department of Justice estimates these programs would cost approximately $120 million. As of March 31, 2024, Ameren and Ameren Missouri recorded a $20 million liability related to the cost of potential additional mitigation, which represents the estimated minimum liability, as no other amount within the range was a better estimate. The district court is expected to hold a hearing in mid-2024 and an order is expected in the second half of 2024. Depending on the scope and basis of the order, Ameren Missouri or the United States Department of Justice could appeal any additional mitigation relief ordered.

In April 2024, Ameren Illinois filed for a reconciliation adjustment to its 2023 electric distribution service revenue requirement with the ICC, requesting recovery of $160 million. The reconciliation adjustment reflects a capital structure composed of 50% common equity and Ameren Illinois’ actual 2023 recoverable costs and year-end rate base. An ICC decision in this proceeding is required by December 2024, and any approved adjustment would be collected from customers in 2025. This is the final revenue requirement reconciliation under the IEIMA formula framework.

In December 2023, the ICC issued an order in Ameren Illinois' MYRP proceeding approving base rates for electric distribution services for 2024 through 2027 and rejecting Ameren Illinois' Grid Plan, which was addressed as part of the MYRP proceeding. Rate changes consistent with the order became effective in January 2024. The December 2023 order adopted an alternative methodology to establish a rate base and revenue requirements for the years 2024 through 2027 using Ameren Illinois’ previously approved 2022 year-end rate base. The 2022 year-end rate base will remain in effect through 2027 unless subsequently changed by the ICC in the rehearing discussed below or if approval of a revised Grid Plan results in an update of each year’s revenue requirement. Pursuant to the order, in March 2024, Ameren Illinois filed a revised Grid Plan and a revised MYRP to update the requested revenue requirements for 2024 through 2027. An ICC decision on the revised Grid Plan and updated revenue requirements is expected by December 2024 with rates effective in January 2025.

In January 2024, the ICC partially denied a rehearing requested by Ameren Illinois to revise the allowed ROE in the December 2023 order and granted Ameren Illinois’ rehearing request to consider whether it is appropriate to use the 2022 year-end rate base for each year of the MYRP and to include a base level of investments to maintain grid reliability in each year of the MYRP. Additionally, the scope of the rehearing includes a review of certain operations and maintenance expenses in each year of the MYRP. In February 2024, Ameren Illinois filed its request in the rehearing proceeding, and subsequently updated the request in April 2024, proposing an updated 2024 revenue requirement of $1,213 million, which is based on a $4.2 billion rate base, a capital structure composed of 50% common equity, and an allowed ROE of 8.72%. In April 2024, the ICC staff filed its recommendation in the rehearing proceeding. The ICC staff recommended a 2024 revenue requirement of $1,195 million, which is based on a $4.0 billion rate base, a capital structure composed of 50% common equity, and an allowed ROE of 8.72%. An ICC decision in the rehearing proceeding is expected by late June 2024, with new rates effective July 2024. Also, in January 2024, Ameren Illinois filed an appeal of the December 2023 ICC order and the partial denial of Ameren Illinois’ request for rehearing, including the 8.72% ROE, to the Illinois Appellate Court for the Fifth Judicial District. The court is under no deadline to address the appeal. Ameren Illinois cannot predict the ultimate outcome of the revised Grid Plan filing, its request to update the associated MYRP revenue requirements for 2024 through 2027, the rehearing proceeding, or the appeal to the Illinois Appellate Court for the Fifth Judicial District.

In November 2023, the ICC issued an order in Ameren Illinois’ January 2023 natural gas delivery service regulatory rate review, which resulted in an increase to its annual revenues for natural gas delivery service of $112 million based on a 9.44% allowed ROE, a capital structure composed of 50% common equity, and a rate base of approximately $2.85 billion. The order reflected a reduction of approximately $93 million of planned distribution and transmission capital investments included in Ameren Illinois’ requested revenue increase, which used a 2024 future test year. The new rates became effective on November 28, 2023. In December 2023, Ameren Illinois filed a request for rehearing of the ICC’s November 2023 order. The filing requested the ICC revise the order to include an allowed ROE of at least 9.89%, a capital structure composed of 52% common equity, and the reversal of the approximately $93 million reduction of planned distribution and transmission capital investments included in the order, among other things. In January 2024, the ICC denied Ameren Illinois’ rehearing

request. Subsequently, in January 2024, Ameren Illinois filed an appeal of the November 2023 ICC order and the January 2024 ICC denial of Ameren Illinois’ request for rehearing to the Illinois Appellate Court for the Fifth Judicial District. The court is under no deadline to address the appeal. Ameren Illinois cannot predict the ultimate outcome of this appeal.

In 2021, the MISO issued a report outlining a preliminary long-range transmission planning roadmap of projects through 2039, which considers the rapidly changing generation mix within MISO 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 July 2022, the MISO approved the first tranche of projects under the roadmap. A portion of these projects were assigned to various utilities, of which Ameren was awarded projects that are estimated to cost approximately $1.8 billion, based on the MISO’s cost estimate. Related to these projects, Ameren began substation upgrades in May 2024 in advance of transmission line construction, which is expected to begin in 2026, with forecasted completion dates near the end of this decade. In 2022 and 2023, the MISO initiated requests for proposals for first tranche competitive bid projects. In October and November 2023, two first tranche competitive bid projects were awarded to ATXI and represent a total estimated investment of approximately $0.1 billion. In April 2024, the remaining first tranche competitive-bid project was awarded to ATXI and represents an estimated investment of approximately $0.3 billion. ATXI will own 51% of the assets associated with the projects awarded in October 2023 and April 2024, and the remaining 49% of the assets will be owned by an unaffiliated entity. In February 2024, Ameren Illinois and ATXI filed a request for a CCN, among other things, with the ICC related to the portion of the MISO long-range transmission projects discussed above that will be constructed within the ICC’s jurisdiction. A decision by the ICC is expected by mid-2025. In March 2024, the MISO preliminarily identified a second tranche of projects with estimated costs of $17 billion to $23 billion based on MISO’s cost estimate. The MISO is expected to approve the second tranche of projects in the third quarter of 2024.

For further information on the matters discussed above, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report, and the Outlook section below.

RESULTS OF OPERATIONS

Our results of operations and financial position are affected by many factors. Economic conditions, 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 and by weather conditions, such as storms, 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, our pension and postretirement benefits costs, the cash surrender value of COLI, and the asset value of Ameren Missouri’s nuclear decommissioning trust fund. Almost all of Ameren’s 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 Matters under Part I, Item 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for additional information regarding Ameren Missouri’s, Ameren Illinois’, and ATXI’s regulatory mechanisms.

We are observing inflationary pressures on the prices of labor, services, materials, and supplies, as well as high interest rates. 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, formula ratemaking, and future test years, as applicable, mitigates our exposure.

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 for Ameren Illinois’ electric distribution business, and a FAC for Ameren Missouri’s electric business.

We employ various risk management strategies to reduce our exposure to commodity risk and other risks inherent in our business. The reliability of Ameren Missouri’s 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.

Earnings Summary

The following table presents a summary of Ameren’s earnings for the three months ended March 31, 2024 and 2023:

Three Months
20242023
Net income attributable to Ameren common shareholders$261$264
Earnings per common share – diluted0.981.00

Net income attributable to Ameren common shareholders decreased $3 million, or 2 cents per diluted share, in the three months ended March 31, 2024, compared with the year-ago period. The decrease was due to net income decreases of $15 million, $5 million, and $3 million as activity not reported as part of a segment, primarily at Ameren (parent), Ameren Illinois Electric Distribution, and Ameren Missouri, respectively. These decreases were partially offset by net income increases of $19 million and $1 million at Ameren Illinois Natural Gas and Ameren Transmission, respectively.

Earnings per diluted share were unfavorably affected in the three months ended March 31, 2024, compared to the year-ago period, by:

*•*a charge recorded by Ameren Missouri, included in other operation and maintenance expenses, related to an increase in the estimated minimum cost of additional mitigation relief associated with NSR and Clean Air Act litigation applicable to the Rush Island Energy Center, see Note 9 - Commitments and Contingencies under Part 1, Item 1, of this report for more information (4 cents per share);

  • increased income tax expense not subject to formula rates or riders, primarily due to a decrease in income tax benefits at Ameren (parent) related to stock-based compensation (4 cents per share);

*•*increased other operations and maintenance expenses not subject to formula rates, riders, or trackers, primarily at Ameren Missouri, excluding a charge related to an increase in the estimated minimum cost of additional mitigation relief discussed above (3 cents per share);

  • increased financing costs at Ameren Missouri primarily due to higher long term debt balances and interest rates (3 cents per share);

  • lower revenue at Ameren Illinois Electric Distribution due to a lower recognized ROE under the MYRP (2 cents per share);

  • 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, of this report, and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K (2 cents per share); and

  • increased taxes other than income taxes, primarily at Ameren Missouri, largely resulting from the absence in 2024 of employee retention tax credits received under the Coronavirus Aid, Relief, and Economic Security Act (1 cent per share).

Earnings per diluted share were favorably affected in the three months ended March 31, 2024, compared to the year-ago period, by:

*•*increased base rate revenues at Ameren Illinois Natural Gas effective November 28, 2023, pursuant to the November 2023 ICC natural gas rate order, partially offset by increased depreciation and amortization expenses included in base rates (4 cents per share);

  • increased base rate revenues at Ameren Missouri effective July 9, 2023, pursuant to the June 2023 MoPSC electric rate order, partially offset by the net effect of amortization of previously deferred depreciation expense under the PISA and RESRAM, financing costs otherwise recoverable under the PISA and RESRAM, a lower base level of expenses included in trackers, and the net recovery for amounts associated with the reduction in sales volumes resulting from MEEIA programs (4 cents per share);

*•*increased allowance for equity funds used during construction and increased base rate revenues for the inclusion of previously deferred PISA and RESRAM interest charges pursuant to the June 2023 MoPSC electric rate order effective July 9, 2023, partially offset by increased interest charges resulting from lower deferrals related to infrastructure investments associated with the PISA and RESRAM, both at Ameren Missouri (3 cents per share);

  • a change in rate design at Ameren Illinois Natural Gas pursuant to the November 2023 ICC natural gas rate order that concentrates more revenues in the winter heating season due to an increase in volumetric rates, which increased earnings for the three months ended March 31, 2024, but is not expected to materially impact full year results (3 cents per share);

*•*increased rate base investments at Ameren Transmission, which increased earnings in this segment (3 cents per share); and

  • increased retail electric sales volumes at Ameren Missouri, excluding the estimated effects of weather and customer energy-efficiency programs, partially offset by lower sales volumes due to milder winter temperatures in 2024 (estimated at 2 cents 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, 2023, and do not reflect the impact of dilution on earnings per share, unless otherwise noted. The amounts above other than variances related to income taxes have been presented net of income taxes using Ameren’s 2024 blended federal and state statutory tax rate of 26%. For additional details regarding the Ameren Companies’ results of operations, including explanations of Operating Revenues for both Electric Revenues and Natural Gas Revenues; Fuel and Purchased Power Expenses; 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.

Below is Ameren’s table of income statement components by segment for the three months ended March 31, 2024 and 2023:

Ameren MissouriAmeren Illinois Electric DistributionAmeren Illinois Natural GasAmeren TransmissionOther / Intersegment EliminationsAmeren
Three Months 2024:
Electric revenues$714$506$—$185$(41)$1,364
Natural gas revenues61—391——452
Fuel and purchased power(166)(192)——30(328)
Natural gas purchased for resale(28)—(123)——(151)
Other operations and maintenance expenses(254)(136)(58)(19)(3)(470)
Depreciation and amortization expenses(195)(93)(33)(39)(1)(361)
Taxes other than income taxes(87)(17)(26)(2)(3)(135)
Operating income (loss)4568151125(18)371
Other income, net4422721489
Interest charges(62)(22)(15)(29)(26)(154)
Income (taxes) benefit(1)(12)(37)(26)32(44)
Net income2656106722262
Noncontrolling interests – preferred stock dividends(1)————(1)
Net income attributable to Ameren common shareholders$25$56$106$72$2$261
Three Months 2023:
Electric revenues$841$624$—$163$(38)$1,590
Natural gas revenues82—391—(1)472
Fuel and purchased power(321)(315)——28(608)
Natural gas purchased for resale(47)—(161)——(208)
Other operations and maintenance expenses(239)(129)(59)(16)(5)(448)
Depreciation and amortization expenses(176)(84)(26)(33)(1)(320)
Taxes other than income taxes(80)(18)(23)(2)(4)(127)
Operating income (loss)6078122112(21)351
Other income, net1924862178
Interest charges(51)(21)(13)(22)(20)(127)
Income (taxes) benefit1(20)(30)(25)37(37)
Net income2961877117265
Noncontrolling interests – preferred stock dividends(1)————(1)
Net income attributable to Ameren common shareholders$28$61$87$71$17$264

Below is Ameren Illinois’ table of income statement components by segment for the three months ended March 31, 2024 and 2023:

Ameren Illinois Electric DistributionAmeren Illinois Natural GasAmeren Illinois TransmissionOther / Intersegment EliminationsAmeren Illinois
Three Months 2024:
Electric revenues$506$—$131$(28)$609
Natural gas revenues—391——391
Purchased power(192)——28(164)
Natural gas purchased for resale—(123)——(123)
Other operations and maintenance expenses(136)(58)(16)—(210)
Depreciation and amortization expenses(93)(33)(27)—(153)
Taxes other than income taxes(17)(26)(1)—(44)
Operating income6815187—306
Other income, net2272—31
Interest charges(22)(15)(18)—(55)
Income taxes(12)(37)(18)—(67)
Net income attributable to common shareholder$56$106$53$—$215
Three Months 2023:
Electric revenues$624$—$114$(28)$710
Natural gas revenues—391——391
Purchased power(315)——28(287)
Natural gas purchased for resale—(161)——(161)
Other operations and maintenance expenses(129)(59)(14)—(202)
Depreciation and amortization expenses(84)(26)(23)—(133)
Taxes other than income taxes(18)(23)(1)—(42)
Operating income7812276—276
Other income, net2485—37
Interest charges(21)(13)(13)—(47)
Income taxes(20)(30)(18)—(68)
Net income attributable to common shareholder$61$87$50$—$198

Operating Revenues

The following table presents the increases (decreases) by Ameren segment for electric and natural gas revenues, for the three months ended March 31, 2024, compared with the year-ago period:

Three MonthsAmeren MissouriAmeren Illinois Electric DistributionAmeren Illinois Natural GasAmeren Transmission**(a)**Other /Intersegment EliminationsAmeren
Electric revenue change:
Base rates (estimate)(b)$29$8$—$19$—$56
Effect of weather (estimate)(c)(6)————(6)
Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA)16————16
Off-system sales, capacity, and FAC revenues, net(151)————(151)
Ameren Illinois energy-efficiency program investment revenues—4———4
Electric deferred income tax adjustment(d)—(5)———(5)
Other(3)(2)—3(1)(3)
Cost recovery mechanisms – offset in fuel and purchased power(e)(17)(123)——(2)(142)
Other cost recovery mechanisms(f)5————5
Total electric revenue change$(127)$(118)$—$22$(3)$(226)
Natural gas revenue change:
Base rates (estimate)$—$—$24$—$—$24
Change in rate design (estimate)——11——11
Effect of weather (estimate)(c)1————1
Other——3—14
Cost recovery mechanisms – offset in natural gas purchased for resale(e)(21)—(38)——(59)
Other cost recovery mechanisms(f)(1)————(1)
Total natural gas revenue change$(21)$—$—$—$1$(20)

(a)Includes an increase in transmission revenues of $17 million at Ameren Illinois for the three months ended March 31, 2024, compared with the year-ago period.

(b)For Ameren Illinois Electric Distribution and Ameren Transmission, base rates include increases or decreases in operating revenues related to the revenue requirement reconciliation adjustment under formula rates. For Ameren Missouri, base rates exclude an increase for the recovery of lost electric revenue, less the associated fuel and purchased power expenses, resulting from the MEEIA customer energy-efficiency programs and a decrease in base rates for RESRAM. These changes in Ameren Missouri base rates are included in the “Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA)” and “Cost recovery mechanisms - offset in fuel and purchased power” line items, respectively.

(c)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 Atmospheric Administration weather stations at local airports in our service territories.

(d)The electric deferred income tax adjustment relates to the remaining balance of certain excess deferred income taxes that will be amortized through 2025. Offsetting expense increases or decreases are reflected within the "Income Taxes" section of the statement of income. This item has no overall impact on earnings.

(e)Electric and natural gas revenue changes are offset by corresponding changes in “Fuel and purchased power” and “Natural gas purchased for resale” on the statement of income. 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, of this report for additional information on intersegment eliminations. These items have no overall impact on earnings.

(f)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 of the statement of income. These items have no overall impact on earnings.

Electric Revenues

Ameren

Ameren’s electric revenues decreased $226 million, or 14%, for the three months ended March 31, 2024, compared with the year-ago period, primarily due to decreased revenues at Ameren Missouri and Ameren Illinois Electric Distribution, partially offset by increased revenues at Ameren Transmission, as discussed below.

Ameren Transmission

Ameren Transmission’s electric revenues increased $22 million, or 13%, for the three months ended March 31, 2024, compared with the year-ago period. Revenues were favorably affected by higher recoverable expenses (+$10 million), increased capital investment

(+$9 million), as evidenced by a 14% increase in rate base used to calculate the revenue requirement, and increased facility rental revenues (+$3 million) related to ATXI’s transmission operations control center, which was placed in service in December 2023. ATXI provides affiliates with access to this facility. Rental revenues associated with this facility are affiliate transactions and eliminated in consolidation for Ameren’s consolidated financial statements. See Note 8 – Related-party Transactions under Part I, Item 1, of this report for additional information.

Ameren Missouri

Ameren Missouri’s electric revenues decreased $127 million, or 15%, for the three months ended March 31, 2024, compared with the year-ago period.

The following items decreased Ameren Missouri’s electric revenues between periods:

•“Off-system sales, capacity and FAC revenues, net” decreased $151 million due to lower capacity prices, (-$156 million) which were set by the annual MISO auction in April 2023 and became effective June 2023, partially offset by higher off-system sales revenue

(+$5 million). Ameren Missouri’s 5% exposure to net energy cost variances under the FAC is included within “Off-system sales, capacity, and FAC revenues, net” and “Energy costs (excluding the estimated effect of weather)” in fuel and purchased power.

  • Revenues associated with “Cost recovery mechanisms – offset in fuel and purchased power” decreased $17 million due to decreased revenue related to the amortization of costs previously deferred under the FAC that were reflected in customer rates. The changes to “Cost recovery mechanisms - offset in fuel and purchased power” are fully offset by “Cost recovery mechanisms - offset in electric revenue” in fuel and purchased power.

  • Winter temperatures were warmer as heating degree days decreased 4%, which decreased revenues an estimated $6 million.

The following items increased Ameren Missouri’s electric revenues between periods:

*•*Higher electric base rates, resulting from the June 2023 MoPSC electric rate order effective July 9, 2023, increased revenues an estimated $29 million.

  • Excluding the estimated effects of weather and the MEEIA customer energy-efficiency programs, electric revenues increased an estimated $16 million, due to an increase in retail sales volumes, which were, in part, favorably affected by an additional day in 2024 as a result of the leap year.

  • Revenues associated with other cost recovery mechanisms increased $5 million, primarily due to an increase in RESRAM revenues and an increase in excise taxes due to an increase in retail sales revenue.

Ameren Illinois

Ameren Illinois’ electric revenues decreased $101 million, or 14%, for the three months ended March 31, 2024, compared with the year-ago period, driven by decreased revenues at Ameren Illinois Electric Distribution, partially offset by increased revenues at Ameren Illinois Transmission.

Ameren Illinois Electric Distribution

Ameren Illinois Electric Distribution’s revenues decreased $118 million, or 19%, for the three months ended March 31, 2024, compared with the year-ago period.

The following items decreased Ameren Illinois Electric Distribution’s revenues between periods:

  • Revenues associated with “Cost recovery mechanisms – offset in fuel and purchased power” decreased $123 million due to decreased recovery of purchased power expenses. The decrease in electric revenues is fully offset by a decrease in purchased power expenses under cost recovery mechanisms for purchased power, as discussed below.

  • Pursuant to an ICC order, revenues decreased $5 million due to changes in the amortization rate for certain excess deferred income taxes.

The following items increased Ameren Illinois Electric Distribution’s revenues between periods:

*•*Base rates increased revenues by $8 million due to higher recoverable non-purchased power expenses (+$13 million), partially offset by a lower recognized ROE (-$5 million). The MYRP utilizes a fixed ROE approved by the ICC of 8.72%, with adjustments for any performance incentives and penalties, while the IEIMA formula-based ROE was based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points (estimated at 9.61% for the three months ended March 31, 2023).

  • Revenues increased $4 million due to the recovery of and return on increased energy-efficiency program investments under performance-based formula ratemaking.

Ameren Illinois Transmission

Ameren Illinois Transmission’s revenues increased $17 million, or 15%, for the three months ended March 31, 2024, compared with the year-ago period. Base rate revenues were favorably affected by higher recoverable expenses (+$11 million) and increased capital investment (+$6 million), as evidenced by a 15% increase in rate base used to calculate the revenue requirement.

Natural Gas Revenues

Ameren

Ameren’s natural gas revenues decreased $20 million, or 4%, for the three months ended March 31, 2024, compared with the year-ago period, primarily due to decreased revenues at Ameren Missouri, as discussed below.

Ameren Missouri

Ameren Missouri’s natural gas revenues decreased $21 million, or 26%, for the three months ended March 31, 2024, compared with the year-ago period. Revenues associated with “Cost recovery mechanisms – offset in natural gas purchased for resale” decreased $21 million due to lower commodity prices and the absence of amortization of natural gas costs deferred under the PGA related to the extremely cold weather in mid-February 2021. The decrease in natural gas revenues under the PGA are fully offset by a decrease in natural gas purchased for resale expenses.

Ameren Illinois Natural Gas

Ameren Illinois Natural Gas’ revenues were comparable between periods. “Cost recovery mechanisms – offset in natural gas purchased for resale” decreased revenues $38 million for the three months ended March 31, 2024, due to lower collection of natural gas costs previously deferred under the PGA. The decrease in natural gas revenues under the PGA are fully offset by a decrease in natural gas purchased for resale expenses.

The following items increased Ameren Illinois Natural Gas’ revenues between periods:

  • Revenues increased an estimated $24 million due to higher natural gas base rates as a result of the November 2023 natural gas rate order.

  • Revenues increased an estimated $11 million due to a change in rate design as a result of the November 2023 natural gas rate order. This change in rate design concentrates more revenues in the winter heating season due to an increase in volumetric rates and a decrease in fixed customer rates. As such, the change is not expected to materially affect annual earnings comparisons.

Fuel and Purchased Power

The following table presents the increases (decreases) by Ameren segment for fuel and purchased power for the three months ended March 31, 2024, compared with the year-ago period:

Three MonthsAmeren MissouriAmeren Illinois Electric DistributionAmeren Illinois Natural GasAmeren TransmissionOther /Intersegment EliminationsAmeren
Fuel and purchased power change:
Energy costs (excluding the estimated effect of weather)$(148)$—$—$—$—$(148)
Effect of weather (estimate)(a)(1)————(1)
Effect of higher net energy costs included in base rates11————11
Cost recovery mechanisms – offset in electric revenue(b)(17)(123)——(2)(142)
Total fuel and purchased power change$(155)$(123)$—$—$(2)$(280)

(a)Represents the estimated variation resulting primarily from changes in cooling and heating degree-days on electric demand compared with the year-ago period; this variation is based on temperature readings from the National Oceanic and Atmospheric Administration weather stations at local airports in our service territories.

(b)“Cost recovery mechanisms — offset in electric revenue” changes are offset by corresponding changes in “Cost recovery mechanisms — offset in fuel and purchased power” in electric revenues. 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, of this report for additional information on intersegment eliminations. These items have no overall impact on earnings.

Ameren

Ameren Missouri and Ameren Illinois are generally allowed to pass on to customers prudently incurred costs for fuel and purchased power. Ameren’s electric fuel and purchased power expenses decreased $280 million, or 46%, for the three months ended March 31, 2024, compared with the year-ago period, primarily due to decreased fuel and purchased power expenses at Ameren Missouri and Ameren Illinois Electric Distribution, as discussed below.

Ameren Missouri

Ameren Missouri’s fuel and purchased power expenses decreased $155 million, or 48%, for the three months ended March 31, 2024, compared with the year-ago period.

The following items decreased Ameren Missouri’s fuel and purchased power expense:

  • Energy costs decreased $148 million due to decreased capacity prices (-$149 million), which were set by the annual MISO auction in April 2023 and became effective June 2023, and lower fuel costs (-$7 million), partially offset by increased purchased power expense

(+$5 million) and decreased deferrals under the FAC (+$3 million). Ameren Missouri’s 5% exposure to net energy cost variances under the FAC is included within “Energy costs (excluding the estimated effect of weather)” and “Off-system sales, capacity, and FAC revenues, net” in electric revenues.

  • “Cost recovery mechanisms — offset in electric revenue” decreased $17 million due to decreased amortization of costs previously deferred under the FAC. The changes to “Cost recovery mechanisms - offset in electric revenue” are fully offset by “Cost recovery mechanisms - offset in fuel and purchased power” in electric revenues.

Ameren Missouri’s fuel and purchased power expenses increased $11 million due to the effect of higher net energy costs included in base rates as a result of the June 2023 MoPSC electric rate order.

Ameren Illinois Electric Distribution

Ameren Illinois Electric Distribution’s purchased power expenses decreased $123 million, or 39%, for the three months ended March 31, 2024, compared with the year-ago period, primarily due to decreased energy prices (-$57 million), which largely reflect the results of IPA procurement events, decreased capacity prices (-$39 million), which were set by the annual MISO auction in April 2023 and became effective in June 2023, and lower volumes (-$28 million) primarily due to residential and small commercial customers switching from Ameren Illinois’ supplied power to alternative retail electric suppliers. The changes to “Cost recovery mechanisms - offset in electric revenue” are fully offset by “Cost recovery mechanisms - offset in fuel and purchased power” in electric revenues.

Natural Gas Purchased for Resale

The following table presents the increases (decreases) by Ameren segment for natural gas purchased for resale, for the three months ended March 31, 2024, compared with the year-ago period:

Three MonthsAmeren MissouriAmeren Illinois Electric DistributionAmeren Illinois Natural GasAmeren TransmissionOther /Intersegment EliminationsAmeren
Natural gas purchased for resale change:
Effect of weather (estimate)(a)$2$—$—$—$—$2
Cost recovery mechanisms – offset in natural gas revenue(b)(21)—(38)——(59)
Total natural gas purchased for resale change$(19)$—$(38)$—$—$(57)

(a)Represents the estimated variation resulting primarily from changes in cooling and heating degree-days on natural gas demand compared with the year-ago period; this variation is based on temperature readings from the National Oceanic and Atmospheric Administration weather stations at local airports in our service territories.

(b)Natural gas purchased for resale changes are offset by corresponding changes in “Natural gas revenues” on the statement of income. These items have no overall impact on earnings.

Ameren

Ameren Missouri and Ameren Illinois are generally allowed to pass on to customers prudently incurred costs for natural gas purchased for resale. Ameren’s natural gas purchased for resale expenses decreased $57 million, or 27%, for the three months ended March 31, 2024, compared with the year-ago period, due to decreased natural gas purchased for resale expenses at Ameren Illinois Natural Gas and Ameren Missouri, as discussed below.

Ameren Missouri

Ameren Missouri’s natural gas purchased for resale expenses decreased $19 million, or 40%, for the three months ended March 31, 2024, compared with the year-ago period. Expenses associated with “Cost recovery mechanisms – offset in natural gas revenue” decreased $21 million due to lower commodity prices and the absence of amortization of natural gas costs deferred under the PGA related to the extremely cold weather in mid-February 2021. The decrease in natural gas purchased for resale expenses is fully offset by a decrease in natural gas revenues under the PGA.

Ameren Illinois Natural Gas

Ameren Illinois Natural Gas’ natural gas purchased for resale expenses decreased $38 million, or 24%, for the three months ended March 31, 2024, compared with the year-ago period, primarily due to lower amortization of natural gas costs that were previously deferred under the PGA and lower natural gas prices. The decrease in natural gas purchased for resale expenses is fully offset by a decrease in natural gas revenues under the PGA.

Other Operations and Maintenance Expenses

Increase (Decrease) by Segment
Total by Segment**(a)**Overall Ameren Increase of $22 Million

49478023452954947802345296

(a)Includes other/intersegment eliminations of $3 million and $5 million in the three months ended March 31, 2024 and 2023, respectively.

Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

Ameren

Other operations and maintenance expenses increased $22 million in the three months ended March 31, 2024, compared with the year-ago period, because of changes discussed below.

Ameren Transmission

Other operations and maintenance expenses increased $3 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of increased costs related to ATXI’s operations control center, which was placed in service in December 2023. ATXI provides affiliates with access to this facility. The rental expense associated with this facility is an affiliate transaction and eliminated in consolidation for purposes of Ameren’s consolidated financial statements. See Note 8 – Related-party Transactions under Part I, Item 1, of this report for additional information.

Ameren Missouri

Other operations and maintenance expenses increased $15 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of the following items:

  • A $15 million charge related to an increase in the estimated minimum cost of additional mitigation relief associated with NSR and Clean Air Act litigation related to the Rush Island Energy Center, see Note 9 - Commitments and Contingencies under Part 1, Item 1, of this report for more information.

*•*Individually insignificant increases of $8 million in various other operations and maintenance expenses, including legal costs, renewable development costs, cloud computing costs, and amortization of regulatory assets associated with previously expensed costs approved for recovery pursuant to the June 2023 MoPSC rate order.

The above increases were partially offset by the following items:

*•*Pension and benefit costs decreased $11 million, primarily because of a lower base level of expenses, subject to a tracker, included in customer rates pursuant to the June 2023 MoPSC electric rate order. See Note 11 - Retirement Benefits under Part 1, Item 1 of this report for more information.

*•*Energy center costs decreased $5 million, primarily because of lower Callaway Energy Center refueling and maintenance costs during the fall 2023 outage, compared to the spring 2022 outage.

Ameren Illinois

Other operations and maintenance expenses increased $8 million in the three months ended March 31, 2024, compared with the year-ago period, as discussed below. Other operations and maintenance expenses were comparable at Ameren Illinois Transmission between periods.

Ameren Illinois Electric Distribution

Other operations and maintenance increased $7 million in the three months ended March 31, 2024, compared with the year-ago period primarily due to the following items:

  • Bad debt costs increased $6 million, primarily because of a higher base level of expenses included in customer rates pursuant to the associated rider.

  • Amortization of regulatory assets associated with customer energy-efficiency investments under formula ratemaking increased $3 million.

The above increases were partially offset by a decrease of $4 million because of a reduction in environmental remediation rider costs.

Ameren Illinois Natural Gas

Other operations and maintenance expenses were comparable between periods.

Depreciation and Amortization Expenses

Increase by Segment
Total by Segment**(a)**Overall Ameren Increase of $41 Million

49478023456044947802345605

(a)Includes other/intersegment eliminations of $1 million and $1 million in the three months ended March 31, 2024 and 2023, respectively.

Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

Depreciation and amortization expenses increased $41 million, $20 million, and $19 million in the three months ended March 31, 2024, compared with the year-ago period, at Ameren, Ameren Illinois, and Ameren Missouri, respectively, primarily because of additional property, plant, and equipment investments across their respective segments. Ameren’s and Ameren Missouri’s depreciation and amortization expenses for the three months ended March 31, 2024, compared with the year-ago period, were affected by the following, which include the effect of the additional investments at Ameren Missouri:

  • Increased depreciation and amortization of $20 million due to the inclusion in base rates of amounts previously deferred under the PISA and RESRAM effective July 9, 2023, pursuant to the June 2023 MoPSC electric rate order.

  • The lower net under-recovery of RESRAM eligible expenses and increased amortization of prior deferrals increased depreciation and amortization expenses by $7 million.

  • Depreciation and amortization rate changes pursuant to the electric rate orders noted above, which increased depreciation and amortization expenses by $2 million.

  • Depreciation and amortization expenses reflected a deferral to a regulatory asset of depreciation associated with investments in eligible property, plant, and equipment not yet included in base rates, pursuant to PISA and RESRAM. Base rates were updated to include the eligible property, plant, and equipment in-service through December 31, 2022, when new customer rates became effective on July 9, 2023, pursuant to the June 2023 MoPSC electric rate order. The effect of rebasing PISA and RESRAM, partially offset by increased amortization of prior PISA deferrals, decreased depreciation and amortization by $9 million.

  • The higher net deferral pursuant to a tracker related to certain excess deferred income taxes, which decreased depreciation and amortization expenses by $2 million.

Taxes Other Than Income Taxes

Increase (Decrease) by Segment
Total by Segment**(a)**Overall Ameren Increase of $8 Million

4947802345924 4947802345926

(a)Includes $2 million and $2 million at Ameren Transmission in the three months ended March 31, 2024 and 2023, respectively, and other/intersegment eliminations of $3 million and $4 million in the three months ended March 31, 2024 and 2023, respectively.

Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

Taxes other than income taxes increased $8 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of the absence in 2024 of $5 million in employee retention tax credits received in 2023 at Ameren Missouri under the Coronavirus Aid, Relief, and Economic Security Act. Taxes other than income taxes increased $2 million at Ameren Illinois Natural Gas due to an increase in excise taxes resulting from higher invested capital taxes.

Other Income, Net

Increase (Decrease) by Segment
Total by SegmentOverall Ameren Increase of $11 Million

49478023461774947802346178

Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

See Note 5 – Other Income, Net, under Part I, Item 1, of this report for additional information. See Note 11 – Retirement Benefits under Part I, Item 1, of this report for more information on the non-service cost components of net periodic benefit income.

Ameren

Other income, net, increased $11 million in the three months ended March 31, 2024, compared with the year-ago period. In addition to changes discussed below, other income, net, decreased $5 million, because of increases in the non-service cost component of net periodic benefit income for activity not reported as part of a segment. Additionally, other income, net, decreased $2 million, for activity not reported as part of a segment, because of decreased income from equity method investments to advance clean and resilient energy technologies.

Ameren Transmission

Other income, net, decreased $4 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of a $4 million decrease in the allowance for equity funds used during construction, primarily related to lower average construction work in progress balances and an increased level of short-term borrowings included in the calculation.

Ameren Missouri

Other income, net, increased $25 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of a $21 million increase in the non-service cost component of net periodic benefit income, primarily because of changes in the base level of pension and postretirement costs pursuant to the June 2023 MoPSC electric rate order. Other income, net, also increased $5 million because of a higher allowance for equity funds used during construction, resulting from higher average construction work in progress balances.

Ameren Illinois

Other income, net, decreased $6 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of a $3 million decrease in the non-service cost component of net periodic benefit income at Ameren Illinois Electric Distribution and a $3 million decrease in the allowance for equity funds used during construction at Ameren Illinois Transmission, primarily because of lower average construction work in progress balances and an increased level of short-term borrowings included in the calculation.

Interest Charges

Increase by Segment
Total by SegmentOverall Ameren Increase of $27 Million

49478023461944947802346195

Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report and the Long-term Debt and Equity section below for additional information on short-term borrowings and long-term debt, respectively, discussed below.

Ameren

Interest charges increased $27 million in the three months ended March 31, 2024, compared with the year-ago period. In addition to changes by segments discussed below, interest charges increased $6 million at Ameren (parent) primarily because of issuances of long-term debt in November and December of 2023, which collectively increased interest charges by $17 million. The net proceeds from these issuances were used to repay short-term borrowings, which decreased short-term interest expense by $12 million compared with the year-ago period.

Ameren Transmission

Interest charges increased $7 million in the three months ended March 31, 2024, compared with the year-ago period, because of a $3 million increase due to increased levels of intercompany borrowings and a $3 million increase due to higher long-term debt balances. Additionally, interest charges increased because of a higher interest rate on an increased level of short-term borrowings.

Ameren Missouri

Interest charges increased $11 million in the three months ended March 31, 2024, compared with the year-ago period, because of the following items:

  • Issuances of long-term debt in March 2023 and January 2024 collectively increased interest charges by $9 million.

  • Interest charges reflected a deferral to a regulatory asset of interest associated with investments in eligible property, plant, and equipment not yet included in base rates, pursuant to PISA and RESRAM. Base rates were updated to include the eligible property, plant, and equipment in-service through December 31, 2022, when new customer rates became effective on July 9, 2023, pursuant to the June 2023 MoPSC electric rate order. This update to base rates resulted in a lower deferral of interest in 2024 pursuant to PISA and RESRAM that increased interest charges by $4 million.

The above increases were partially offset by a $5 million decrease related to lower levels of short-term borrowings.

Ameren Illinois

Interest charges increased $8 million in the three months ended March 31, 2024, compared with the year-ago period, primarily because of issuances of long-term debt in May 2023 which increased interest charges by $2 million at both Ameren Illinois Electric Distribution and Ameren Illinois Transmission, respectively. Additionally, interest charges increased at Ameren Illinois Transmission because of a higher interest rate on an increased level of short-term borrowings.

Income Taxes

The following table presents effective income tax rates for the three months ended March 31, 2024 and 2023:

Three Months**(a)**
20242023
Ameren14%12%
Ameren Missouri4%(4)%
Ameren Illinois24%25%
Ameren Illinois Electric Distribution17%24%
Ameren Illinois Natural Gas26%26%
Ameren Illinois Transmission25%26%
Ameren Transmission26%26%

(a)Estimate of the annual effective income tax rate adjusted to reflect the tax effect of items discrete to the three months ended March 31, 2024 and 2023.

See Note 12 – Income Taxes under Part I, Item 1, of this report for a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the Ameren Companies.

The effective tax rate was lower at Ameren Illinois Electric Distribution in the three months ended March 31, 2024, compared with the year-ago period, primarily because of an increase in excess deferred tax amortization pursuant to an ICC order which was offset by a corresponding decrease in revenues.

LIQUIDITY AND 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 of Ameren 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 of Ameren Missouri and Ameren Illinois, with capital contributions from Ameren (parent). As of March 31, 2024, 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 10-K.

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 10-K and Note 4 – Long-term Debt and Equity Financings under Part I, Item 1, of this report. As part of its funding plan for capital expenditures, Ameren is using newly issued shares of common stock to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2028. Additionally, Ameren has an ATM program under which Ameren may offer and sell from time to time 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 during the three months ended March 31, 2024. As of March 31, 2024, Ameren had multiple forward sale agreements that could be settled under the ATM program with various counterparties relating to 2.9 million shares of common stock. Ameren expects to settle approximately $230 million of the forward sale agreements with physical delivery of 2.9 million shares of common stock by December 31, 2024. Including issuances under the DRPlus and employee benefit plans, Ameren plans to issue approximately $300 million of equity in 2024 and approximately $600 million of equity each year from 2025 to 2028. As of March 31, 2024, Ameren had approximately $770 million of common stock available for sale under the ATM program, which takes into account the forward sale agreements in effect as of March 31, 2024. Ameren expects its equity to total capitalization 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 1, of this report for additional information on the ATM program, including the forward sale agreements under the ATM program relating to common stock.

The following table presents net cash provided by (used in) operating, investing, and financing activities for the three months ended March 31, 2024 and 2023:

Net Cash Provided By Operating ActivitiesNet Cash Used In Investing ActivitiesNet Cash Provided By (Used In) Financing Activities
20242023Variance20242023Variance20242023Variance
Ameren$492(a)$496(a)$(4)$(906)$(964)$58$497$489$8
Ameren Missouri17715324(482)(513)31311358(47)
Ameren Illinois415(a)373(a)42(372)(407)35(23)60(83)

(a)Both Ameren and Ameren Illinois’ cash provided by operating activities included cash outflows of $24 million and $25 million for the FEJA electric energy-efficiency rider and $6 million and $2 million for the customer generation rebate program for the three months ended March 31, 2024 and 2023, respectively.

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 regulatory rate review, subject to prudence reviews. 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, significantly affects the amount and timing of our cash provided by operating activities.

Ameren

Ameren’s cash provided by operating activities decreased $4 million in the first three months of 2024, compared with the year-ago period. The following items contributed to the decrease:

  • A $104 million increase in net collateral posted with counterparties, primarily due to changes in the market prices of power, natural gas, and other fuels.

  • A $39 million increase in the cost of natural gas held in storage, primarily at Ameren Illinois, because of higher volumes, partially offset by lower commodity prices.

The following items partially offset the decrease in Ameren’s cash from operating activities between periods:

  • A $32 million increase due to the timing of payments for accounts payable and prepaid expenses.

  • A $28 million increase due to higher purchases of materials and supplies inventories in the year-ago period to support operations as levels were increased to mitigate against potential supply disruptions.

  • A $23 million increase due to higher coal deliveries in the year-ago period to bring coal inventories back to targeted levels after transportation delays experienced in 2022.

  • A $22 million increase due to insurance proceeds received related to workers’ compensation payments made in 2023.

  • An $18 million increase resulting from increased customer collections primarily from base rate increases effective July 1, 2023, at Ameren Missouri pursuant to the June 2023 electric rate order and base rate increases effective November 28, 2023, at Ameren Illinois pursuant to the November 2023 natural gas rate order and electric transmission rate base growth, partially offset by lower customer collections under cost recovery mechanisms at Ameren Missouri and Ameren Illinois.

  • An $8 million increase due to the timing of payments received from the DOE for reimbursement of spent nuclear fuel storage and related costs.

Ameren Missouri

Ameren Missouri’s cash provided by operating activities increased $24 million in the first three months of 2024, compared with the year-ago period. The following items contributed to the increase:

  • A $47 million income tax refund from Ameren (parent), pursuant to the tax allocation agreement, primarily due to lower taxable income compared the year-ago period.

  • A $27 million increase due to higher purchases of materials and supplies inventories in the year-ago period to support operations as levels were increased to mitigate against potential supply disruptions.

  • A $23 million increase due to higher coal deliveries in the year-ago period to bring coal inventories back to targeted levels after transportation delays experienced in 2022.

  • A $10 million increase due to the timing of payments for accounts payable and prepaid expenses.

  • An $8 million increase due to the timing of payments received from the DOE for reimbursement of spent nuclear fuel storage and related costs.

The following items partially offset the increase in Ameren Missouri’s cash from operating activities between periods:

  • A $72 million increase in net collateral posted with counterparties, primarily due to changes in the market prices of power, natural gas, and other fuels.

  • A $16 million decrease resulting from lower customer collections under cost recovery mechanisms partially offset by increased customer collections primarily from base rate increases effective July 1, 2023, pursuant to the June 2023 electric rate order.

Ameren Illinois

Ameren Illinois’ cash provided by operating activities increased $42 million in the first three months of 2024, compared with the year-ago period. The following items contributed to the increase:

  • A $29 million increase resulting from increased customer collections primarily from base rate increases effective November 28, 2023, pursuant to the November 2023 natural gas rate order and electric transmission rate base growth, partially offset by lower customer collections under cost recovery mechanisms.

  • A $26 million increase due to the timing of payments for accounts payable and prepaid expenses

  • A $22 million income tax refund from Ameren (parent), pursuant to the tax allocation agreement, primarily due to lower taxable income compared to the year-ago period.

  • A $22 million increase due to insurance proceeds received related to workers’ compensation payments made in 2023.

  • A $5 million increase due to higher purchases of materials and supplies inventories in the year-ago period to support operations as levels were increased to mitigate against potential supply disruptions.

The following items partially offset the increase in Ameren Illinois’ cash from operating activities between periods:

  • A $36 million increase in the cost of natural gas held in storage because of higher volumes, partially offset by lower commodity prices.

  • A $32 million increase in net collateral posted with counterparties, primarily due to changes in the market prices of natural gas.

Cash Flows from Investing Activities

Ameren’s cash used in investing activities decreased $58 million during the first three months of 2024, compared with the year-ago period, primarily as a result of a $41 million decrease in capital expenditures, largely resulting from decreased expenditures for electric transmission infrastructure upgrades at Ameren Illinois and Ameren Missouri, and software projects at Ameren Missouri, partially offset by a $10 million increase in capital expenditures at ATXI. In addition, cash used in investing activities decreased $8 million due to the timing of nuclear fuel expenditures at Ameren Missouri during the three months ended March 31, 2024.

Ameren Missouri’s cash used in investing activities decreased $31 million during the first three months of 2024, compared with the year-ago period, primarily as a result of a $15 million decrease in capital expenditures, largely resulting from decreased expenditures for electric transmission infrastructure upgrades and software projects, and an $8 million decrease due to the timing of nuclear fuel expenditures.

Ameren Illinois’ cash used in investing activities decreased $35 million during the first three months of 2024, compared with the year-ago period, as a result of a $34 million decrease in capital expenditures, largely resulting from decreased expenditures for electric transmission infrastructure upgrades.

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.

Ameren’s cash provided by consolidated financing activities increased $8 million during the first three months of 2024, compared with the year-ago period. During the first three months of 2024, Ameren utilized net proceeds from the issuance of long-term debt of $347 million for capital expenditures and to repay then-outstanding short-term debt. In addition, during the first three months of 2024, Ameren utilized proceeds from net commercial paper issuances of $332 million along with cash provided by operating activities to fund, in part, capital expenditures. In comparison, during the first three months of 2023, Ameren utilized net proceeds from the issuance of long-term debt of $499 million for capital expenditures and to repay then-outstanding short-term debt. In addition, during the first three months of 2023, Ameren utilized proceeds from net commercial paper issuances of $179 million along with cash provided by operating activities to fund, in part, capital expenditures. During the first three months of 2024, Ameren paid common stock dividends of $178 million, compared with $165 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 Missouri’s cash provided by financing activities decreased $47 million during the first three months of 2024, compared with the year-ago period. During the first three months of 2024, Ameren Missouri utilized net proceeds from the issuance of long-term debt of $347 million for capital expenditures and to repay then-outstanding short-term debt. Additionally, during the first three months of 2024, Ameren Missouri utilized net commercial paper issuances totaling $274 million and cash provided by operating activities to fund, in part, capital expenditures, and repaid $306 million of money pool borrowings. In comparison, during the first three months of 2023, Ameren Missouri utilized net proceeds from the issuance of long-term debt of $499 million for capital expenditures and to repay then-outstanding short-term debt. In addition, during the first three months of 2023, Ameren Missouri repaid net commercial paper borrowings totaling $132 million.

Ameren Illinois’ financing activities used cash of $23 million during the first three months of 2024, compared to providing cash of $60 million during the year-ago period. During the first three months of 2024, Ameren Illinois utilized proceeds from net commercial paper issuances of $58 million and cash provided by operating activities to fund, in part, capital expenditures, and to repay $81 million of money pool borrowings. In comparison, during the first three months of 2024, Ameren Illinois utilized proceeds from net commercial paper issuances of $60 million and cash provided by operating activities to fund, in part, capital expenditures.

See Long-term Debt and Equity in this section for additional information on issuances of long-term debt, issuances of common stock, and noncash settlement of a financing obligation.

Credit Facility Borrowings and Liquidity

The following table presents Ameren’s consolidated liquidity as of March 31, 2024:

Available at March 31, 2024
Ameren (parent) and Ameren Missouri:
Missouri Credit Agreement – borrowing capacity$1,400
Less: Ameren Missouri commercial paper outstanding444
Less: Letters of credit5
Missouri Credit Agreement – subtotal951
Ameren (parent) and Ameren Illinois:
Illinois Credit Agreement – borrowing capacity1,200
Less: Ameren Illinois commercial paper outstanding424
Illinois Credit Agreement – subtotal776
Subtotal$1,727
Add: Cash and cash equivalents85
Net Available Liquidity**(a)**$1,812

(a)Does not include Ameren’s 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 $2.6 billion of credit until maturity in December 2027. 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, 2024, 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 the 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, Ameren’s money pool agreements and related borrowings, and relevant interest rates.

The issuance of short-term debt securities by Ameren’s utility subsidiaries is subject to FERC approval under the Federal Power Act. In January 2023, the FERC issued orders authorizing Ameren Missouri, Ameren Illinois, and ATXI to issue up to $1 billion, $1 billion, and $300 million, respectively, of short-term debt securities through January 2025.

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.

Long-term Debt and Equity

The following table presents issuances (net of any issuance premiums or discounts) of long-term debt and equity, as well as maturities of long-term debt for the three months ended March 31, 2024 and 2023:

Month Issued, Redeemed, or Matured20242023
Issuances of Long-term Debt
Ameren Missouri:
5.25% First mortgage bonds due 2054January$347$—
5.45% First mortgage bonds due 2053March—499
Total Ameren long-term debt issuances$347$499
Issuances of Common Stock
Ameren:
DRPlus and 401(k)(a)(b)Various$10$5
Total Ameren common stock issuances(c)$10$5
Maturities of Long-term Debt
Ameren Missouri:
Audrain County agreement (Audrain County CT) due 2023January$—$240(d)
Total Ameren long-term debt maturities$—$240

(a)Ameren issued a total of 0.1 million and 0.1 million shares of common stock under its DRPlus and 401(k) plan for the three months ended March 31, 2024 and 2023, respectively.

(b)Excludes a $7 million and $7 million receivable at March 31, 2024 and 2023, respectively.

(c)Excludes 0.2 million and 0.5 million shares of common stock valued at $16 million and $37 million issued for no cash consideration in connection with stock-based compensation for the three months ended March 31, 2024 and 2023, respectively.

(d)In January 2023, Ameren Missouri and Audrain County mutually agreed to terminate a financing obligation agreement related to the CT energy center in Audrain County, which was scheduled to expire in December 2023. No cash was exchanged in connection with the termination of the agreement as the $240 million principal amount of the financing obligation due from Ameren Missouri was equal to the amount of bond service payments due to Ameren Missouri.

In April 2024, Ameren Missouri issued $500 million of 5.20% first mortgage bonds due April 2034, with interest payable semiannually on April 1 and October 1 of each year, beginning October 1, 2024. Net proceeds from this issuance were used for capital expenditures and to repay short-term debt.

In April 2024, $350 million principal amount of Ameren Missouri’s 3.50% senior secured notes matured and were repaid with cash on hand.

In April 2024, Ameren Missouri received capital contributions totaling $350 million from Ameren (parent).

See Note 4 – Long-term Debt and Equity Financings under Part I, Item 1, of this report for additional information, including proceeds from issuances of long-term debt, the use of those proceeds, Ameren’s forward equity sale agreements, and the ATM program.

Indebtedness Provisions and Other Covenants

At March 31, 2024, 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 1, of this report and Note 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for a discussion of provisions, applicable cross-default provisions, and covenants contained in our credit agreements, in ATXI’s 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 and credit 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 and credit markets, could negatively affect our ability to maintain and expand our businesses. After assessing their respective 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 and credit markets on reasonable terms. However, events beyond Ameren’s, Ameren Missouri’s, and Ameren Illinois’ control may create uncertainty in the capital and credit markets or make access to the capital and credit markets uncertain or limited. Such events could increase our cost of capital and adversely affect our ability to access the capital and credit markets.

Dividends

The amount and timing of dividends payable on Ameren’s common stock are within the sole discretion of Ameren’s board of directors. Ameren’s board of directors has not set specific targets or payout parameters when declaring common stock dividends, but it considers various factors, including Ameren’s 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 65% 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, of the Form 10-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 31, 2024, none of these circumstances existed at Ameren, Ameren Missouri, or Ameren 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, 2024 and 2023:

Three Months
20242023
Ameren$178$165
ATXI—55

Credit Ratings

Our credit ratings affect our liquidity, our access to the capital 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 Moody’s and S&P, as applicable, effective on the date of this report:

Moody’sS&P
Ameren:
Issuer/corporate credit ratingBaa1BBB+
Senior unsecured debtBaa1BBB
Commercial paperP-2A-2
Ameren Missouri:
Issuer/corporate credit ratingBaa1BBB+
Secured debtA2A
Senior unsecured debtBaa1Not Rated
Commercial paperP-2A-2
Ameren Illinois:
Issuer/corporate credit ratingA3BBB+
Secured debtA1A
Senior unsecured debtA3BBB+
Commercial paperP-2A-2
ATXI:
Issuer credit ratingA2Not Rated
Senior unsecured debtA2Not 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 prepayments. 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 immaterial and cash collateral posted by external parties were $55 million for Ameren and Ameren Illinois at March 31, 2024. A sub-investment-grade issuer or senior unsecured debt rating (below “Baa3” from Moody’s or below “BBB-” from S&P) at March 31, 2024, could have resulted in Ameren, Ameren Missouri, or Ameren Illinois being required to post additional collateral or other assurances for certain trade and contractual obligations amounting to $610 million, $532 million, and $78 million, respectively.

Changes in commodity prices could trigger additional collateral postings and prepayments. Based on credit ratings at March 31, 2024, if market prices were 15% higher or lower than March 31, 2024 levels in the next 12 months and 20% higher or lower thereafter through the end of the term of the commodity contracts, then Ameren, Ameren Missouri, and Ameren Illinois could be required to post an immaterial amount, compared to each company’s liquidity, of collateral or provide other assurances for certain trade and contractual 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 2024 and beyond. 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 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K.

Operations

  • We are observing inflationary pressures on the prices of labor, services, materials, and supplies, as well as high interest rates. 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, formula ratemaking, and future test years, as applicable, mitigates our exposure. The inflationary pressures and high interest rates 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. In addition, these inflationary pressures and high interest rates could adversely affect our customers’ usage of, or payment for, our services.

*•*The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense for investments in qualifying property, plant, and equipment placed in service and not included in base rates. Investments not eligible for recovery under the PISA include amounts related to new nuclear and natural gas generating units and service to new customer premises. Additionally, the PISA permits Ameren Missouri to earn a return at the applicable WACC on rate base that incorporates those qualifying investments, as well as changes in total accumulated depreciation excluding retirements and plant-related deferred income taxes since the previous regulatory rate review. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC until added to rate base prospectively. Ameren Missouri recognizes an offset to “Interest Charges” on its consolidated statement of income for its carrying cost of debt relating to each return allowed under the PISA, with the difference between the applicable WACC and its carrying cost of debt recognized in revenues when recovery of PISA deferrals is reflected in customer rates. Approved PISA deferrals are recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the 15% 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 Missouri’s 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 15% of certain property, plant, and equipment placed in service, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. As a result of the PISA election, additional provisions of the law apply to Ameren Missouri, including limitations on electric customer rate increases. Pursuant to a Missouri law that became effective in August 2022, Ameren Missouri’s PISA election was extended through December 2028 and an additional extension through December 2033 is allowed if requested by Ameren Missouri and approved by the MoPSC, among other things. This law also established a 2.5% annual limit on increases to the electric service revenue requirement used to set customer rates, compared to the revenue requirement established in the immediately preceding rate order, due to the inclusion of incremental PISA deferrals in the revenue requirement. The limitation will be effective for revenue requirements approved by the MoPSC after January 1, 2024.

  • In June 2023, the MoPSC issued an order that resulted in an increase of $140 million to Ameren Missouri’s annual revenue requirement for electric retail service. The order increased the annualized base level of net energy costs pursuant to the FAC by approximately $40 million from the base level established in the MoPSC’s December 2021 electric rate order. The order also changed annualized depreciation, regulatory asset and liability amortization amounts, and the base level of expenses for trackers. On an annualized basis, these changes reflect approximate increases in “Depreciation and amortization” of $90 million and “Other income, net”, of $100 million, related to non-service pension and postretirement benefit income, on Ameren’s and Ameren Missouri’s consolidated statements of income. The new rates became effective on July 9, 2023. As a result of this order, Ameren Missouri expects a year-over-year increase to 2024 earnings, compared to 2023, of approximately $21 million ($10 million realized in the first quarter and $8 million and $3 million expected in the second and third quarter, respectively).

  • Ameren Missouri expects to file for an electric service regulatory rate review by the end of July 2024. Ameren Missouri expects key drivers of the electric service regulatory rate review to include increased infrastructure investments and other costs of service.

  • In 2018, the MoPSC issued an order approving Ameren Missouri’s MEEIA 2019 plan. The plan includes a portfolio of customer energy-efficiency and demand response programs through December 2024. Ameren Missouri intends to invest approximately $420 million over

the life of the plan, including $76 million in 2024. 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 revenues and the amounts collected from customers. In addition, the plan includes a performance incentive that provides Ameren Missouri an opportunity to earn revenues by achieving certain customer energy-efficiency goals. If the target program spending goal is achieved for 2024, the performance incentive would result in revenues of $12 million in 2024.

  • In January 2024, Ameren Missouri filed a proposed customer energy-efficiency plan with the MoPSC under the MEEIA. This filing proposed a three-year plan, which includes a portfolio of customer energy-efficiency programs, along with the continued use of the MEEIA rider discussed above. If the plan is approved, Ameren Missouri intends to invest $123 million annually in the proposed customer energy-efficiency programs from 2025 to 2027. In addition, Ameren Missouri requested performance incentives applicable to each plan year to earn revenues by achieving certain customer energy-efficiency savings and target spending goals. If 100% of the goals are achieved, Ameren Missouri would earn performance incentive revenues totaling $56 million over the three-year plan. Ameren Missouri also requested additional performance incentives applicable to each plan year totaling up to $14 million over the three-year plan, if Ameren Missouri exceeds 100% of the goals. Ameren Missouri expects a decision by the MoPSC by October 2024, but cannot predict the ultimate outcome of this regulatory proceeding.

  • Ameren Illinois and ATXI use a forward-looking rate calculation with an annual revenue requirement reconciliation for each company’s electric transmission business. Based on expected rate base and the currently allowed 10.52% ROE, which includes a 50-basis-point incentive adder for participation in an RTO, the revenue requirements that will be included in 2024 rates for Ameren Illinois’ and ATXI’s electric transmission businesses are $549 million and $223 million, respectively. These revenue requirements represent increases in Ameren Illinois’ and ATXI’s revenue requirements of $73 million and $29 million, respectively, from the revenue requirements reflected in 2023 rates, primarily due to higher expected rate base. These rates will affect Ameren Illinois’ and ATXI’s cash receipts during 2024, but will not determine their respective electric transmission service operating revenues, which will instead be based on 2024 actual recoverable costs, rate base, and a return on rate base at the applicable WACC as calculated under the FERC formula ratemaking framework.

  • The allowed base ROE for FERC-regulated transmission rates previously charged under the MISO tariff has been the subject of pending proceedings since 2013. Depending on the outcome of the proceedings, the transmission rates charged during previous periods and the currently effective rates may be subject to change and refund. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which increased the incentive 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 proposed to modify the Notice of Proposed Rulemaking’s incentive for participation in an RTO by limiting this incentive for utilities that join 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 matter. Ameren is unable to predict the ultimate impact of any changes to the FERC’s incentives policy, or any further order on base ROE. A 50-basis-point change in the FERC-allowed ROE would affect Ameren’s and Ameren Illinois’ annual net income by an estimated $16 million and $11 million, respectively, based on each company’s 2024 projected rate base.

  • Pursuant to December 2022 and March 2021 ICC orders, Ameren Illinois used the IEIMA formula framework to establish annual electric distribution service rates effective through 2023, and reconciled the related revenue requirement for customer rates established for 2023. As such, Ameren Illinois’ 2023 revenues reflected 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. By law, the decoupling provisions extend beyond 2023, which ensures that Ameren Illinois’ electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes. In April 2024, Ameren Illinois filed for a reconciliation adjustment to its 2023 electric distribution service revenue requirement with the ICC, requesting recovery of $160 million. An ICC decision in this proceeding is required by December 2024, and any approved adjustment would be collected from customers in 2025. This is the final revenue requirement reconciliation under the IEIMA formula framework.

  • Pursuant to the CEJA, 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. The base rates for a particular calendar year are based on forecasted recoverable costs and an ICC-determined ROE applied to Ameren Illinois’ forecasted average annual rate base using a forecasted capital structure, with a common equity ratio of up to 50% being deemed prudent and reasonable by law and a higher equity ratio requiring specific ICC approval. The ROE determined by the ICC for each calendar year of the four-year period is subject to annual adjustments based on certain performance incentives and penalties. An MYRP allows 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 ROE. Under the MYRP discussed below, Ameren Illinois’ 2024 electric distribution service revenues will be based on its 2024 actual recoverable costs, 2024 year-end rate base, and an ROE of 8.72%, as adjusted for any performance incentives or penalties, provided the actual revenue requirement does not exceed the reconciliation cap. If a given year’s revenue amount collected

from customers varies from the approved revenue requirement, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to reflect that year’s 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 applicable annual period. Ameren Illinois’ existing riders will remain effective under the MYRP discussed below, and will continue to remain effective beyond 2027 whether it elects to file an MYRP or a traditional regulatory rate review. Additionally, electric distribution service revenues continue to be decoupled from sales volumes under either election.

  • In December 2023, the ICC issued an order in Ameren Illinois' MYRP proceeding, approving revenue requirements for electric distribution service for 2024, 2025, 2026, and 2027 of $1,162 million, $1,210 million, $1,242 million, and $1,255 million, respectively. These revenue requirements were established under an alternative methodology which used Ameren Illinois’ previously approved 2022 year-end rate base since the order rejected the Grid Plan that was filed by Ameren Illinois as a part of the MYRP proceeding. In March 2024, pursuant to the order, Ameren Illinois filed a revised Grid Plan and a request to update the associated MYRP revenue requirements for 2024, 2025, 2026, and 2027 of $1,207 million, $1,286 million, $1,371 million, and $1,433 million, respectively. An ICC decision on the revised Grid Plan and updated revenue requirements is expected by December 2024 with rates effective in January 2025. The 2022 year-end rate base will remain in effect through 2027 unless subsequently changed by the ICC in the rehearing discussed below or if approval of a revised Grid Plan results in an update of each year’s revenue requirement. The approved revenue requirements in the ICC’s December 2023 order represent a cumulative four-year increase of $142 million compared to a cumulative increase of $321 million requested by Ameren Illinois in its March 2024 revised MYRP. In January 2024, the ICC partially denied a rehearing requested by Ameren Illinois to revise the allowed ROE in the December 2023 order and granted Ameren Illinois’ rehearing request to consider whether it is appropriate to use the 2022 year-end rate base for each year of the MYRP and to include a base level of investments to maintain grid reliability in each year of the MYRP. Additionally, the scope of the rehearing includes a review of certain operations and maintenance expenses in each year of the MYRP. In February 2024, Ameren Illinois filed its request in the rehearing proceeding, and subsequently updated the request in April 2024, proposing an updated 2024 revenue requirement of $1,213 million. An ICC decision in the rehearing proceeding is expected by late June 2024, with new rates effective July 2024. Also, in January 2024, Ameren Illinois filed an appeal of the December 2023 ICC order and the partial denial of Ameren Illinois’ request for rehearing to the Illinois Appellate Court for the Fifth Judicial District. The court is under no deadline to address the appeal. Ameren Illinois cannot predict the ultimate outcome of the revised Grid Plan filing, its request to update the associated MYRP revenue requirements for 2024 through 2027, the rehearing proceeding, or the appeal to the Illinois Appellate Court for the Fifth Judicial District. Ameren Illinois has taken prudent steps to align its 2024 operations with the ICC order, while continuing to ensure safe and adequate service is maintained. This includes reductions to Ameren Illinois’ capital expenditure and operations and maintenance expense plans.

*•*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 of the monthly yields of the 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 $120 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 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.

  • In November 2023, the ICC issued an order in Ameren Illinois’ January 2023 natural gas delivery service regulatory rate review, which resulted in an increase to its annual revenues for natural gas delivery service of $112 million. The new rates became effective on November 28, 2023. In December 2023, Ameren Illinois filed a request for rehearing with the ICC to revise the approved ROE and capital structure common equity percentage, and reverse an approximately $93 million reduction of planned distribution and transmission capital investments included in the order, among other things. In January 2024, the ICC denied Ameren Illinois’ rehearing request. Subsequently, in January 2024, Ameren Illinois filed an appeal of the November 2023 ICC order and the January 2024 ICC denial of Ameren Illinois’ request for rehearing to the Illinois Appellate Court for the Fifth Judicial District. The court is under no deadline to address the appeal. Ameren Illinois cannot predict the ultimate outcome of this appeal. Ameren Illinois has taken prudent steps to align its 2024 operations with the ICC order, while continuing to ensure safe and adequate service is maintained. This includes reductions to Ameren Illinois’ capital expenditure and operations and maintenance expense plans.

  • Ameren Missouri’s next refueling and maintenance outage at its Callaway energy center is scheduled for the spring of 2025. During a scheduled refueling, which occurs every 18 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 Missouri’s 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.

  • In September 2023, the United States District Court for the Eastern District of Missouri granted Ameren Missouri’s request to modify a September 2019 remedy order issued by the district court in order to allow the retirement of the Rush Island Energy Center in advance of its previously expected retirement date of 2039, in lieu of installing a flue gas desulfurization system. In its amended remedy order, the district court established an October 15, 2024 retirement date to allow for the completion of various transmission reliability projects and, in the interim, authorized Ameren Missouri to operate the energy center only as needed and as directed by the MISO. The MISO designated the Rush Island Energy Center as a system support resource in 2022 and concluded that certain reliability mitigation measures, including transmission upgrades, should occur before the energy center is retired. The Rush Island Energy Center began operating as a system support resource on September 1, 2022. In 2023, the MISO extended the system support resource designation through August 2024, and in September 2023, an agreement between Ameren Missouri and the MISO was approved by the FERC that results in the Rush Island Energy Center only operating during peak demand times and emergencies. The system support resource designation and the related agreement are subject to annual renewal and revision. Construction activities are underway for the transmission upgrades approved by the MISO, with the majority of the upgrades expected to be completed in the fall of 2024. Ameren Missouri expects to complete the last of the upgrades by mid-2025. The United States Department of Justice is seeking an order from the district court providing for additional mitigation relief related to prior emissions. Ameren Missouri contends that the retirement of the Rush Island Energy Center, which eliminates all future emissions from the energy center, mitigates claims relating to prior emissions. In March 2024, the district court ordered Ameren Missouri and the United States Department of Justice to file proposed draft orders outlining additional mitigation relief. In May 2024, Ameren Missouri filed a proposed draft order that includes retiring the Rush Island Energy Center, a program to provide electric buses and charging stations to schools in the metro St. Louis area, a program to provide air filters to eligible Ameren Missouri electric residential customers, and the retirement of SO2 allowances. Excluding the accelerated retirement of the Rush Island Energy Center, these programs are estimated to cost approximately $20 million . Also in May 2024, the United States Department of Justice filed a proposed draft order that includes a program to provide electric buses and charging stations to schools in the metro St. Louis area and a program to provide air filters to eligible Ameren Missouri electric residential customers. These programs include a significantly greater number of buses, charging stations, and air filters than Ameren Missouri’s proposal and the United States Department of Justice estimates these programs would cost approximately $120 million. As of March 31, 2024, Ameren and Ameren Missouri recorded a $20 million liability related to the cost of potential additional mitigation, which represents the estimated minimum liability, as no other amount within the range was a better estimate. The district court is expected to hold a hearing in mid-2024 and an order is expected in the second half of 2024. Depending on the scope and basis of the order, Ameren Missouri or the United States Department of Justice could appeal any additional mitigation relief ordered. For additional information on the NSR and Clean Air Act litigation, see Note 9 – Commitments and Contingencies under Part I, Item 1, of this report. 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. See below for information regarding Ameren Missouri’s petition filed with the MoPSC requesting the securitization of costs associated with the planned accelerated retirement of the Rush Island Energy Center.

  • Pursuant to Illinois law, Ameren Missouri's natural gas-fired energy centers in Illinois are subject to annual limits on emissions, including CO2 and NOx. Further reductions to emissions limits will become effective between 2030 and 2040, resulting in the closure of the Venice Energy Center by the end of 2029. The reductions could also limit the operations of Ameren Missouri's four other natural gas-fired energy centers located in the state of Illinois, and will result in their closure by 2040. These energy centers are utilized to support peak loads. Subject to conditions in the CEJA, these energy centers may be allowed to exceed the emissions limits in order to maintain reliability of electric utility service.

  • 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, regulatory and 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, higher cost of debt, customer conservation efforts, the impacts of additional customer energy-efficiency programs, and increased customer use of increasingly cost-effective advancements in innovative energy technologies, including private generation and energy storage. However, we expect the decreased demand to be offset by increased demand resulting from increased electrification of the economy, including in the transportation sector, and as a means to address economy-wide CO2 emission concerns. In addition, several entities are considering either locating or expanding their operations within our service territories. 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

  • In September 2023, Ameren Missouri filed its 2023 IRP with the MoPSC, which includes Ameren Missouri’s preferred plan for meeting customers’ projected long-term energy needs in a manner that maintains system reliability and customer affordability while transitioning to clean energy generation in an environmentally responsible manner. In connection with this plan, Ameren is continuing to target net-

zero carbon emissions by 2045, as well as a 60% reduction by 2030 and an 85% reduction by 2040 based on 2005 levels. Ameren’s goals include both reduction of direct emissions from operations (scope 1), as well as electricity usage at Ameren buildings (scope 2), including other greenhouse gas emissions of methane, nitrous oxide, and sulfur hexafluoride. Achieving these goals will be dependent on a variety of factors, including cost-effective advancements in innovative clean energy technologies and constructive federal and state energy and economic policies. The preferred plan includes, among other things, the following:

  • adding an 800-MW natural gas-fired simple-cycle energy center by 2027 and an additional 1,200-MW natural gas-fired combined-cycle energy center by 2033;

  • adding 2,800 MWs of renewable generation by 2030, which includes the solar generation facilities discussed below, and an additional 1,900 MWs by 2036;

  • adding 400 MWs of battery storage by 2030 and an additional 400 MWs by 2035;

  • adding 1,200 MWs of other clean dispatchable generation resources by 2040 and an additional 1,200 MWs by 2043;

  • retiring all of Ameren Missouri’s coal-fired energy centers by 2042;

  • accelerating the retirement date of the Rush Island coal-fired energy center from 2025 to 2024;

  • extending the retirement date of the Sioux coal-fired energy center from 2030 to 2032 to ensure reliability during the transition to clean energy generation, which is subject to the approval of a change in depreciable lives of the energy center’s assets by the MoPSC;

  • retiring 1,800 MWs of Ameren Missouri’s natural gas-fired energy centers by 2040 to comply with Illinois law;

  • the continued implementation of customer energy-efficiency and demand response programs; and

  • the expectation that Ameren Missouri will seek and receive NRC approval for an extension of the operating license for the Callaway Energy Center beyond its current 2044 expiration date.

Expected capital expenditures through 2028 related to the facilities discussed above are included in Ameren’s and Ameren Missouri’s expected capital investments discussed below. Ameren Missouri’s plan could be affected by, among other factors: Ameren Missouri’s ability to obtain CCNs from the MoPSC, and any other required approvals for the addition of renewable resources or natural gas-fired generation, retirement of energy centers, and new or continued customer energy-efficiency programs; the ability to enter into agreements for renewable or natural gas-fired generation and acquire or construct that generation at a reasonable cost; the ability of suppliers, contractors, and developers to meet contractual commitments and timely complete projects, which is dependent upon the availability of necessary labor, materials, and equipment, geopolitical conflict, or government actions, among other things; changes in the scope and timing of projects; the ability to qualify for, and use or transfer, federal production or investment tax credits; the cost of wind, solar, and other renewable generation and battery storage technologies; the cost of natural gas or hydrogen CT technologies; the ability to maintain system reliability during and after the transition to clean energy generation; new and/or changes in environmental regulations, including those related to CO2 and other greenhouse gas emissions; energy prices and demand; Ameren Missouri’s ability to obtain necessary rights-of-way, easements, and transmission interconnection agreements at an acceptable cost and in a timely fashion; the ability to earn an adequate return on invested capital; and the ability to raise capital on reasonable terms. The next integrated resource plan is expected to be filed in September 2026.

  • Pursuant to Missouri law, in November 2023, Ameren Missouri petitioned the MoPSC for a financing order to authorize the issuance of securitized utility tariff bonds to finance $519 million of costs related to the planned accelerated retirement of the Rush Island Energy Center, which includes the expected remaining unrecovered net plant balance associated with the facility, among other costs. Ameren Missouri requested to collect the amounts necessary to repay the bonds over approximately 15 years from the date of bond issuance. In March 2024, the MoPSC staff filed an updated response to Ameren Missouri’s petition that stated Ameren Missouri’s decision to accelerate the retirement of the Rush Island Energy Center was prudent and recommended that $497 million of costs be financed through securitized utility tariff bonds. However, the MoPSC staff claimed Ameren Missouri’s prior actions that resulted in the adverse ruling in the NSR and Clean Air Act Litigation discussed in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report, were imprudent and recommended that the impact of those actions on customers be considered in future regulatory proceedings. In February 2024, the MoOPC filed a response to Ameren Missouri’s petition that opposes the issuance of securitized utility tariff bonds. If Ameren Missouri is not allowed to recover Rush Island Energy Center costs through securitization or if future regulatory proceedings result in revenue reductions based on Ameren Missouri’s prior actions that resulted in the adverse ruling in the NSR and Clean Air Act litigation, it could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Ameren Missouri expects a decision by the MoPSC by the end of June 2024, but cannot predict the ultimate outcome of this regulatory proceeding.

  • During 2022 and 2023, Ameren Missouri, and certain subsidiaries of Ameren Missouri, entered into agreements to acquire and/or construct various solar generation facilities, with various regulatory approvals pending. All of the solar generation facilities are aligned with the 2023 IRP discussed above, and expected capital expenditures related to these facilities are included in Ameren’s and Ameren Missouri’s expected capital investments discussed below.

  • Ameren Missouri's 2023 IRP targets cleaner and more diverse sources of energy generation, including solar generation. While rights to

acquire build-transfer solar facilities and supplies for development-transfer and self-build solar facilities discussed above were secured through agreements, 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 these projects and other solar generation projects. The supply of solar panel components to the United States was significantly disrupted as a result of an investigation conducted by the United States Department of Commerce that concluded in August 2023 and found that exporters and producers of solar panel components from four Southeast Asian countries, with several exceptions, have been circumventing tariffs imposed on imports from China. As a result of the investigation, importers and exporters may submit certain certifications to the United States Department of Commerce to avoid the imposition of increased tariffs. Failure to submit the applicable certifications, or denial of the submitted certifications by the United States Department of Commerce, could result in increased tariffs on solar panel components that were subject to the investigation and entered the United States on or after April 1, 2022. Additionally, certain solar panel components 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 became effective in June 2022. Also, in June 2022, President Biden took executive action to temporarily lift certain tariffs on solar panel components imported from the four Southeast Asian countries investigated by the United States Department of Commerce for 24 months in order to allow the United States access to a sufficient supply of solar panel components. Any future tariffs or actions by the United States Customs and Border Protection Agency could affect the cost and the availability of solar panel components and the timing and amount of Ameren Missouri's estimated capital expenditures associated with solar generation investments.

  • Through 2028, 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 $22.8 billion (Ameren Missouri – up to $13.5 billion; Ameren Illinois – up to $7.6 billion; ATXI – up to $1.7 billion) of capital expenditures during the period from 2024 through 2028. Ameren’s and Ameren Missouri’s estimates include $3.3 billion of renewable generation investments and $2.7 billion of dispatchable generation investments through 2028, consistent with Ameren Missouri’s 2023 IRP. Ameren’s and Ameren Illinois’ estimates include investments necessary to meet compliance requirements of the CEJA, while continuing to ensure safe and adequate service is maintained. Ameren Illinois’ estimates may be revised as a result of future ICC orders related to its current MYRP.

  • In 2021, the MISO issued a report outlining a preliminary long-range transmission planning roadmap of projects through 2039, which considers the rapidly changing generation mix within MISO 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 July 2022, the MISO approved the first tranche of projects under the roadmap. A portion of these projects were assigned to various utilities, of which Ameren was awarded projects that are estimated to cost approximately $1.8 billion, based on the MISO’s cost estimate. Related to these projects, Ameren began substation upgrades in May 2024 in advance of transmission line construction, which is expected to begin in 2026, with forecasted completion dates near the end of this decade. In 2022 and 2023, the MISO initiated requests for proposals for first tranche competitive bid projects. In October and November 2023, two first tranche competitive bid projects were awarded to ATXI and represent a total estimated investment of approximately $0.1 billion. In April 2024, the remaining first tranche competitive-bid project was awarded to ATXI and represents an estimated investment of approximately $0.3 billion. ATXI will own 51% of the assets associated with the projects awarded in October 2023 and April 2024, and the remaining 49% of the assets will be owned by an unaffiliated entity. In February 2024, Ameren Illinois and ATXI filed a request for a CCN, among other things, with the ICC related to the portion of the MISO long-range transmission projects discussed above that will be constructed within the ICC’s jurisdiction. A decision by the ICC is expected by mid-2025. In March 2024, the MISO preliminarily identified a second tranche of projects with estimated costs of $17 billion to $23 billion based on MISO’s cost estimate. The MISO is expected to approve the second tranche of projects in the third quarter of 2024.

  • Environmental regulations, including those related to CO2 emissions, or other actions taken by the EPA or state regulators, or requirements that may result from the NSR and Clean Air Act Litigation, could result in significant increases in capital expenditures and operating costs. Regulations can be reviewed and repealed, and replacement or alternative regulations can be proposed or adopted by the current federal administration, including the EPA. See Note 9 – Commitments and Contingencies under Part I, Item 1, of this report, for additional information on environmental matters, including the NSR and Clean Air Act litigation. The ultimate implementation of any of these new 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 of Ameren Missouri’s coal and natural gas-fired energy centers. Ameren Missouri’s operating costs and capital expenditures are subject to MoPSC prudence reviews, which could result in cost disallowances, as well as regulatory lag. The cost of Ameren 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. Ameren’s and Ameren Missouri’s 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 $2.6 billion of credit through December 2027, subject to a 364-day repayment term for Ameren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $3.2 billion. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, 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 Credit Agreements. See Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, in the Form 10-K for long-term debt maturities from 2024 to 2028 and beyond at Ameren (parent), Ameren Missouri, Ameren Illinois, and ATXI. See Note 4 – Long-term Debt and Equity Financings under Part I, Item 1, of this report for outstanding forward sale agreements under the ATM and issuances and maturities of long-term debt in 2024 through the date of this report. 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, 2024, for Ameren, Ameren Missouri, and Ameren Illinois. Ameren, Ameren Missouri, and Ameren Illinois each believe that their liquidity is adequate given their respective expected operating cash flows, capital expenditures, and financing plans, and expect to continue to have access to the capital and credit 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 to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2028. Additionally, Ameren has an ATM program under which Ameren may offer and sell from time to time common stock, which includes the ability to enter into forward sales agreements, subject to market conditions and other factors. As of March 31, 2024, Ameren had multiple forward sale agreements that could be settled under the ATM program with various counterparties relating to 2.9 million shares of common stock. Ameren expects to settle approximately $230 million of the forward sale agreements with physical delivery of 2.9 million shares of common stock by December 31, 2024. Including issuances under the DRPlus and employee benefit plans, Ameren plans to issue approximately $300 million of equity in 2024 and approximately $600 million of equity each year from 2025 to 2028. As of March 31, 2024, Ameren had approximately $770 million of common stock available for sale under the ATM program, which takes into account the forward sale agreements in effect as of March 31, 2024. Ameren expects its equity to total capitalization 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).

  • The IRA was enacted in August 2022, and includes various income tax provisions, among other things. The law extends federal production and investment tax credits for projects beginning construction through 2024 and allows for a 10% adder to the production and investment tax credits for siting projects at existing energy communities as defined in the law, which includes sites previously used for coal-fired generation. The law also creates clean energy tax credits for projects placed in service after 2024. The clean energy tax credits will apply to renewable energy production and investments, along with certain nuclear energy production, and will be phased out beginning in 2033, at the earliest. The phase-out is triggered when greenhouse gas emissions from the electric generation industry are reduced by at least 75% from the annual 2022 emission rate or at the beginning of 2033, whichever is later. The law allows for transferability to an unrelated party for cash of up to 100% of certain tax credits generated after 2022. In addition, the new law imposes a 15% minimum tax on adjusted financial statement income, as defined in the law, for corporations whose average annual adjusted financial statement income exceeds $1 billion for three consecutive preceding tax years effective for tax years beginning after December 31, 2022. Once a corporation exceeds this three-year average annual adjusted financial statement income threshold, it will be subject to the minimum tax for all future tax years. Additional regulations, interpretations, amendments, or technical corrections to or in connection with the IRA have been and are expected to be issued by the IRS or United States Department of Treasury, which may impact the timing of when the 15% minimum tax becomes applicable for Ameren as discussed below.

  • Pursuant to the IRA discussed above, Ameren expects to transfer production tax credits generated by Ameren Missouri’s High Prairie Renewable and Atchison Renewable energy centers, as well as the solar facilities included in Ameren Missouri’s 2023 IRP discussed above, to unrelated parties from 2024 to 2028.

  • In April 2023, the IRS issued guidance providing a safe harbor method of accounting for the capitalization or deduction of certain expenditures to maintain, repair, replace, or improve natural gas distribution property. The safe harbor method of accounting may be implemented in the first, second, or third taxable year ending after May 1, 2023. Ameren is currently evaluating the potential impact of this guidance, including the timing of adoption.

  • As of March 31, 2024, Ameren had $180 million in tax benefits from federal and state income tax credit carryforwards, $42 million in tax benefits from state net operating loss carryforwards, and $39 million in tax overpayments, refunds, and receivables, which will be utilized in future periods. Future expected income tax payments are based on expected taxable income, available income tax credit and net operating loss carryforwards, and current tax law. Expected taxable income is affected by expected capital expenditures, when property, plant, and equipment is placed in-service or retired, and the timing of regulatory reviews, among other things. Based on preliminary calculations, Ameren does not expect to be subject to the 15% minimum tax on adjusted financial statement income imposed by the IRA through 2028. Ameren expects annual federal income tax payments to be immaterial through 2028.

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 Ameren’s 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 MATTERS

See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.

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