aee-20241231
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
OR
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri63103
(314)621-3222
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri63103
(314)621-3222
(Illinois Corporation)
10 Richard Mark Way
Collinsville, Illinois62234
(618)343-8150
Securities Registered Pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $0.01 par value per share AEE New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
Registrant Title of each class
Ameren Illinois Company Preferred Stock, cumulative, $100 par value
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Indicate by check mark if each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Ameren Corporation Yes ☒ No ☐
Union Electric Company Yes ☒ No ☐
Ameren Illinois Company Yes ☒ No ☐
Indicate by check mark if each registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Ameren Corporation Yes ☐ No ☒
Union Electric Company Yes ☐ No ☒
Ameren Illinois Company Yes ☐ No ☒
Indicate by check mark whether each registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Ameren Corporation Yes ☒ No ☐
Union Electric Company Yes ☒ No ☐
Ameren Illinois Company Yes ☒ No ☐
Indicate by check mark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Ameren Corporation Yes ☒ No ☐
Union Electric Company Yes ☒ No ☐
Ameren Illinois Company Yes ☒ No ☐
Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Smaller reporting company ☐ Emerging growth company ☐
Smaller reporting company ☐ Emerging growth company ☐
Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Ameren Corporation ☐
Union Electric Company ☐
Ameren Illinois Company ☐
Indicate by check mark whether each registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Ameren Corporation ☒
Union Electric Company ☐
Ameren Illinois Company ☐
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If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Ameren Corporation ☐
Union Electric Company ☐
Ameren Illinois Company ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Ameren Corporation ☐
Union Electric Company ☐
Ameren Illinois Company ☐
Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).
Ameren Corporation Yes ☐ No ☒
Union Electric Company Yes ☐ No ☒
Ameren Illinois Company Yes ☐ No ☒
As of June 28, 2024, the aggregate market value of Ameren Corporation’s common stock, $0.01 par value, (based upon the closing price of the common stock on the New York Stock Exchange on June 28, 2024) held by nonaffiliates was $18,953,889,643. All of the shares of common stock of the other registrants were held by Ameren Corporation as of June 28, 2024.
The number of shares outstanding of each registrant’s classes of common stock as of January 31, 2025, were as follows:
Registrant Title of each class of common stock Shares
Ameren Corporation Common stock, $0.01 par value per share 269,906,252
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement of Ameren Corporation and portions of the definitive information statements of Union Electric Company and Ameren Illinois Company for the 2025 annual meetings of shareholders are incorporated by reference into Part III of this Form 10-K.
This combined Form 10-K is separately filed by Ameren Corporation, Union Electric Company, and Ameren Illinois Company. Each registrant hereto is filing on its own behalf all of the information contained in this annual report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.
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GLOSSARY OF TERMS AND ABBREVIATIONS 1
FORWARD-LOOKING STATEMENTS 5
PART I
Item 1. Business 7
General 7
Business Segments 7
Rates and Regulation 8
Transmission 10
Supply of Electric Power 10
Power Generation 12
Renewable Energy and Zero Emission Standards 12
Customer Energy-Efficiency Programs 13
Natural Gas Supply for Distribution 14
Human Capital Management 14
Industry Issues 16
Operating Statistics 18
Available Information 20
Item 1A. Risk Factors 20
Item 1B. Unresolved Staff Comments 30
Item 1C. Cybersecurity 30
Item 2. Properties 31
Item 3. Legal Proceedings 33
Item 4. Mine Safety Disclosures 33
PART II
Item 6. (Reserved) 35
Overview 36
Results of Operations 41
Liquidity and Capital Resources 57
Regulatory Matters 73
Accounting Matters 73
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 77
Item 8. Financial Statements and Supplementary Data 80
Ameren Corporation 86
Union Electric 90
Ameren Illinois 94
Note 1. Summary of Significant Accounting Policies 98
Note 2. Rate and Regulatory Matters 103
Note 3. Property, Plant, and Equipment, Net 115
Note 4. Short-term Debt and Liquidity 116
Note 5. Long-term Debt and Equity Financings 119
Note 6. Other Income, Net 126
Note 7. Derivative Financial Instruments 126
Note 8. Fair Value Measurements 128
Note 9. Callaway Energy Center 131
Note 10. Retirement Benefits 134
Note 11. Stock-based Compensation 140
Note 13. Related-party Transactions 145
Note 14. Commitments and Contingencies 148
Note 15. Supplemental Information 152
Note 16. Segment Information 155
Item 9A. Controls and Procedures 162
Item 9B. Other Information 162
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 162
PART III
Item 10. Directors, Executive Officers and Corporate Governance 162
Item 11. Executive Compensation 163
Item 14. Principal Accountant Fees and Services 164
PART IV
Item 15. Exhibits and Financial Statement Schedules 165
EXHIBIT INDEX 171
This report contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements should be read with the cautionary statements and important factors under the heading “Forward-looking Statements.” Forward-looking statements are all statements other than statements of historical fact, including those statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “targets,” and similar expressions.
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GLOSSARY OF TERMS AND ABBREVIATIONS
We use the words “our,” “we” or “us” with respect to certain information that relates to Ameren, Ameren Missouri, and Ameren Illinois, collectively. When appropriate, subsidiaries of Ameren Corporation are named specifically as their various business activities are discussed.
2023 PRP – Preferred Resource Plan, a nonbinding plan that Ameren Missouri filed with the MoPSC in September 2023 that includes Ameren Missouri’s preferred plan for meeting customers’ projected long-term energy needs.
2025 Change to the 2023 PRP – A change to Ameren’s 2023 PRP expected to be filed with the MoPSC in February 2025 reflecting certain modifications to Ameren Missouri’s preferred plan for meeting customers’ projected long-term energy needs.
Ameren – Ameren Corporation and its subsidiaries on a consolidated basis. In references to financing activities, acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.
Ameren Companies – Ameren Corporation, Ameren Missouri, and Ameren Illinois, collectively, which are individual registrants within the Ameren consolidated group.
Ameren Illinois – Ameren Illinois Company, an Ameren Corporation subsidiary that operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois, doing business as Ameren Illinois.
Ameren Illinois Electric Distribution – An Ameren Corporation and Ameren Illinois financial reporting segment consisting of the rate-regulated electric distribution business of Ameren Illinois.
Ameren Illinois Natural Gas – An Ameren Corporation and Ameren Illinois financial reporting segment consisting of the rate-regulated natural gas distribution business of Ameren Illinois.
Ameren Illinois Transmission – An Ameren Illinois financial reporting segment consisting of the rate-regulated electric transmission business of Ameren Illinois.
Ameren Missouri – Union Electric Company and its subsidiary, AMF, on a consolidated basis. Union Electric Company is an Ameren Corporation subsidiary that operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri, doing business as Ameren Missouri. Ameren Missouri is a financial reporting segment of Ameren Corporation.
Ameren Services – Ameren Services Company, an Ameren Corporation subsidiary that provides support services, such as accounting, legal, treasury, and asset management services, to Ameren (parent) and its subsidiaries.
Ameren Transmission – An Ameren Corporation financial reporting segment primarily consisting of the aggregated electric transmission businesses of Ameren Illinois and ATXI.
AMF – Ameren Missouri Securitization Funding I, LLC, a special purpose entity wholly owned by Ameren Missouri, was formed in 2024, for the purpose of issuing and servicing securitized utility tariff bonds related to Rush Island Energy Center retirement costs.
ARO – Asset retirement obligation.
ATM program – At-the-market equity distribution program.
ATXI – Ameren Transmission Company of Illinois, an Ameren Corporation subsidiary that operates a FERC rate-regulated electric transmission business in the MISO.
Baseload – The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Base rate – The service rate charged to customers, which varies by segmentation within customer classes, excludes rates applicable to riders, and is determined by the ratemaking process used to establish the annual revenue requirement applicable to such service.
Btu – British thermal unit, a standard unit for measuring the quantity of heat energy required to raise the temperature of one pound of water by one degree Fahrenheit.
CCN – Certificate of convenience and necessity.
CCR – Coal combustion residuals, which include fly ash, bottom ash, boiler slag, and flue gas desulfurization materials generated from burning coal to generate electricity.
CCR Rule – Coal Combustion Residuals Rule, an EPA rule that established requirements for the disposal of CCR in landfills and surface impoundments, and the operation and closure of such landfills and surface impoundments.
CDP – A not-for-profit entity that administers a global disclosure system related to environmental matters, among other things.
CEJA – Climate and Equitable Jobs Act, an Illinois law that, among other things, gives Ameren Illinois the option to establish new electric distribution rates through either a traditional regulatory rate review, which may be based on a future test year, or an MYRP for a four-year period.
CO2 – Carbon dioxide.
CODMs – Chief operating decision makers.
COLI – Company-owned life insurance.
Customer demand charges – Revenues from nonresidential customers based on their peak demand during a specified time interval.
Cooling degree days – The summation of positive differences between the average daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of electricity demand by residential and commercial customers for summer cooling.
Credit Agreements – The Illinois Credit Agreement and the Missouri Credit Agreement, collectively.
CSAPR – Cross-State Air Pollution Rule, an EPA rule that requires states that contribute to air pollution in downwind states to limit air emissions from fossil-fuel-fired electric generating units.
CT – Combustion turbine, used primarily for peaking electric generation capacity.
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Deferred payment arrangement – A payment option that allows certain Ameren Missouri and Ameren Illinois retail customers to pay a utility bill balance over an extended period of time, generally up to 12 months.
Dekatherm – A standard unit of energy equivalent to approximately one million Btus.
DOE – Department of Energy, a United States government agency.
DRPlus – Ameren Corporation’s dividend reinvestment and direct stock purchase plan.
EMANI – European Mutual Association for Nuclear Insurance.
EPA – Environmental Protection Agency, a United States government agency.
ERISA – Employee Retirement Income Security Act of 1974, as amended.
Excess deferred income taxes – Amounts resulting from the revaluation of deferred income taxes subject to regulatory ratemaking, which will be refunded to customers. Deferred income taxes are revalued when federal or state income tax rates decrease, and the offset to the revaluation of deferred income taxes subject to regulatory ratemaking is recorded to a regulatory liability.
Exchange Act – Securities Exchange Act of 1934, as amended.
FAC – Fuel adjustment clause, a fuel and purchased power rate-adjustment mechanism that allows Ameren Missouri to recover or refund, through customer rates, 95% of the variance in net energy costs from the amount set in base rates without a traditional regulatory rate review, subject to MoPSC prudence reviews.
FEJA – Future Energy Jobs Act, an Illinois law that allows Ameren Illinois to earn a return on its electric energy-efficiency investments, decouples electric distribution revenues from sales volumes, offers customer rebates for installing distributed generation, and includes extensions and modifications of certain IEIMA performance-based framework provisions, among other things. The decoupling provisions ensure that electric distribution revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions.
FERC – Federal Energy Regulatory Commission, a United States government agency that regulates utility businesses and associated activities of holding and related service companies, including Ameren (parent), Ameren Missouri, Ameren Illinois, ATXI, and Ameren Services.
GAAP – Generally accepted accounting principles in the United States.
Grid Plan – Multi-year integrated grid plan, a plan required to be filed with the ICC every four years under the CEJA, which outlines how Ameren Illinois expects to invest in electric distribution infrastructure in order to support grid modernization, clean energy, energy efficiency, and the state of Illinois’ renewable energy, equity, climate, electrification, and environmental goals.
Heating degree days – The summation of negative differences between the average daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of demand for electricity and natural gas for winter heating by residential and commercial customers.
ICC – Illinois Commerce Commission, a state agency that regulates Illinois utility businesses, including Ameren Illinois and ATXI.
IEIMA – Illinois Energy Infrastructure Modernization Act, an Illinois law that established a performance-based formula process for determining electric distribution service rates. Ameren Illinois established electric distribution rates through 2023 under this law.
Illinois Credit Agreement –Ameren’s and Ameren Illinois’ $1.2 billion senior unsecured credit agreement, which expires in December 2028, unless extended.
IPA – Illinois Power Agency, a state government agency that has broad authority to assist in the procurement of electric power for residential and small commercial customers.
IRA –The Inflation Reduction Act of 2022, federal legislation enacted in August 2022, which includes various provisions, such as expanded production and investment tax credits for clean energy investments, transferability of certain tax credits to an unrelated party for cash, and a corporate alternative minimum tax on certain entities, among other things.
IRS – Internal Revenue Service, a United States government agency.
Kilowatthour – A measure of electricity consumption equivalent to the use of 1,000 watts of power over one hour.
MATS – Mercury and Air Toxics Standards, an EPA rule that limits emissions of mercury and other air toxics from coal- and oil-fired electric generating units.
MEEIA – A rate-adjustment mechanism allowed under the Missouri Energy Efficiency Investment Act, a Missouri law that allows electric utilities to recover costs and performance incentives, if any, related to MoPSC-approved customer energy-efficiency and demand response programs without a traditional regulatory rate review, subject to MoPSC prudence reviews.
MEEIA 2019 –Ameren Missouri’s portfolio of customer energy-efficiency and demand response programs, recovery of lost electric revenues, and performance incentives for March 2019 through December 2024, pursuant to Missouri law, as approved by the MoPSC in December 2018.
MEEIA 2025– Ameren Missouri’s portfolio of customer energy-efficiency and demand response programs, recovery of lost electric revenues, and performance incentives for January 2025 through February 2028, pursuant to Missouri law, as approved by the MoPSC in November 2024.
MGP – Manufactured gas plant.
MISO – Midcontinent Independent System Operator, Inc., an RTO.
Missouri Credit Agreement –Ameren’s and Ameren Missouri’s $1.4 billion senior unsecured credit agreement, which expires in December 2028, unless extended.
Mmbtu – One million Btus.
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Money pool – Borrowing agreements among Ameren and its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements.
Moody’s – Moody’s Investors Service, Inc., a credit rating agency.
MoOPC – Missouri Office of Public Counsel.
MoPSC – Missouri Public Service Commission, a state agency that regulates Missouri utility businesses, including Ameren Missouri.
MRO– Midwest Reliability Organization, one of the regional electric reliability councils organized for coordinating the planning and operation of the United States’ bulk power supply.
MTM – Mark-to-market.
MW – Megawatt.
MWh – Megawatthour, one thousand kilowatthours.
MYRP – Multi-year rate plan, a four-year electric distribution service rate plan allowed to be filed with the ICC under the CEJA. Under a multi-year rate plan, the ICC approves base rates for electric distribution service charged to customers for each calendar year of a four-year period. Ameren Illinois reconciles its actual revenue requirement to the ICC-approved electric distribution service rates on an annual basis, subject to a reconciliation cap with exclusions for certain costs and riders, and adjustments to the ICC-determined ROE for performance incentives and penalties.
Native load – End-use retail customers whom Ameren Missouri or Ameren Illinois is obligated to serve by statute, franchise, contract, or other regulatory requirement.
NAV – Net asset value per share.
NEIL – Nuclear Electric Insurance Limited, which includes all of its affiliated companies.
NERC – North American Electric Reliability Corporation.
Net energy costs – Net energy costs, as defined in the FAC, which include fuel, fuel transportation, certain fuel additives, ash disposal costs and revenues, emission allowances, and purchased power costs, net of off-system sales and capacity revenues. Substantially all transmission revenues and charges are excluded from net energy costs. All off-system sales from the High Prairie and Atchison energy centers are excluded as those sales are included in the RESRAM.
Net metering – Net metering allows customers who generate their own electricity or subscribe to receive output from eligible facilities to feed electricity they do not use back into the grid. Customers receive a credit for the energy they add to the grid.
NOx – Nitrogen oxides.
NPNS – Normal purchases and normal sales.
NRC – Nuclear Regulatory Commission, a United States government agency that regulates commercial nuclear power plants and uses of nuclear materials.
NSPS – New Source Performance Standards, provisions under the Clean Air Act.
NSR – New Source Review provisions of the Clean Air Act, which include Nonattainment New Source Review and Prevention of Significant Deterioration regulations.
NYSE – New York Stock Exchange, LLC.
OCI – Other comprehensive income (loss) as defined by GAAP.
Off-system sales revenues – Revenues from other than native load sales, including wholesale sales.
PGA – Purchased gas adjustment tariffs, a rate-adjustment mechanism that permits prudently incurred natural gas costs to be recovered directly from utility customers without a traditional regulatory rate review, subject to regulatory prudence reviews.
PHMSA – Pipeline and Hazardous Materials Safety Administration, a United States government agency.
PISA – Plant-in-service accounting regulatory mechanism, a mechanism under Missouri law that permits electric utilities to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on rate base for certain property, plant, and equipment placed in service, and not included in base rates, subject to MoPSC prudence reviews. The rate base on which the return is calculated incorporates qualifying capital expenditures not included in base rates, as well as changes in total accumulated depreciation excluding retirements and plant-related deferred income taxes. The regulatory asset for accumulated PISA deferrals earns a return at the applicable WACC. The PISA is effective through 2028, unless Ameren Missouri requests and receives MoPSC approval of an extension through 2033.
QIP – Qualifying infrastructure plant, a rate-adjustment mechanism that provided Ameren Illinois’ natural gas business with recovery of, and a return on, qualifying infrastructure plant investments that were placed in service between regulatory rate reviews, subject to ICC prudence reviews. The QIP expired in December 2023.
Rate base –The basis on which a rate-regulated utility is permitted to earn a WACC. This basis is the net investment in assets used to provide utility service, which generally consists of in-service property, plant, and equipment, net of accumulated depreciation and accumulated deferred income taxes, inventories, and, depending on jurisdiction, construction work in progress.
RBA – Revenue balancing adjustment rider, a rate-adjustment mechanism for Ameren Illinois’ electric distribution business that decouples electric distribution revenues approved by the ICC from actual sales volumes and/or wholesale and miscellaneous revenue and allows Ameren Illinois to adjust electric distribution service rates charged to customers without an MYRP or a traditional regulatory rate review, subject to ICC prudence reviews. The rider ensures that Ameren Illinois’ electric distribution revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions, or wholesale and miscellaneous revenues.
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Regulatory lag – The exposure to differences in costs incurred and actual sales volumes as compared with the associated amounts included in customer rates. Rate increase requests in traditional regulatory rate reviews can take up to 11 months to be acted upon by the MoPSC and the ICC. As a result, revenue increases authorized by regulators will lag changing costs and sales volumes when based on historical periods.
RESRAM – Renewable energy standard rate-adjustment mechanism, a regulatory mechanism allowed under Missouri law that enables Ameren Missouri to recover costs relating to compliance with Missouri’s renewable energy standard, including recovery of investments in wind generation and other renewables, and earn a return at the applicable WACC on those investments not already provided for in customer rates or any other recovery mechanism by adjusting customer rates on an annual basis without a traditional regulatory rate review, subject to MoPSC prudence reviews. RESRAM regulatory assets earn carrying costs at short-term interest rates.
Revenue requirement – The cost of providing utility service to customers, which is calculated as the sum of a utility’s recoverable operating expenses, a return at the weighted-average cost of capital on rate base, and an amount for income taxes, based on the currently applicable statutory income tax rates and amortization associated with excess deferred income taxes.
RFP– Request for proposal.
Rider– A rate-adjustment mechanism that allows for the recovery, or refund, through customer rates of amounts specified by the mechanism without a traditional regulatory rate review.
ROE– Return on common equity.
RTO– Regional transmission organization.
S&P– S&P Global Ratings, a credit rating agency.
SEC – Securities and Exchange Commission, a United States government agency.
SERC – SERC Reliability Corporation, one of the regional electric reliability councils organized for coordinating the planning and operation of the United States’ bulk power supply.
Smart Energy Plan – Ameren Missouri’s plan to upgrade Missouri’s electric grid through at least 2029. Planned upgrades include investments to improve reliability and accommodate more renewable energy.
SO2– Sulfur dioxide.
STEM – Science, technology, engineering, and math.
TCJA – The Tax Cuts and Jobs Act of 2017, federal income tax legislation enacted in December 2017, which significantly changed the tax laws applicable to business entities. The TCJA includes specific provisions related to regulated public utilities.
Testyear– The selected period of time, typically a 12-month period, for which a utility’s historical or forecasted operating results are used to determine the revenue requirement in a regulatory rate review.
Tracker – a regulatory recovery mechanism that allows for the deferral of differences between actual costs incurred and base level expenses included in customer rates as a regulatory asset or liability. The difference is included in base rates and recovered from, or refunded to, customers over a period of time as determined in a subsequent regulatory rate review.
TSR– Total shareholder return, the cumulative return of a common stock or index over a specified period of time assuming all dividends are reinvested.
VBA– Volume balancing adjustment, a rate-adjustment mechanism for Ameren Illinois’ natural gas business that decouples natural gas revenues from actual sales volumes and allows Ameren Illinois to adjust customer rates without a traditional regulatory rate review, subject to ICC prudence reviews. The rider ensures that Ameren Illinois’ natural gas revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions, for residential and small nonresidential customers.
WACC – Weighted-average cost of capital, which is the weighted-average cost of debt and equity, as allowed by the applicable regulator.
WNAR – Weather normalization adjustment rider, a rate-adjustment mechanism that allows Ameren Missouri to adjust natural gas delivery service rates charged to residential customers without a traditional regulatory rate review, subject to MoPSC prudence reviews, when deviations from normal weather conditions cause natural gas revenues to vary from the related revenue requirement approved by the MoPSC in the previous regulatory rate review.
Zero emission credit – A credit that represents the environmental attributes of one MWh of energy produced from certain zero emissions nuclear-powered generation facilities, which certain Illinois utilities are required to purchase pursuant to the FEJA.
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FORWARD-LOOKING STATEMENTS
Statements in this report not based on historical facts are considered “forward-looking” and, accordingly, involve risks and uncertainties that could cause actual results to differ materially from those discussed. Although such forward-looking statements have been made in good faith and are based on reasonable assumptions, there is no assurance that the expected results will be achieved. These statements include (without limitation) statements as to future expectations, beliefs, plans, projections, strategies, targets, estimates, objectives, events, conditions, and financial performance. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed within Risk Factors under Part I, Item 1A, of this report, and elsewhere in this report and in our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
•regulatory, judicial, or legislative actions, and any changes in regulatory policies and ratemaking determinations that may change regulatory recovery mechanisms, such as those that may result from Ameren Missouri’s electric service regulatory rate review filed with the MoPSC in June 2024, Ameren Missouri’s natural gas delivery service regulatory rate review filed with the MoPSC in September 2024, Ameren Illinois’ appeal of both the December 2023 ICC order for the MYRP electric distribution service regulatory rate review and June 2024 rehearing order to the Illinois Appellate Court for the Fifth Judicial District, Ameren Illinois’ natural gas delivery service regulatory rate review filed with the ICC in January 2025, and FERC’s December 2024 notice indicating a future order will be issued related to rehearing requests on the October 2024 FERC order regarding the allowed base ROE under the MISO tariff along with the January 2025 appeal of FERC’s October 2024 order by the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI;
•our ability to control costs and make substantial investments in our businesses, including our ability to recover costs and investments, and to earn our allowed ROEs, within frameworks established by our regulators, while maintaining affordability of services for our customers;
•the effect and duration of Ameren Illinois’ election to utilize MYRPs for electric distribution service ratemaking effective for rates beginning in 2024, including the effect of the reconciliation cap on the electric distribution revenue requirement;
•the effect of Ameren Illinois’ use of the performance-based formula ratemaking framework for its participation in electric energy-efficiency programs, and the related impact of the direct relationship between Ameren Illinois’ ROE and the 30-year United States Treasury bond yields;
•the effect on Ameren Missouri of any customer rate caps or limitations on increasing the electric service revenue requirement pursuant to Ameren Missouri’s election to use the PISA;
•Ameren Missouri’s ability to construct and/or acquire wind, solar, and other renewable energy generation facilities and battery storage, as well as natural gas-fired energy centers, extend the operating license for the Callaway Energy Center, retire fossil fuel-fired energy centers, and implement new or existing customer energy-efficiency programs, including any such construction, acquisition, retirement, or implementation in connection with its Smart Energy Plan, preferred resource plan, or emissions reduction goals, and to recover its cost of investment, a related return, and, in the case of customer energy-efficiency programs, any lost electric revenues in a timely manner, each of which is affected by the ability to obtain all necessary regulatory and project approvals, including CCNs from the MoPSC or any other required approvals;
•Ameren Missouri’s ability to use or transfer federal production and investment tax credits related to renewable energy projects and nuclear energy production; the cost of wind, solar, and other renewable generation and battery storage technologies; and our ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost for each facility;
•the outcome of competitive bids related to requests for proposals and project approvals, including CCNs from the MoPSC and the ICC or any other required approvals, associated with the MISO’s long-range transmission planning;
•the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments, including as they relate to the construction and acquisition of electric and natural gas utility infrastructure and the ability of counterparties to complete projects, which is dependent upon the availability of necessary materials and equipment, including those obligations that are affected by supply chain disruptions;
•advancements in energy technologies, including carbon capture, utilization, and sequestration, hydrogen fuel for electric production and energy storage, next generation nuclear, and large-scale long-cycle battery energy storage, and the impact of federal and state energy and economic policies with respect to those technologies;
•the effects of changes in federal, state, or local laws and other domestic or international governmental actions, including monetary, fiscal, foreign trade, and energy policies, tariffs, or extended federal government shutdowns or defunding;
•the effects of changes in federal, state, or local tax laws or rates; additional regulations, interpretations, amendments, or technical corrections to, or in connection with the IRA, including the effects of the IRA as it relates to income tax payments or the transferability of production and investment tax credits and the 15% minimum tax on adjusted financial statement income; and challenges to the tax positions taken by the Ameren Companies, if any, as well as resulting effects on customer rates and the recoverability of the minimum tax imposed under the IRA;
•the effects on energy prices and demand for our services resulting from customer growth patterns or usage, including demand from data centers, technological advances, including advances in customer energy efficiency, electric vehicles, electrification of various industries,
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energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming increasingly cost-competitive;
•the cost and availability of fuel, such as low-sulfur coal, natural gas, and enriched uranium used to produce electricity; the cost and availability of natural gas for distribution and the cost and availability of purchased power, including capacity, zero emission credits, renewable energy credits, and emission allowances; and the level and volatility of future market prices for such commodities and credits;
•disruptions in the delivery of fuel, failure of our fuel suppliers to provide adequate quantities or quality of fuel, or lack of adequate inventories of fuel, including nuclear fuel assemblies primarily from the one NRC-licensed supplier of assemblies for Ameren Missouri’s Callaway Energy Center;
•the cost and availability of transmission capacity required for the energy generated by Ameren Missouri’s energy centers or required to satisfy our energy sales;
•the effectiveness of our risk management strategies and our use of financial and derivative instruments;
•the ability to obtain sufficient insurance or, in the absence of insurance, the ability to timely recover uninsured losses from our customers;
•the impact of cyberattacks and data security risks on us, our suppliers, or other entities on the grid, which could, among other things, result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the loss of data, such as customer, employee, financial, and operating system information;
•acts of sabotage, which have increased in frequency and severity within the utility industry, war, terrorism, or other intentionally disruptive acts;
•business, economic, geopolitical, and capital market conditions, including tariffs or trade wars, evolving federal regulatory priorities, and the impact of such conditions on interest rates, inflation, and investments;
•the impact of inflation or a recession on our customers and suppliers and the related impact on our results of operations, financial position, and liquidity;
•disruptions of the capital and credit markets, deterioration in credit metrics of the Ameren Companies, or other events that may have an adverse effect on the cost or availability of capital, including short-term credit and liquidity, and our ability to access the capital and credit markets on reasonable terms when needed;
•the actions of credit rating agencies and the effects of such actions;
•the impact of weather conditions and other natural conditions on us and our customers, including the impact of system outages and the level of wind and solar resources;
•the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets;
•the ability to maintain system reliability during and after the transition to clean energy generation by Ameren Missouri and the electric utility industry as well as Ameren Missouri’s ability to meet generation capacity obligations;
•the effects of failures of electric generation, electric and natural gas transmission or distribution, or natural gas storage facilities systems and equipment, which could result in unanticipated liabilities or unplanned outages;
•the operation of Ameren Missouri’s Callaway Energy Center, including planned and unplanned outages, as well as the ability to recover costs associated with such outages and the impact of such outages on off-system sales and purchased power, among other things;
•Ameren Missouri’s ability to recover the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs;
•the impact of current environmental laws or their interpretation and new, more stringent, or changing requirements, including those related to NSR, CO2, NOx, and other emissions and discharges, Illinois emission standards, cooling water intake structures, CCR, energy efficiency, and wildlife protection, that could limit or terminate the operation of certain of Ameren Missouri’s energy centers, increase our operating costs or investment requirements, result in an impairment of our assets, cause us to sell our assets, reduce our customers’ demand for electricity or natural gas, or otherwise have a negative financial effect;
•the impact of complying with renewable energy standards in Missouri and Illinois and with the zero emission standard in Illinois;
•the effectiveness of Ameren Missouri’s customer energy-efficiency programs and the related revenues and performance incentives earned under its MEEIA programs;
•Ameren Illinois’ ability to achieve the performance standards applicable to its electric distribution business and electric customer energy-efficiency goals and the resulting impact on its allowed ROE;
•labor disputes, work force reductions, our ability to attract and retain professional and skilled-craft employees, changes in future wage and employee benefits costs, including those resulting from changes in discount rates, mortality tables, returns on benefit plan assets, and other assumptions;
•the impact of negative opinions of us or our utility services that our customers, investors, legislators, regulators, creditors, rating agencies or other stakeholders may have or develop, which could result from a variety of factors, including failures in system reliability, failure to implement our investment plans or to protect sensitive customer information, increases in rates, negative media coverage, or concerns about company policies or practices;
•the impact of adopting new accounting and reporting guidance;
•the effects of strategic initiatives, including mergers, acquisitions, and divestitures;
•legal and administrative proceedings;
•pandemics or other significant global health events, and their impacts on our results of operations, financial position, and liquidity;
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•the impacts of the Russian invasion of Ukraine and conflicts in the Middle East, related sanctions imposed by the United States and other governments, and any broadening of these or other global conflicts, including potential impacts on the cost and availability of fuel, natural gas, enriched uranium, and other commodities, materials, and services; and
•the inability of our counterparties to perform their obligations, disruptions in the capital and credit markets, prolonged government shutdowns or defunding, acts of sabotage or terrorism, including cyberattacks and physical attacks, and other impacts on business, economic, and geopolitical conditions, including inflation, tariffs, trade wars, or recession.
New factors emerge from time to time, and it is not possible for management to predict all of such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statement. Given these uncertainties, undue reliance should not be placed on these forward-looking statements. Except to the extent required by the federal securities laws, we undertake no obligation to update or revise publicly any forward-looking statements to reflect new information or future events.
PART I
ITEM 1. BUSINESS
GENERAL
Ameren, formed in 1997 and 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.
Below is a summary description of Ameren’s principal subsidiaries – Ameren Missouri, Ameren Illinois, and ATXI. Ameren also has other subsidiaries that conduct other activities, such as providing shared services. A more detailed description can be found in Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
•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.
For additional information about the development of our businesses, our business operations, and factors affecting our results of operations, financial position, and liquidity, see Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Note 1 – Summary of Significant Accounting Policies and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
BUSINESS SEGMENTS
Ameren has four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. The Ameren Missouri segment includes all of the operations of Ameren Missouri. Ameren Illinois Electric Distribution consists of the electric distribution business of Ameren Illinois. Ameren Illinois Natural Gas consists of the natural gas business of Ameren Illinois. Ameren Transmission primarily consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI.
Ameren Missouri has one segment. Ameren Illinois has three segments: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission.
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An illustration of the Ameren Companies’ reporting structures is provided below:
(a) Ameren Missouri consolidates AMF, which is wholly owned by Ameren Missouri.
(b) The Ameren Transmission segment also includes allocated Ameren (parent) interest charges, as well as other subsidiaries engaged in electric transmission project development and investment.
RATES AND REGULATION
Rates
The rates that Ameren Missouri, Ameren Illinois, and ATXI are allowed to charge for their utility services significantly influence the results of operations, financial position, and liquidity of these companies and Ameren. The electric and natural gas utility industry is highly regulated. The utility rates charged to customers are determined by governmental entities, including the MoPSC, the ICC, and the FERC. Decisions by these entities are influenced by many factors, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, and economic conditions, as well as social and political views. Decisions made by these governmental entities regarding customer rates are largely outside of our control. These decisions, as well as the regulatory lag involved in the process of obtaining approval for new customer rates, could have a material adverse effect on the results of operations, financial position, and liquidity of the Ameren Companies. The extent of the regulatory lag varies for each of Ameren’s electric and natural gas jurisdictions, with the Ameren Transmission business experiencing the least amount of regulatory lag. Depending on the jurisdiction, the effects of regulatory lag are mitigated by various means, including annual revenue requirement reconciliations, the decoupling of revenues from sales volumes to ensure revenues approved in a regulatory rate review are not affected by changes in sales volumes, the recovery of certain capital investments between traditional regulatory rate reviews, the level and timing of expenditures, the use of future test years to establish customer rates, and the use of trackers and riders.
The MoPSC regulates rates and other matters for Ameren Missouri. The ICC regulates rates and other matters for Ameren Illinois. The MoPSC and the ICC regulate non-rate utility matters for ATXI. ATXI does not have retail distribution customers; therefore, the MoPSC and the ICC do not have authority to regulate ATXI’s rates. The FERC regulates Ameren Missouri’s, Ameren Illinois’, and ATXI’s cost-based rates for the wholesale transmission and distribution of energy in interstate commerce and various other matters discussed below under General Regulatory Matters.
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The following table summarizes the key terms of the rate orders in effect for customer billings for each of Ameren’s utilities as of January 1, 2025, except as noted:
Ameren Missouri
Electric service(b) MoPSC June 2023 July 2023 (c) (c) (c) 50%
Natural gas delivery service MoPSC December 2021 February 2022 (d) (d) $0.3 2%
Ameren Illinois
Electric transmission service(g) FERC (g) January 2025 10.48% 54.91% $4.4 6%
ATXI
Electric transmission service(g) FERC (g) January 2025 10.48% 60.08% $1.6 3%
(a)Includes pass-through costs recovered from customers, such as purchased power for electric distribution delivery service and natural gas purchased for resale for natural gas delivery service, and intercompany eliminations.
(b)Ameren Missouri’s electric generation, transmission, and delivery service rates are bundled together and charged to retail customers under a combined electric service rate. Because the bundled rates charged to MoPSC retail customers include the revenue requirement associated with Ameren Missouri's FERC-regulated transmission services, the table above does not separately reflect a FERC-authorized rate base or allowed ROE.
(c)This rate order did not specify an ROE, capital structure, or rate base.
(d)This rate order did not specify an ROE or a capital structure.
(e)In December 2024, the ICC issued an order in Ameren Illinois’ MYRP proceeding. The order approved an average annual rate base for 2024, 2025, 2026, and 2027 of $4.2 billion, $4.4 billion, $4.6 billion, and $4.8 billion, respectively. Rate changes consistent with the December 2024 order became effective in late December 2024. Under an MYRP, Ameren Illinois will reconcile its actual revenue requirement, as adjusted for certain cost variations, to ICC-approved electric distribution service rates on an annual basis, subject to a reconciliation cap. The reconciliation cap limits the annual adjustment to 105% of the annual revenue requirement approved by the ICC.
(f)This rate order was based on a 2024 future test year.
(g)Transmission rates are updated annually and become effective each January. They are determined by a company-specific, forward-looking formula ratemaking framework based on each year’s forecasted information. The 10.48% return, which includes a 50-basis-point incentive adder for participation in an RTO, is based on the FERC’s October 2024 order.
For additional information on Ameren Missouri, Ameren Illinois, and ATXI rate matters, see Results of Operations and Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, Quantitative and Qualitative Disclosures About Market Risk under Part II, Item 7A, and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
General Regulatory Matters
Ameren Missouri, Ameren Illinois, and ATXI must receive FERC approval to enter into various transactions, such as issuing short-term debt securities and conducting certain acquisitions, mergers, and consolidations. In addition, Ameren Missouri, Ameren Illinois, and ATXI must receive authorization from the applicable state public utility regulatory agency to issue stock and long-term debt securities and to conduct mergers, affiliate transactions, and various other activities.
Ameren Missouri, Ameren Illinois, and ATXI are also subject to mandatory reliability standards, including cybersecurity standards adopted by the FERC, to ensure the reliability of the bulk electric power system. These standards are developed and enforced by the NERC, pursuant to authority delegated to it by the FERC. Ameren Missouri, Ameren Illinois, and ATXI are members of the SERC. The SERC is one of six regional entities and represents all or portions of 16 central and southeastern states under authority from the NERC for the purpose of implementing and enforcing reliability standards approved by the FERC. Ameren Missouri is also a member of the MRO, which is also one of the six regional entities and represents all or portions of 16 central, southern, and midwestern states, as well as two Canadian provinces, under authority from the NERC. The regional entities of the NERC work to safeguard the reliability of the bulk power systems throughout North America. If any of Ameren Missouri, Ameren Illinois, or ATXI is found not to be in compliance with these mandatory reliability standards, it could incur substantial monetary penalties and other sanctions.
Under the Public Utility Holding Company Act of 2005, the FERC and the state public utility regulatory agencies in each state Ameren and its subsidiaries operate in may access books and records of Ameren and its subsidiaries that are found to be relevant to costs incurred by Ameren’s rate-regulated subsidiaries that may affect jurisdictional rates. The act also permits the MoPSC and the ICC to request that the FERC review cost allocations by Ameren Services to other Ameren subsidiaries.
Operation of Ameren Missouri’s Callaway Energy Center is subject to regulation by the NRC. The license for the Callaway Energy Center expires in 2044. Ameren Missouri’s hydroelectric Osage Energy Center and pumped-storage hydroelectric Taum Sauk Energy Center, as licensed projects under the Federal Power Act, are subject to FERC regulations affecting, among other aspects, the general operation and maintenance of the projects. The licenses for the Osage Energy Center and the Taum Sauk Energy Center expire in 2047 and 2044, respectively. Ameren Missouri’s Keokuk Energy Center and its dam on the Mississippi River between Hamilton, Illinois, and Keokuk, Iowa,
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are operated under authority granted by an Act of Congress in 1905. The Keokuk Energy Center dam safety program is regulated by the Illinois Department of Natural Resources.
For additional information on regulatory matters, see Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
Environmental Matters
Our electric generation, transmission, and distribution and natural gas distribution and storage operations must comply with a variety of statutes and regulations relating to the protection of the environment and human health and safety. These environmental statutes and regulations are comprehensive and include the storage, handling, and disposal of waste materials and hazardous substances, emergency planning and response requirements, limitations and standards applicable to discharges from our facilities into the air or water that are enforced through permitting requirements, and natural resource protection laws, including those related to endangered species. Federal and state authorities periodically review and modify existing regulations and adopt new regulations, which may impact our planning process and the ultimate implementation of these or other new or revised regulations. Recent and potential new executive orders issued by the current federal administration as well as local and state land use requirements can also impact our planning activities.
For discussion of environmental matters, including NOx and SO2 emission reduction requirements, regulation of CO2 emissions, wastewater discharge standards, remediation efforts, and CCR management regulations, and a discussion of litigation against Ameren Missouri with respect to NSR, the Clean Air Act, and Missouri law in connection with projects at Ameren Missouri’s Rush Island Energy Center, see Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
TRANSMISSION
Ameren owns an integrated transmission system that is composed of the transmission assets of Ameren Missouri, Ameren Illinois, and ATXI. Ameren also operates two MISO balancing authority areas: AMMO and AMIL. The AMMO balancing authority area includes the load and most energy centers of Ameren Missouri, and had a peak demand of 7,560 MWs in 2024. The AMIL balancing authority area includes the load of Ameren Illinois and certain Ameren Missouri energy centers located in Illinois, and had a peak demand of 8,479 MWs in 2024. The Ameren transmission system directly connects with 15 other balancing authority areas for the exchange of electric energy.
Ameren Missouri, Ameren Illinois, and ATXI are transmission-owning members of the MISO. Ameren Missouri is authorized by the MoPSC to participate in the MISO for an indefinite term, subject to the MoPSC’s authority to require future proceedings if an event or circumstance occurs that significantly affects Ameren Missouri’s position in the MISO. Ameren Illinois’ election to participate in the MISO is subject to the ICC’s oversight.
SUPPLY OF ELECTRIC POWER
Capacity
Ameren Missouri sells all of its capacity to the MISO and purchases the capacity it needs to supply its native load sales from the MISO. Ameren Illinois purchases capacity from the MISO and through bilateral contracts resulting from IPA procurement events. In 2022, the FERC issued an order approving changes to the annual MISO capacity auction. Historically, the auctions were designed to cover annual peak demand plus a target reserve margin. Beginning with the April 2023 auction for the June 2023 to May 2024 planning year, auctions include four seasonal load forecasts and available capacity levels and are designed to cover each season’s peak demand plus a target reserve margin. The seasonal auction structure was established to help to address variability in resources as the MISO begins to rely more heavily on renewable generation.
Ameren Missouri
Ameren Missouri’s electric supply is primarily generated from its energy centers. Factors that could cause Ameren Missouri to purchase power include, among other things, energy center outages, the fulfillment of renewable energy requirements, extreme weather conditions, the availability of power at a cost lower than its generation cost, and the lack of sufficient owned generation availability.
Ameren Missouri files a long-term nonbinding preferred resource plan with the MoPSC every three years. The most recent preferred resource plan was filed in September 2023. Ameren Missouri expects to file a notice of change in its preferred resource plan with the MoPSC in February 2025 to address new load growth opportunities resulting from entities in various industries, including data center and manufacturing, that are considering either locating or expanding their operations within Ameren Missouri’s service territory. The 2025 Change to the 2023 PRP is expected to include, among other things, the following:
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•adding 1,600 MWs of natural gas-fired simple-cycle generation by 2030, which includes the 800-MW Castle Bluff Natural Gas Project discussed in Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report, and an additional 1,200 MWs by 2043;
•adding 2,100 MWs of natural gas-fired combined-cycle generation by 2035 and an additional 1,200 MWs by 2040;
•adding 3,200 MWs of renewable generation by 2030, which includes the 900 MWs of solar generation projects discussed in Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report, and an additional 1,500 MWs by 2035;
•adding 1,000 MWs of battery storage by 2030 and an additional 800 MWs by 2042;
•adding 1,500 MWs of nuclear generation by 2040;
•retiring all of Ameren Missouri’s coal-fired energy centers by 2042;
•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.
The addition of renewable, natural gas-fired, or nuclear generation facilities is subject to obtaining necessary project approvals, including FERC approval and the issuance of a CCN by the MoPSC, as applicable. Ameren Missouri would be adversely affected if the MoPSC does not allow recovery of the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs. The next preferred resource plan is required to be filed by October 2026.
Ameren Missouri continues to evaluate its longer-term needs for new generating capacity. The need for investment in new sources of energy is dependent on several key factors, including continuation of and customer participation in energy-efficiency programs, the amount of distributed generation from customers, load growth, including demand from data centers, technological advancements, costs of generation alternatives, environmental regulation of coal-fired and natural gas-fired power plants, changes in United States energy policy and priorities under the current federal administration, and state renewable energy requirements, which could lead to the retirement of current baseload assets before the end of their current useful lives or alterations in the way those assets operate, which could result in increased capital expenditures and/or increased operations and maintenance expenses. Because of the significant time required to plan, acquire permits for, and build a baseload energy center, Ameren Missouri continues to study alternatives and to take steps to preserve options to meet future demand. Steps include evaluating the potential for further diversification of Ameren Missouri’s generation portfolio through renewable energy generation, including wind and solar generation, natural gas-fired generation, including the potential to switch to hydrogen fuel and/or blend hydrogen fuel with natural gas and install carbon capture technology, extending the operating license for the Callaway Energy Center, additional customer energy-efficiency and demand response programs, distributed energy resources, and energy storage.
Missouri law required Ameren Missouri to offer solar rebates through December 2023 and currently requires Ameren Missouri to offer net metering to certain customers that install renewable generation at their premises. The difference between the cost of the solar rebates and the amount set in base rates was deferred as a regulatory asset or liability under the RESRAM, and earns carrying costs at short-term interest rates. Customers that elect to enroll in net metering are allowed to net their generation against their distribution usage within each billing month.
Ameren Illinois
In Illinois, while electric transmission and distribution service rates are regulated, power supply prices are not. Although electric customers are allowed to purchase power from an alternative retail electric supplier, Ameren Illinois is required to be the provider of last resort for its electric distribution customers. In 2024, 2023, and 2022, Ameren Illinois procured power on behalf of its customers for 25%, 28%, and 28%, respectively, of its total kilowatthour sales. Power purchased by Ameren Illinois for its electric distribution customers who do not elect to purchase their power from an alternative retail electric supplier comes either through procurement processes conducted by the IPA or through markets operated by the MISO. The IPA administers an RFP process through which Ameren Illinois procures its expected supply. The purchased power and related procurement costs incurred by Ameren Illinois are passed directly to its electric distribution customers through a cost recovery mechanism. Transmission costs are charged to customers who purchase electricity from Ameren Illinois through a cost recovery mechanism. The purchased power, power procurement, and transmission costs are reflected in Ameren Illinois Electric Distribution’s results of operations, but do not affect Ameren Illinois Electric Distribution’s earnings because these costs are offset by corresponding revenues. Ameren Illinois charges distribution service rates to electric distribution customers who purchase electricity, regardless of supplier, which does affect Ameren Illinois Electric Distribution’s earnings.
Pursuant to the CEJA, Ameren Illinois is required to file a Grid Plan with the ICC every four years. In December 2024, the ICC issued an order approving Ameren Illinois’ revised Grid Plan under its MYRP proceeding for electric distribution service for 2024 through 2027. For additional information regarding Ameren Illinois’ MYRP proceeding, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report. The Grid Plan outlines how Ameren Illinois expects to invest in electric distribution infrastructure in order to support grid modernization, clean energy, energy efficiency, and the state of Illinois’ renewable energy, equity, climate, electrification, and environmental
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goals. Ameren Illinois’ next Grid Plan is required to be filed by mid-January 2026.
Illinois law requires Ameren Illinois to offer rebates and net metering to certain customers who install renewable generation or paired energy storage systems at their premises. The cost of the customer generation rebate program is deferred as a regulatory asset, which earns a return at the applicable WACC. Customers that elect to receive a generation rebate and are enrolled in net metering are allowed to net their power supply service charges, but not their distribution service charges. Customers that elect to receive energy storage rebates and have not received generation rebates are allowed to net their power supply and distribution service charges. By law, Ameren Illinois’ electric distribution revenues are decoupled from sales volumes, which ensures that the electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes.
POWER GENERATION
Ameren Missouri owns energy centers that rely on a diverse fuel portfolio, including coal, nuclear, and natural gas, as well as renewable sources of generation. Both of Ameren Missouri’s coal-fired energy centers were constructed prior to 1978. As of December 31, 2024, Ameren Missouri’s coal-fired energy centers represented 6% and 11% of Ameren’s and Ameren Missouri’s rate base, respectively. The Callaway Energy Center began operation in 1984 and is licensed to operate until 2044. Ameren Illinois operates two solar generation facilities, which are two of three pilot solar projects Ameren Illinois is allowed to invest in under the CEJA. The third solar generation facility is planned to be placed in service before the end of 2026. See Item 2 – Properties under Part I of this report for information regarding our energy centers.
Coal
Ameren Missouri has an ongoing need for coal as fuel for generation, and pursues a price-hedging strategy consistent with this requirement. Ameren Missouri has agreements in place to purchase and transport coal to its energy centers. While Ameren Missouri has minimum purchase obligations associated with these agreements, the majority of these agreements are not associated with any specific coal-fired energy center. Ameren Missouri burned approximately 10.7 million tons of coal in 2024. For information regarding the percentages of Ameren Missouri’s projected required supply of coal and coal transportation that are price-hedged through 2029, see Commodity Price Risk under Part II, Item 7A, of this report.
About 97% of Ameren Missouri’s coal is purchased from the Powder River Basin in Wyoming, which has a limited number of suppliers. The remaining coal is typically purchased from the Illinois Basin. Targeted coal inventory levels may be adjusted because of generation levels or uncertainties of supply due to delays in coal deliveries, equipment breakdowns, and other factors. Deliveries from the Powder River Basin have occasionally been restricted because of rail congestion, staffing and equipment issues, infrastructure maintenance, derailments, weather, and supplier financial hardship. Delays and disruptions in coal deliveries could cause Ameren Missouri to pursue a strategy that could include reducing off-system sales of power during low-earning periods, buying higher-cost fuels to generate required electricity, and purchasing power from other sources.
Nuclear
The production of nuclear fuel involves the mining and milling of uranium ore to produce uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride gas, the enrichment of that gas, the conversion of the enriched uranium hexafluoride gas into uranium dioxide fuel pellets, and the fabrication into fuel assemblies. Ameren Missouri has entered into uranium, uranium conversion, uranium enrichment, and fabrication contracts to procure the fuel supply for its Callaway Energy Center.
The Callaway Energy Center requires refueling at 18-month intervals. The last refueling was completed in November 2023. The next refueling is scheduled for the spring of 2025. Ameren Missouri has inventories and supply contracts sufficient to meet all of its uranium (concentrate and hexafluoride), conversion, enrichment, and fabrication requirements at least through the spring 2028 refueling.
Renewable
Ameren Missouri operates several renewable energy centers, which includes hydroelectric, wind, methane gas, and solar energy centers. The High Prairie and Atchison energy centers are wind generation facilities. The Huck Finn, Boomtown, and Cass County energy centers are solar generation facilities. The Osage and Keokuk energy centers generate electricity using hydroelectric dams located on the Lake of the Ozarks and the Mississippi River, respectively. The Maryland Heights Energy Center generates electricity by burning methane gas collected from a landfill.
RENEWABLE ENERGY AND ZERO EMISSION STANDARDS
Missouri and Illinois laws require electric utilities to include renewable energy resources in their portfolios. Ameren Missouri and Ameren Illinois satisfied their renewable energy portfolio requirements in 2024, pending regulatory review by the MoPSC for Ameren Missouri.
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Ameren Missouri
In Missouri, utilities are required to purchase or generate electricity equal to at least 15% of native load sales from renewable energy sources, with at least 2% of the requirement derived from solar energy. The requirement is subject to an average 1% annual limit on increases to customer rates over any 10-year period. For renewable generation facilities located in Missouri, 125% of the electricity generated counts towards meeting the requirement. Ameren Missouri expects to satisfy the requirement in 2025 with its High Prairie, Atchison, Huck Finn, Keokuk, Maryland Heights, and other solar energy centers, along with other renewable energy credits purchased by Ameren Missouri, including solar-generated renewable energy credits purchased from customer-installed systems.
Ameren Illinois
In accordance with Illinois law, Ameren Illinois is required to collect funds from all electric distribution customers to fund IPA procurement events for renewable energy credits. The amount set by law and required to be collected from customers by Ameren Illinois is capped at $4.58 per MWh. The IPA establishes its long-term renewable resources procurement plans in a filing made every two years. In February 2024, the ICC approved the IPA’s latest long-term renewable resources procurement plan, which established the 2024 and 2025 renewable energy credit procurement targets. Based on IPA procurement events that align with the IPA’s plan, Ameren Illinois has contractual commitments to purchase approximately 1.6 million wind renewable energy credits per year and approximately 3.6 million solar renewable energy credits per year. Ameren Illinois has also entered into contracts, ending in 2032, to purchase approximately 0.6 million wind renewable energy credits per year. Pursuant to the CEJA, if funds collected from customers are not used to procure renewable energy credits, they would be refunded to customers pursuant to an annual reconciliation proceeding, the first of which was approved by the ICC in January 2025, which was the June 2017 through May 2018 reconciliation period, and did not result in refunds to customers. Based on amounts collected from customers and obligations under the program, the June 2018 through May 2019 reconciliation period is not expected to result in refunds to customers, pending review by the ICC.
Illinois law also required Ameren Illinois to enter into contracts to purchase zero emission credits in an amount equal to approximately 16% of the actual amount of electricity delivered to retail customers during calendar year 2014, pursuant to Illinois’ zero emission standard. As a result of a 2018 IPA procurement event, which was approved by the ICC, Ameren Illinois entered into agreements to acquire zero emission credits through May 2027. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent planning year. Both renewable energy credits and zero emission credits have cost recovery mechanisms, which allow Ameren Illinois to collect from, or refund to, customers differences between actual costs incurred from the purchase of the credits and the amounts collected from customers.
CUSTOMER ENERGY-EFFICIENCY PROGRAMS
Ameren Missouri and Ameren Illinois have implemented energy-efficiency programs to educate their customers and to help them become more efficient energy consumers. These programs provide incentives to customers for installing newer, more efficient technology, and for using energy in a more conservation-minded manner. As a component of the energy-efficiency programs, Ameren Missouri and Ameren Illinois have invested in electric smart meters to provide customers more visibility to their energy consumption and facilitate more efficient use of energy. As of December 31, 2024, Ameren Missouri and Ameren Illinois have completed the transition to smart meters, which have been installed for nearly all electric and natural gas customers.
Ameren Missouri
In Missouri, the Missouri Energy Efficiency Investment Act established a rider that, among other things, allows electric utilities to recover costs with respect to MoPSC-approved customer energy-efficiency programs. The law requires the MoPSC to ensure that a utility’s financial incentives are aligned to help customers use energy more efficiently, to provide timely cost recovery, and to provide earnings opportunities associated with cost-effective energy-efficiency and demand response programs. Missouri does not have a law mandating energy-efficiency or demand response programs.
In November 2024, the MoPSC issued an order approving a nonunanimous stipulation and agreement for Ameren Missouri’s MEEIA 2025 plan, which includes a portfolio of customer energy-efficiency and demand response programs, along with the continued use of the MEEIA rider. Ameren Missouri intends to invest $51 million annually in 2025 and 2026 and $22 million in 2027 for customer energy-efficiency and demand response programs. In addition, the order approved performance incentives applicable to each plan year to earn revenues by achieving certain spending and demand response goals. If 100% of the goals are achieved in 2025, 2026, and 2027, Ameren Missouri would earn performance incentive revenues of $5 million, $5 million, and $2 million, respectively. Through 2024, Ameren Missouri has invested approximately $415 million in MEEIA 2019 customer energy-efficiency and demand response programs.
The MEEIA rider allows Ameren Missouri to collect from customers its actual program costs, lost electric revenues, and any performance incentive, without a traditional regulatory rate review, subject to MoPSC prudence reviews, until lower volumes resulting from
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the MEEIA programs are reflected in base rates. Customer rates, based upon both forecasted program costs and lost electric revenues and collected via the MEEIA rider, are reconciled annually to actual results.
Ameren Illinois
Pursuant to Illinois law, Ameren Illinois offers customer energy-efficiency programs, and is subject to electric energy-efficiency savings goals and a maximum annual amount of investment in electric energy-efficiency programs. Ameren Illinois’ planned investments in electric energy-efficiency programs is approximately $120 million in 2025 and approximately $125 million annually from 2026 to 2029. Every four years, Ameren Illinois is required to file a four-year electric energy-efficiency plan with the ICC. In June 2022, the ICC issued an order approving Ameren Illinois’ electric and natural gas energy-efficiency plans for 2022 through 2025, as well as regulatory recovery mechanisms. The order authorized electric and natural gas energy-efficiency program expenditures of $476 million and $66 million, respectively, over the four-year period. Ameren Illinois is required to file an updated four-year electric energy-efficiency plan with the ICC by March 2025.
Illinois law allows Ameren Illinois to earn a return on its electric energy-efficiency program investments. Ameren Illinois’ electric energy-efficiency investments are deferred as a regulatory asset and earn a return at the applicable WACC, with the ROE 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 approves Ameren Illinois’ four-year electric energy-efficiency plans, the ICC has the ability to reduce the amount of approved electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs.The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not included in the electric distribution service MYRP framework. Ameren Illinois’ natural gas energy-efficiency program costs are recovered through a rider.
NATURAL GAS SUPPLY FOR DISTRIBUTION
Ameren Missouri and Ameren Illinois are responsible for the purchase and delivery of natural gas to their customers. Ameren Missouri and Ameren Illinois each develop and manage a portfolio of natural gas supply resources. These resources include firm natural gas supply agreements, firm interstate and intrastate transportation capacity, firm no-notice storage capacity leased from interstate pipelines, and on-system storage facilities to maintain natural gas deliveries to customers throughout the year and especially during peak demand periods. Ameren Missouri and Ameren Illinois primarily use Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Natural Gas Pipeline Company of America, Mississippi River Transmission Corporation, Northern Border Pipeline Company, MoGas Pipeline, and Texas Eastern Transmission Corporation interstate pipeline systems to transport natural gas to their systems. In addition to transactions requiring physical delivery, certain financial instruments, including those entered into in the over-the-counter financial markets, are used to hedge the price paid for natural gas. Natural gas supply costs are passed on to customers of Ameren Missouri and Ameren Illinois under PGA clauses, subject to prudence reviews by the MoPSC and the ICC. For information regarding the percentage of Ameren Missouri’s and Ameren Illinois’ projected remaining natural gas supply requirements that are price-hedged through 2029, see Commodity Price Risk under Part II, Item 7A, of this report.
For additional information on our fuel, purchased power, and natural gas for distribution supply, see Results of Operations and Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Commodity Price Risk under Part II, Item 7A, of this report. Also see Note 1 – Summary of Significant Accounting Policies, Note 7 – Derivative Financial Instruments, Note 13 – Related-party Transactions, Note 14 – Commitments and Contingencies, and Note 15 – Supplemental Information under Part II, Item 8, of this report.
HUMAN CAPITAL MANAGEMENT
The execution of Ameren’s core strategy to invest in rate-regulated energy infrastructure, enhance regulatory frameworks and advocate for responsible policies, and optimize operating performance to capitalize on opportunities to benefit our customers, communities, shareholders, and the environment is driven by the capabilities and engagement of our workforce. Ameren’s workforce strategy is designed to promote a skilled workforce that is well-prepared to deliver on Ameren’s mission (To Power the Quality of Life) and vision (Leading the Way to a Sustainable Energy Future), both today and in the future. Our workforce strategy is anchored in four key pillars: Culture, Leadership, Talent, and Rewards, which are discussed further below. Foundational to our workforce strategy are our core competencies of:
Ameren’s chief executive officer and chief human resources officer, with the support of other leaders of the Ameren Companies, are responsible for developing and executing our workforce strategy. In addition to reviewing and determining the Ameren Companies’
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compensation practices and policies for the chief executive officer and other executive officers, the Human Resources Committee of Ameren’s board of directors is responsible for oversight of Ameren’s human capital management practices and policies. The Human Resources Committee and Ameren’s board of directors are updated regularly on human capital matters.
Culture
We strive to cultivate a mission-driven, values-based culture that enables the sustainable execution of our core strategy.
We design our human capital management practices and policies to reinforce our values, shape our culture, and drive employee engagement. In doing so, we strive to align our employees to our mission and vision, improve safety, continuously improve operating performance, attract and retain top talent, and recognize employee contributions, among other things. We assess employee engagement through a variety of channels. As a part of our assessment, we conduct confidential employee engagement surveys to identify areas of strength and opportunities for improvement in our employees’ experience, and take actions aimed at increasing employee engagement. We also offer flexible work arrangements, such as permitting certain employees to work from alternate locations or to make adjustments to an employee’s daily work hours, among other things, complemented by our work to advance the digital enablement of our workforce, and have enhanced our facilities and workforce policies and practices to increase collaboration and productivity.
As a part of our culture, every employee is expected to challenge any unsafe act, complete each workday safely, and provide feedback on safety and security matters. In addition to comprehensive safety and security standards, and mandatory health, safety, and security training programs for applicable employees, we promote programs designed to encourage employees to provide feedback on practices or actions that could harm employees, customers, or the Ameren Companies, including perceived issues related to safety, security (both physical and cyber), ethics and compliance violations, or acts of discrimination.
Leadership
Ameren’s leaders play a critical role in setting and executing Ameren’s strategic initiatives, modeling our values and culture, and engaging and enabling the workforce. As such, we seek to develop a strong leadership team with a variety of experiences and perspectives. Management engages in an extensive succession planning process annually, which includes the involvement of Ameren’s board of directors. We develop our leaders both individually, through job rotations, mentoring and sponsorships, work experiences, and leadership development programs, and as a team. Throughout the year, we offer a variety of forums intended to connect our leaders to our mission, values, strategy and culture, and build leadership skills and capabilities. In addition, we evaluate our organizational structure and make adjustments and expand roles to facilitate execution of our strategy and organizational efficiency.
Talent
In order to attract and retain a skilled and highly qualified workforce, we provide opportunities for employees to expand their knowledge and skill sets, and we support their career development. Our onboarding efforts are designed to ensure early engagement, including the opportunity to participate in mentoring programs. Additionally, employees are encouraged to participate in technical, professional, and leadership development opportunities, and outreach initiatives to engage with the communities that we serve, among other things. As our business needs change, we remain focused on ensuring that our workforce has the tools and skills necessary to deliver on our strategic initiatives.
Our talent management initiatives include a wide range of recruiting partnerships and programs, designed to engage a variety of career seekers. We have established programs to recruit early and mid-career talent to further enhance our workforce pipelines. These programs include skilled craft education and training for individuals interested in skilled craft roles, an intern/co-op program that serves as a pipeline for STEM-related careers, a program for individuals transitioning from military service, and an early career rotation program.
Workforce
The majority of our workforce is comprised of skilled-craft and STEM-related professional and technical employees. Our workforce has been stable, with a total attrition rate of 7% in 2024. The majority of employee attrition is attributable to employee retirements, generally allowing for thoughtful workforce and succession planning in advance of these planned transitions. The following table presents our employee count and their average tenure as of December 31, 2024, and the attrition rate in 2024:
EmployeeCount Average Tenure (in years) AttritionRate
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The following table presents Ameren’s employees by generation as of December 31, 2024:
Generation Description Ameren Ameren Missouri Ameren Illinois Ameren Services
Generation Z/Post Millennial (birth years after 1997) 7% 8% 7% 7%
Collective bargaining units at Ameren’s subsidiaries consist of the International Brotherhood of Electrical Workers, the International Union of Operating Engineers, the Laborer’s International Union of North America, the United Association of Plumbers and Pipefitters, and the United Government Security Officers of America. As of December 31, 2024, these labor unions collectively represented 46%, 59%, 55%, and 10% of the employees at Ameren, Ameren Missouri, Ameren Illinois, and Ameren Services, respectively. The Ameren Companies expect continued constructive relationships with their respective labor unions. The Ameren Missouri collective bargaining unit contracts expire in 2025 and 2026, and cover 4% and 96% of represented employees, respectively. The Ameren Illinois collective bargaining unit contracts expire in 2026 and 2027, and cover 92% and 8% of represented employees, respectively.
Rewards
The primary objective of our rewards program is to provide a total rewards package that attracts and retains a talented workforce and reinforces strong performance in a financially sustainable manner. Management continuously evaluates our core benefits in an effort to create a market-competitive, performance-based, shareholder-aligned total rewards package with a view towards balancing employee value and financial sustainability. We recognize that the rewards package required to attract and retain talent over the long term is about more than pay and benefits; it is about the total employee experience and support of their overall well-being. In addition to base salary, medical benefits, and retirement benefits, including pension for substantially all employees and 401(k) savings, our total rewards package includes short-term incentives and long-term stock-based compensation for certain employees. Further, we offer our employees various programs that encourage overall well-being, including wellness and employee assistance programs. We strive to provide a competitive and sustainable rewards package that supports our ability to attract, engage, and retain a talented and highly qualified workforce, while at the same time reinforcing and rewarding strong performance.
INDUSTRY ISSUES
We are facing issues common to the electric and natural gas utility industry, as well as new and emergent issues impacting the industry as a whole. These issues include:
•the potential for changes in laws, regulations, enforcement efforts, and policies at the federal, state, and international levels, including but not limited to, complex new and proposed environmental laws, such as air and water quality standards, mercury emissions standards, limitations on the use of natural gas in generation, CCR management requirements, and potential CO2 limitations, which may limit, or result in the cessation of, the operation of electric generating units;
•corporate tax law changes, including the IRA, as well as additional interpretations, regulations, amendments, or technical corrections that affect the amount and timing of income tax payments or the transferability of production and investment tax credits, reduce or limit the ability to claim certain deductions and use carryforward tax benefits and/or credits, or result in rate base reductions;
•cybersecurity risks, cyber attacks, including ransomware and other ransom-based attacks and those attacks arising from or generated by artificial intelligence, hacking, social engineering, and other forms of malicious cybersecurity and/or privacy events, which could result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the theft or inappropriate release of certain types of information, including sensitive customer, employee, financial, and operating system information;
•acts of sabotage, which have increased in frequency and severity within the utility industry, terrorism, and other intentionally disruptive acts;
•political, regulatory, and customer resistance to higher rates;
•the impacts from new data centers expected to be constructed over the next several years, including increased competition among utilities, independent power producers and non-traditional market entrants, providing generation and resource adequacy to support the projected load growth, and managing the impact on customer rates;
•the impact and effectiveness of vegetation management programs;
•the potential for reliability issues due to inadequate resources resulting from the retirement of fossil-fuel-fired generation facilities as they are replaced with renewable energy generation sources, increasing load growth, and market inefficiencies related to prices for purchased power, capacity, and ancillary services, and other factors;
•the need to place new transmission and generation facilities in service, which is dependent upon timely regulatory approvals and the availability of necessary labor and materials, among other things, to maintain grid reliability;
•pressure and uncertainty on customer growth and sales volumes in light of increased competition in the industry and economic conditions;
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•the ability to recover and earn a fair return on investments due to changes in the allowed ROE, including ROE incentive adders on FERC-regulated electric transmission assets;
•the influence of macroeconomic factors on yields of United States Treasury securities and on the allowed ROE provided by regulators;
•regulatory lag;
•the availability of fuel, materials and supplies, and equipment, and the potential disruptions in supply chains and inflationary pressures or tariffs on the prices and availability of commodities, labor, services, materials and supplies, elevated interest rates, and impacts associated with extended recovery periods from customers;
•the availability of a skilled work force, including transferring the specialized knowledge of those who are nearing retirement to employees succeeding them;
•maintaining affordability of electric and natural gas utility services for customers, including the demand for access to renewable energy generation at rates acceptable to customers;
•the modernization of the electric grid to accommodate a two-way flow of electricity and increased capacity for distributed generation interconnection;
•net metering rules and other changes in existing regulatory frameworks and recovery mechanisms to address the allocation of costs to customers who own generation resources that enable them both to sell power to us and to purchase power from us through the use of our transmission and distribution assets;
•legislation or programs to encourage or mandate energy efficiency, energy conservation, and renewable sources of power, and the lack of consensus as to how those programs should be paid for;
•higher levels of infrastructure and technology investments and adjustments to customer rates associated with the refund of excess deferred income taxes that have resulted in, and are expected to continue to result in, negative or decreased free cash flow, which is defined as cash flows from operating activities less cash flows from investing activities and dividends paid;
•public concerns about the siting of new facilities, and challenges that members of the public can assert against applications for governmental permits and other approvals required to site and build new facilities that can result in significant cost increases, delays and denial of the permits and approvals by the regulators;
•public concerns about the potential environmental impacts from the combustion of fossil fuels;
•pressure from public interest groups regarding limiting the use of natural gas, as well as proposed restrictions on the use of natural gas by state and local authorities;
•certain investors’ concerns about investing in, as well as certain insurers’ concerns about providing coverage to, utility companies that have coal-fired generation assets;
•scrutiny by investors and other stakeholders of industry practices;
•public concerns about nuclear decommissioning and the disposal of nuclear waste;
•industry challenges resulting from alleged or actual legal, regulatory or compliance failures, including in connection with lobbying and political activities or liabilities arising out of wildfires or other catastrophic events; and
•effects of mergers, acquisitions, and divestitures within the utility industry.
We are monitoring all these issues. Except as otherwise noted in this report, we are unable to predict what impact, if any, these issues will have on our results of operations, financial position, or liquidity. For additional information, see Risk Factors under Part I, Item 1A, Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
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OPERATING STATISTICS
The following tables present key electric and natural gas operating statistics for Ameren for the past three years:
Electric Sales – kilowatthours (in millions):
Ameren Missouri:
Street lighting and public authority 65 71 76
Ameren Illinois Electric Distribution(a):
Street lighting and public authority 386 385 410
Eliminate affiliate sales — (30) (190)
Electric Operating Revenues (in millions):
Ameren Missouri:
Other, including street lighting and public authority 100 124 171
Ameren Illinois Electric Distribution:
Other, including street lighting and public authority (23) (59) (36)
Ameren Illinois Electric Distribution total $ 2,089 $ 2,218 $ 2,256
Ameren Transmission:
Ameren Illinois Transmission(b) $ 564 $ 480 $ 424
Eliminate affiliate revenues (1) (1) (1)
Other and intersegment eliminations (177) (150) (139)
(a)Sales for which power was supplied by Ameren Illinois as well as alternative retail electric suppliers. In 2024, 2023, and 2022, Ameren Illinois procured power on behalf of its customers for 25%, 28%, and 28%, respectively, of its total kilowatthour sales.
(b)Includes $119 million, $113 million, and $104 million in 2024, 2023, and 2022, respectively, of electric operating revenues from transmission services provided to Ameren Illinois Electric Distribution.
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Source of Ameren Missouri energy supply:
Methane gas and solar 0.2 0.2 0.2
Purchased power – wind 0.4 0.6 0.8
(a) Ameren Missouri fuel costs exclude $34 million, $72 million, and $(98) million in 2024, 2023, and 2022, respectively, for changes in FAC recoveries.
Natural Gas Operating Statistics – Year Ended December 31, 2024 2023 2022
Natural Gas Sales – dekatherms (in millions):
Ameren Missouri:
Residential 6 6 8
Commercial 3 3 4
Industrial 1 1 1
Ameren Illinois Natural Gas:
Industrial 3 3 6
Natural Gas Operating Revenues (in millions):
Ameren Missouri:
Industrial 4 5 7
Ameren Illinois Natural Gas:
Ameren Illinois Natural Gas total $ 938 $ 897 $ 1,180
Other and intercompany eliminations (1) (1) (1)
Rate Base (in billions):
Electric transmission and distribution $ 18.5 $ 17.5 $ 15.4
Natural gas transmission and distribution 3.3 3.2 2.9
Coal generation:
Labadie Energy Center 1.0 0.9 0.9
Sioux Energy Center 0.6 0.6 0.7
Rush Island Energy Center (retired in October 2024) — 0.4 0.4
Coal generation total 1.6 1.9 2.0
Renewable generation (hydroelectric, wind, solar, methane gas) 2.4 1.4 1.5
Natural gas generation 0.4 0.3 0.3
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AVAILABLE INFORMATION
The Ameren Companies make available free of charge through Ameren’s website (www.amereninvestors.com) their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed with or furnished to the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act as soon as reasonably possible after such reports are electronically filed with, or furnished to, the SEC. These documents are also available through the SEC’s website (www.sec.gov). Ameren’s website is a channel of distribution for material information about the Ameren Companies. Financial and other material information is routinely posted to, and accessible at, Ameren’s website.
The Ameren Companies also make available free of charge through Ameren’s website the charters of Ameren’s board of directors’ Audit and Risk Committee, Cybersecurity and Digital Technology Committee, Finance Committee, Human Resources Committee, Nominating and Corporate Governance Committee, and Nuclear, Operations and Environmental Sustainability Committee; the corporate governance guidelines; a policy regarding communications to the board of directors; a policy and procedures document with respect to related-person transactions; a code of ethics applicable to all directors, officers and employees; a supplemental code of ethics for principal executive and senior financial officers; and a director nomination policy that applies to the Ameren Companies. The information on Ameren’s website, or any other website referenced in this report, is not incorporated by reference into this report.
ITEM 1A.RISK FACTORS
Investors should review carefully the following material risk factors and the other information contained in this report. The risks that the Ameren Companies face are not limited to those in this section. There may be further risks and uncertainties that are not presently known or that are not currently believed to be material that may adversely affect the results of operations, financial position, and liquidity of the Ameren Companies.
REGULATORY AND LEGISLATIVE RISKS
We are subject to extensive regulation of our businesses.
We are subject to federal, state, and local regulation. The extensive regulatory frameworks, some of which are more specifically identified in the following risk factors, regulate, among other matters, the electric and natural gas utility industries; the rate and cost structure of utilities, including an allowed ROE; the operation of nuclear power plants; the construction and operation of generation, transmission, and distribution facilities; the acquisition, disposal, depreciation and amortization of assets and facilities; the electric transmission system reliability; and wholesale and retail competition. In the planning and management of our operations, we must address the effects of existing and proposed laws and regulations and potential changes in our regulatory frameworks, including reinterpretation of such regulations, as well initiatives by federal and state legislatures, RTOs, utility regulators, and taxing authorities, and actions by local jurisdictions that may affect the constructing or siting of facilities. Significant changes in the nature of the regulation of our businesses, including expiration or discontinuation of, or significant changes to, existing regulatory mechanisms, and the current federal administration’s approach to United States energy policy and resultant changes in regulatory enforcement priorities, and/or evolving interpretations of existing regulatory requirements, could require changes to our business planning, strategy and management of our businesses and could adversely affect our results of operations, financial position, and liquidity. Failure to obtain adequate rates or regulatory approvals in a timely manner; failure to obtain necessary licenses or permits from regulatory authorities; the impact of new or modified laws, regulations, standards, interpretations, or other legal requirements; or increased compliance costs could adversely affect our results of operations, financial position, and liquidity.
The electric and natural gas rates that we are allowed to charge are determined through regulatory proceedings, which are subject to intervention and appeal. Rates are also subject to legislative actions, which are largely outside of our control. Certain events could prevent us from recovering our costs in a timely manner or at all, or from earning adequate returns on our investments.
The rates that we are allowed to charge for our utility services significantly influence our results of operations, financial position, and liquidity. The electric and natural gas utility industry is highly regulated. The utility rates charged to customers are determined by governmental entities, including the MoPSC, the ICC, and the FERC. Decisions by these entities are influenced by many factors, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, and economic conditions, as well as social and political views. Decisions made by these governmental entities regarding customer rates are largely outside of our control. We are exposed to regulatory lag, including the impact of inflationary pressures, and cost disallowances to varying degrees by jurisdiction, which, if unmitigated, could adversely affect our results of operations, financial position, and liquidity. Rate orders are also subject to appeal, which creates additional uncertainty as to the rates that we will ultimately be allowed to charge for our services. From time to time, our regulators may approve riders or other recovery mechanisms that allow electric or natural gas rates to be adjusted without a traditional regulatory rate review. These mechanisms could be changed or terminated.
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Ameren Missouri’s electric and natural gas utility rates and Ameren Illinois’ natural gas utility rates are typically established in regulatory proceedings that take up to 11 months to complete. Ameren Missouri’s electric and natural gas utility rates established in those proceedings are based on historical costs, revenues, and sales volumes. Ameren Illinois’ natural gas rates established in those proceedings are based on estimated future costs, revenues, and sales volumes. Effective for rates in 2024 through at least 2027, Ameren Illinois’ electric distribution rates have been established through an MYRP as discussed in the following risk factor. An MYRP includes a revenue requirement reconciliation, which may not allow for full recovery of actual costs due to a reconciliation cap. Thus, the rates that we are allowed to charge for utility services may not match our actual costs at any given time.
Rates include an allowed return on investments established by the regulator, including a return at the applicable WACC on rate base, and an amount for income taxes based on the currently applicable statutory income tax rates and amortization associated with excess deferred income taxes. Although rate regulation is premised on providing an opportunity to earn a reasonable rate of return on rate base, there can be no assurance that the regulator will determine that our costs were prudently incurred or that the regulatory process will result in rates that will produce full recovery of such costs or provide for an opportunity to earn a reasonable return on those investments. Ameren Missouri and Ameren Illinois, and the utility industry generally, have an increased need for cost recovery and to earn a return on investments, primarily driven by capital investments, which is likely to continue in the future. The resulting increase to the revenue requirement needed to recover such costs and earn a return on investments could result in more frequent regulatory rate reviews and requests for cost recovery mechanisms. Additionally, increasing rates could result in regulatory or legislative actions, as well as competitive or political pressures, all of which could adversely affect our results of operations, financial position, and liquidity.
In addition, in June 2024, the MoPSC issued a financing order authorizing the issuance of securitized utility tariff bonds by a wholly owned, special purpose subsidiary of Ameren Missouri to finance approximately $476 million of costs related to the accelerated retirement of the Rush Island Energy Center, which included the remaining unrecovered net plant balance associated with the facility, among other costs. Ameren Missouri will collect the amounts necessary to repay the bonds over approximately 15 years from the date of bond issuance. The securitized tariff bonds were issued in December 2024. The financing order also included a determination that the decision to retire the Rush Island Energy Center was reasonable and prudent. The MoPSC did not make a determination regarding the prudency of Ameren Missouri's prior actions that resulted in the adverse ruling in the NSR and Clean Air Act litigation discussed in Note 14 – Commitments and Contingencies under Part II, Item 8, of this report, however, claims regarding such actions could be considered in future regulatory proceedings. 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.
In 2024 through at least 2027, electric distribution rates for Ameren Illinois are established through an MYRP, which are subject to ongoing regulatory and judicial proceedings and associated risks, and are subject to a reconciliation cap. Additionally, Ameren Illinois is subject to certain performance metrics that if not achieved would result in a reduction to the company’s allowed ROE.
The CEJA resulted in changes to the regulatory framework applicable to Ameren Illinois’ electric distribution business by giving Ameren Illinois the option to file an MYRP with the ICC or establish rates through a traditional regulatory rate review, among other things. An MYRP establishes rates for a four-year period, and Ameren Illinois has the option to file for an MYRP every four years. Ameren Illinois elected to file an MYRP for rates effective in 2024 through 2027. Under the MYRP, Ameren Illinois is allowed to reconcile its actual electric distribution revenue requirement, as adjusted for certain cost variations, to the ICC-approved revenue requirement on an annual basis, subject to a reconciliation cap. The reconciliation cap limits the annual adjustment to 105% of the annual revenue requirement approved by the ICC. Certain variations from forecasted costs are excluded from the reconciliation cap, including those associated with major storms; new business and facility relocations; changes in the timing of certain expenditures or investments into or out of the applicable calendar year; and changes in interest rates, income taxes, taxes other than income taxes, pension and other post-retirement benefits costs, and amortization of certain assets. The reconciliation cap also excludes costs recovered outside of base rates through riders. The actual revenue requirement for a particular year incorporates Ameren Illinois’ year-end rate base and actual capital structure for such year, provided that the resulting revenue requirement does not exceed the 105% reconciliation cap and the common equity ratio in such capital structure may not exceed that approved by the ICC in the MYRP. Ameren Illinois’ existing riders continue to be effective under the MYRP. In addition, the ICC determines the ROE applicable to each year of the four-year period. Economic conditions could result in the annual predetermined ROE becoming inadequate over the four-year period. Ameren Illinois has filed an appeal of the ICC-determined ROE for 2024 through 2027 to the Illinois Appellate Court for the Fifth Judicial District. For additional information on the appeal see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report. Failure to limit capital expenditures and operation and maintenance expenses to amounts that maintain revenue requirements under the reconciliation cap limit would adversely affect Ameren’s and Ameren Illinois’ results of operations, financial position, and liquidity.
Ameren Illinois’ electric distribution service business is also subject to performance metrics. Failure to achieve the metrics would result in a reduction in the company’s allowed ROE calculated under the MYRP. In 2022, the ICC issued an order approving total ROE incentives and penalties of 24 basis points under the MYRP, allocated among seven performance metrics. These performance metrics include improvements in service reliability in both the frequency and duration of outages, a reduction in peak loads, an increased percentage of
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spend with diverse suppliers, a reduction in disconnections for certain customers, and improved timeliness in response to customer requests for interconnection of distributed energy resources. These performance metrics apply annually from 2024 through 2027 under the MYRP, and the impact of any incentives and penalties will be excluded from the reconciliation cap described above. In addition, the allowed ROE on energy-efficiency investments can be increased or decreased up to 200 basis points, depending on the achievement of annual energy savings goals. Any adjustments to the allowed ROE for energy-efficiency investments will depend on annual performance for a historical period relative to energy savings goals.
As a result of the election to use the PISA, Ameren Missouri’s electric service business is subject to a limitation on increasing the annual revenue requirement due to the inclusion of incremental PISA deferrals in the revenue requirement.
Pursuant to a Missouri law, 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 is effective for revenue requirements approved by the MoPSC after January 1, 2024. Increased capital expenditures could cause incremental PISA deferrals to exceed the 2.5% limitation, and such amounts exceeding the 2.5% limitation would be excluded from recovery under future revenue requirements. Failure to limit capital investments to an amount which maintains PISA deferrals under the 2.5% limitation could adversely affect Ameren’s and Ameren Missouri’s results of operations, financial position, and liquidity.
We are subject to various environmental and permitting laws. Significant capital expenditures may be required to achieve and to maintain compliance with these environmental laws. Failure to comply with these laws could result in the closing of facilities, alterations to the manner in which these facilities operate, increased operating costs, delays and increased costs of building new facilities, and exposure to fines and liabilities.
Our electric generation, transmission, and distribution and natural gas distribution and storage operations must comply with a variety of statutes and regulations relating to the protection of the environment and human health and safety, including permitting programs implemented by federal, state, and local authorities. Such environmental laws regulate air emissions; protect water bodies; manage the handling and disposal of hazardous substances and waste materials; siting and land use requirements; and potential ecological impacts. Complex and lengthy processes are required to obtain and renew approvals, permits, and licenses for new, existing, or modified energy-related facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures. Further, we are subject to risks from changing or conflicting interpretations of existing laws, modifications to existing laws, new laws, new or modified permit terms, and enforcement of environmental laws and permits by federal, state, and local authorities.
We are also subject to liability under environmental laws that address the remediation of environmental contamination on property currently or formerly owned by us or by our predecessors, as well as property contaminated by hazardous substances that we generated. Such properties include MGP sites, substations, and third-party sites, such as landfills. Additionally, individuals and non-governmental organizations may seek to enforce environmental laws against us, allege injury from exposure to hazardous materials, allege a failure to comply with environmental laws, seek to compel remediation of environmental contamination, or seek to recover damages resulting from purported contamination.
Environmental regulations have a significant impact on the electric utility industry and compliance with these regulations could be costly for Ameren Missouri, which operates coal-fired and natural gas-fired energy centers. As of December 31, 2024, Ameren Missouri’s coal-fired energy centers represented 6% and 11% of Ameren’s and Ameren Missouri’s rate base, respectively. Compliance obligations under the Clean Air Act include the NSPS, the MATS, emission allowance programs and the CSAPR, and the National Ambient Air Quality Standards, which are subject to periodic review for certain pollutants. Collectively, these regulations cover a variety of pollutants, such as SO2, particulate matter, NOx, mercury, toxic metals and acid gases, and CO2 emissions. Regulations implementing the Clean Water Act govern potential impacts from our operations on water bodies including wetlands subject to the Act, as well as evaluation of the ecological and biological impact of those operations. Implementation of the Clean Air Act and the Clean Water Act requirements typically occurs through the issuance of permits by state regulators or resource agencies, and capital expenditures associated with compliance could be significant. Coal-fired energy centers must comply with management and disposal requirements for coal ash under the Resource Conservation and Recovery Act and federal regulations known as the CCR Rule. Surface impoundments at Ameren Missouri’s coal-fired energy centers are subject to closure and groundwater monitoring requirements and the implementations of corrective measures if necessary. The individual or combined effects of compliance with existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of operations at some of Ameren Missouri’s energy centers.
In April 2024, the EPA issued a final rule that sets CO2 emission standards for existing coal-fired and new natural gas-fired power plants based on the emissions expected from adoption of carbon capture technology and/or natural gas co-firing for coal-fired power plants and
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carbon capture technology for new natural gas-fired power plants. Affected power plants are required to comply with the rule through a phased-in approach or retire. Compliance with the new rule could be required as early as 2030 for certain existing coal-fired power plants and 2032 for certain new natural gas-fired power plants. In December 2024, the United States Court of Appeals for the District of Columbia Circuit heard arguments from various stakeholders including the EPA, environmental organizations, state attorney generals, and industry groups regarding the legal merits of the final rule. In February 2025, the EPA requested that the appellate court suspend the case for 60 days and not issue an opinion so the EPA can decide how to proceed. Ameren and Ameren Missouri estimate capital expenditures of approximately $580 million may be necessary to comply with the final rule assuming it is not revised or overturned. Ameren and Ameren Missouri are monitoring the legal challenges and assessing the impacts of the final rule and, at this time, cannot predict the final impacts on their results of operations, financial position, and liquidity.
Currently as required by the CEJA, 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 and Ameren Missouri have incurred, and expect to incur, significant costs with respect to environmental compliance and site remediation. New or revised environmental regulations, enforcement initiatives, or legislation could result in a significant increase in capital expenditures and operating costs, decreased revenues, penalties or fines, reduced operations or closure of some of Ameren Missouri’s coal-and natural gas-fired energy centers, which, in turn, could lead to increased liquidity and financing needs, and higher financing costs. Actions required to ensure that Ameren Missouri’s facilities and operations are in compliance with environmental laws could be prohibitively expensive for Ameren Missouri if the costs are not fully recovered through rates. Environmental laws could require Ameren Missouri to close or to alter significantly the operations of its energy centers. If Ameren Missouri requests recovery of capital expenditures and costs for environmental compliance through rates, the MoPSC could deny recovery of all or a portion of these costs, prevent timely recovery, or make changes to the regulatory framework in an effort to minimize rate volatility and customer rate increases. Capital expenditures and costs to comply with future legislation or regulations could result in Ameren Missouri closing coal-fired energy centers earlier than planned. If these costs are not recoverable through base rates or other regulatory mechanisms, it could lead to an impairment of assets and reduced revenues. Any of the foregoing could have an adverse effect on our results of operations, financial positions, and liquidity.
We are subject to business and financial risks related to the impact of climate change legislation, regulation, and emission reduction initiatives.
There is concern and activism among various external stakeholders, both nationally and internationally, about climate change, including public concerns about the potential environmental impacts from the combustion of fossil fuels, as well as pressure from public interest groups regarding limiting the use of natural gas. Also, state and local authorities have proposed restrictions on the use of natural gas, and the ICC is conducting a future of gas proceeding to explore issues involved with decarbonization of the natural gas distribution system in the state of Illinois. Further, federal, state, and local authorities, including the United States Congress, have considered initiatives to further restrict greenhouse gases to address global climate change, and the EPA previously announced plans to implement new climate change programs, including regulation of greenhouse gas emissions from the utility industry. Additionally, international agreements have in the past, and could again, lead to future federal or state legislation or regulations. In 2015, the United Nations Framework Convention on Climate Change reached consensus among approximately 190 nations on an agreement, known as the Paris Agreement, that establishes a framework for greenhouse gas mitigation actions by all countries, with a goal of holding the increase in global average temperature to below 2 degrees Celsius above pre-industrial levels and an aspiration to limit the increase to 1.5 degrees Celsius. In accordance with the new presidential administration’s approach to United States energy policy, in January 2025, the United States withdrew from the Paris Agreement. The current federal administration is expected to review, and has already revised, compliance requirements under a number of federal environmental regulatory programs; however, differences in energy policy priorities adopted by future federal administrations could result in additional greenhouse gas reduction requirements in the United States.
As a result of our diverse fuel portfolio, our emissions of greenhouse gases vary among our energy centers, but coal-fired power plants are significant sources of CO2 emissions. Future federal and state legislation or regulations that mandate limits on the emission of, or impose taxation on, greenhouse gases could result in a significant increase in capital expenditures and operating costs, decreased revenues, penalties or fines, or reduced operations of some of Ameren Missouri’s coal- and natural gas-fired energy centers, which, in turn, could lead to increased liquidity and financing needs, and higher financing costs. Moreover, to the extent Ameren Missouri requests recovery of these costs through rates, its regulators might deny some or all of, or defer timely recovery of, these costs. Excessive costs to comply with future legislation or regulations related to climate change might force Ameren Missouri to close its remaining coal-fired energy centers earlier than planned, which could lead to possible loss on abandonment and reduced revenues. As a result, mandatory limits could have a material adverse impact on Ameren’s and Ameren Missouri’s results of operations, financial position, and liquidity.
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Ameren is targeting net-zero carbon emissions by 2045, as well as a 60% reduction by 2030 and an 85% reduction by 2040 based on 2005 levels in a safe, reliable, and affordable manner. 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. Achievement of these targets is dependent on many factors, including the pace and extent of development and deployment of low- to zero-carbon energy technologies and carbon capture technologies, the cost of those technologies, and support of such technologies by regulators; natural gas prices; new transmission infrastructure; the ability to maintain system reliability during and after the transition to clean energy generation; and constructive energy and economic policies, including those that address investment in energy infrastructure, global climate change, incentives for clean energy technologies, and environmental regulations. Additional factors associated with operational risks for the construction and acquisition of electric and natural gas infrastructure may also affect the achievement of these goals, as further discussed below. The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio, including low-carbon and carbon-free resources and energy-efficiency resources; continuing to participate in efforts to help advance the development of technologies such as carbon capture and sequestration; the use of hydrogen fuel for electric production and energy storage, next generation nuclear, and large-scale long-cycle battery energy storage; and constructively engaging with legislators, regulators, investors, customers, and other stakeholders to support outcomes leading to a net-zero future.
We are subject to regulatory compliance and proceedings, which could result in increasing costs, regulatory penalties, and/or other sanctions.
We are subject to FERC regulations, rules, and orders, including standards required by the NERC. As owners and operators of bulk power transmission systems and electric energy centers, we are subject to mandatory NERC reliability standards, including cybersecurity standards. In addition, our natural gas transmission, distribution, and storage facilities systems are subject to PHMSA rules and regulations. Compliance with these reliability standards, rules, and regulations may subject us to higher operating costs and may result in increased capital expenditures. We may also incur higher operating costs to comply with potential new executive orders, regulations, or reinterpretations of existing regulations issued by these regulatory bodies. If we were found not to be in compliance with these mandatory NERC reliability standards, PHMSA rules and regulations, or FERC regulations, rules, and orders, we could incur substantial monetary penalties and other sanctions, which could adversely affect our results of operations, financial position, and liquidity. The FERC can impose civil penalties of approximately $1.6 million per violation per day for violation of its regulations, rules, and orders, including mandatory NERC reliability standards. The FERC also conducts audits and reviews of Ameren Missouri’s, Ameren Illinois’, and ATXI’s accounting records to assess the accuracy of their respective formula ratemaking process, and it can require refunds to be issued to customers for previously billed amounts, with interest.
Additionally, pursuant to the CEJA, Illinois utilities are subject to requirements and provisions related to ethical conduct, including submitting an annual ethics and compliance report to the ICC. The law authorizes the ICC to initiate an investigation into how customer funds were used if a violation of the law is determined to have occurred at an Illinois utility, potentially requiring the utility to issue refunds and imposing a penalty of up to $0.5 million per violation.
OPERATIONAL RISKS
The construction and acquisition of, and capital improvements to, electric and natural gas utility infrastructure, along with Ameren Missouri’s ability to implement its Smart Energy Plan and its 2025 Change to the 2023 PRP, involve substantial risks.
We expect to make significant capital expenditures to maintain and improve our electric and natural gas utility infrastructure and to comply with existing environmental regulations. We estimate that we will invest up to $27.4 billion (Ameren Missouri – up to $17.5 billion; Ameren Illinois – up to $7.0 billion; ATXI – up to $2.9 billion) of capital expenditures from 2025 through 2029. For additional information on these estimates, see Liquidity and Capital Resources – Capital Expenditures in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report. Investments in Ameren’s rate-regulated operations are expected to be recoverable from customers, but they are subject to prudence reviews and are exposed to regulatory lag of varying degrees by jurisdiction.
Our ability to complete construction projects successfully within projected estimates, including schedule, performance, and/or cost, and to implement Ameren Missouri’s Smart Energy Plan, which may include acquisition of generation facilities after they are constructed, is contingent upon many factors and subject to substantial risks. These factors include, but are not limited to, the following: project management expertise; 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; escalating costs, including but not limited to changes to tariffs on materials or government actions; changes in the scope and timing of projects; the ability to obtain required regulatory, project, and permit approvals; the ability to obtain necessary rights-of-way, easements, and transmission connection agreements at an acceptable cost in a timely fashion; unsatisfactory performance by the projects when completed; the inability to earn an adequate return on invested capital; the ability to raise capital on reasonable terms; geopolitical conflict and other events beyond our control, including delays arising from government shutdowns or construction delays due to weather.
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With respect to the transition of Ameren Missouri’s generation fleet that will be included in its 2025 Change to the 2023 PRP and carbon emission reduction targets, factors also include Ameren Missouri’s ability to obtain CCNs from the MoPSC, and any other required approvals for the addition of renewable resources, battery storage, or nuclear 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, natural gas-fired, or nuclear generation and acquire or construct that generation at a reasonable cost; the ability to obtain NRC approval for an extension of the operating license for the Callaway Energy Center beyond its current 2044 expiration date; the continued existence and 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 cost of nuclear generation; 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.
Any of these risks could result in higher costs, the inability to complete anticipated projects, or facility closures, and could adversely affect our results of operations, financial position, and liquidity.
Our electric generation and electric and natural gas transmission and distribution facilities, including natural gas storage facilities, are subject to operational risks.
Our financial performance depends on the successful operation of electric generation and electric and natural gas transmission and distribution facilities, including natural gas storage facilities. Operation of these facilities involves many risks, including:
•facility shutdowns due to operator error, or a failure of equipment or processes;
•longer-than-anticipated maintenance outages;
•failures of equipment that can result in unanticipated liabilities or unplanned outages;
•aging infrastructure that may require significant expenditures to operate and maintain;
•natural gas leaks or explosions near populated areas, including residential areas, business centers, industrial sites, and other public gathering places;
•lack of adequate water required for cooling plant operations and to operate hydroelectric energy centers;
•labor disputes;
•disruptions in the delivery of electricity and natural gas to our customers;
•inability to maintain reliability of our electric utility services as coal-fired energy centers are retired and renewable energy generation is placed in service, as well as our ability to meet generation capacity obligations;
•disruptions to the global supply chain as a result of shortages for labor, materials, or equipment, tariffs and international trade relations, geopolitical conflict, delivery delays, and economic pressures, including elevated interest rates and inflation, among other things;