Union Electric (UEPCP)

Risks

• We are subject to extensive regulation of our businesses.
• 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 from earning adequate returns on our investments.
• Ameren Illinois expects to use the IEIMA performance-based formula ratemaking framework to establish annual customer rates effective through 2023. Effective for rates beginning in 2024, Ameren Illinois will establish electric distribution rates through either a traditional regulatory rate review or an MYRP. As a result of its participation in the IEIMA performance-based formula ratemaking, Ameren Illinois’ ROE for its electric distribution service through 2023 and its electric energy-efficiency investments is directly correlated to yields on United States Treasury bonds. Additionally, Ameren Illinois is subject to certain performance standards. With respect to its natural gas delivery service business, unless extended, Ameren Illinois’ QIP will expire after December 2023.
• As a result of the election to use the PISA, Ameren Missouri’s electric rates are subject to a rate cap. Additionally, Ameren Missouri’s investment plan assumes use of PISA through December 2028, which is subject to MoPSC approval that has not yet been requested.
• We are subject to various environmental 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, or exposure to fines and liabilities.
• We are subject to business and financial risks related to the impact of climate change legislation, regulation, and emission reduction goals.
• We are subject to federal regulatory compliance and proceedings, which could result in increasing costs and the potential for regulatory penalties and other sanctions.
• 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, which is aligned with its 2020 IRP, involve substantial risks.
• Our electric generation, transmission, and distribution facilities are subject to operational risks.
• Ameren Missouri’s ability to obtain an adequate supply of coal could limit operation of its coal-fired energy centers.
• Ameren Missouri’s ownership and operation of a nuclear energy center creates business, financial, and waste disposal risks.
• Our natural gas distribution and storage activities involve numerous risks that may result in accidents and increased operating costs.
• Significant portions of our electric generation, transmission, and distribution facilities and natural gas transmission and distribution facilities are aging. This aging infrastructure may require significant additional maintenance or replacement. Ameren Missouri could be adversely affected if it is unable to recover the remaining investment, if any, 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.
• Energy conservation, energy efficiency, distributed generation, energy storage, technological advances, and other factors could reduce energy demand from our customers.
• Ameren’s holding company structure could limit its ability to pay common stock dividends and to service its debt obligations.
• Significant increases in prices of commodities, labor, services, materials, and supplies and other costs, including costs associated with our defined benefit retirement and postretirement plans, health care plans, and other employee benefits, could adversely affect our results of operations, financial position, or liquidity.
• Our results of operations, financial position, and liquidity have been and are expected to continue to be adversely affected by the international public health emergency associated with the COVID-19 pandemic.
• Customers’, investors’, legislators’, and regulators’ opinions of us are affected by many factors, including system reliability, implementation of our strategic plan, protection of customer information, rates, media coverage, and ESG practices, as well as actions by other utility companies. Negative opinions developed by customers, investors, legislators, or regulators could harm our reputation.
• We are subject to employee work force factors that could adversely affect our operations.
• Our operations are subject to acts of terrorism, cyber attacks, and other intentionally disruptive acts.
• Our businesses are dependent on our ability to access the capital markets successfully. We might not have access to sufficient capital in the amounts and at the times needed, as well as on reasonable terms.