0001002910us-gaap:ElectricityMemberus-gaap:OperatingSegmentsMemberaee:AmerenIllinoisGasMemberaee:OtherMember2020-07-012020-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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| ☒ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
for the Quarterly Period Ended September 30, 2020March 31, 2021
OR
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| ☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from to |
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Commission
File Number | Exact name of registrant as specified in its charter;
State of Incorporation;
Address and Telephone Number | IRS Employer
Identification No. |
| 1-14756 | Ameren Corporation | 43-1723446 |
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri 63103
(314) 621-3222
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| 1-2967 | Union Electric Company | 43-0559760 |
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri 63103
(314) 621-3222
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| 1-3672 | Ameren Illinois Company | 37-0211380 |
(Illinois Corporation)
10 Executive Drive
Collinsville, Illinois 62234
(618) 343-8150
Securities Registered Pursuant to Section 12(b) of the Act:
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| 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 |
Indicate by check mark whether the registrants: (1) have 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) have been subject to such filing requirements for the past 90 days.
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| 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).
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| 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 definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Ameren Corporation | Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ |
| | | Smaller reporting company | ☐ | Emerging growth company | ☐ |
| Union Electric Company | Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☒ |
| | | Smaller reporting company | ☐ | Emerging growth company | ☐ |
| Ameren Illinois Company | Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☒ |
| | | 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.
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| 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 Exchange Act).
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Corporation | | Yes | | ☐ | | No | | ☒ |
| Union Electric Company | | Yes | | ☐ | | No | | ☒ |
| Ameren Illinois Company | | Yes | | ☐ | | No | | ☒ |
The number of shares outstanding of each registrant’s classes of common stock as of OctoberApril 30, 2020,2021, was as follows:
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| Registrant | | Title of each class of common stock | Shares outstanding |
| Ameren Corporation | | Common stock, $0.01 par value per share | 247,206,978255,552,619 | |
| Union Electric Company | | Common stock, $5 par value per share, held by Ameren Corporation | 102,123,834 | |
| Ameren Illinois Company | | Common stock, no par value, held by Ameren Corporation | 25,452,373 | |
This combined Form 10-Q 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 quarterly 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.
TABLE OF CONTENTS
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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. Refer to the Form 10-K for a complete listing of glossary terms and abbreviations. Only new or significantly changed terms and abbreviations are included below.
2020 IRP – Integrated Resource Plan, a long-term nonbinding plan that Ameren Missouri filed with the MoPSC in September 2020, which includes Ameren Missouri’s preferred approach for meeting customers’ projected long-term energy needs in a cost-effective manner while maintaining system reliability and achieving a goal of net-zero CO2 emissions by 2050.
COVID-19 pandemic – The global pandemic resulting from the outbreak of the 2019 novel coronavirus, which causes coronavirus disease 2019 (COVID-19).
Customer demand charges – Revenues from nonresidential customers based on their peak demand during a specified time interval.
Deferred payment arrangement –A payment option that allows certain Ameren Missouri and Ameren Illinois retail customers to pay a utility bill balance over a period of time, generally over a period of up to 12 months. On a temporary basis through January 31, 2021, Ameren Illinois' residential retail customers may elect to pay a utility bill balance over a period of up to 24 months.
Form 10-K – The combined Annual Report on Form 10-K for the year ended December 31, 2019,2020, filed by the Ameren Companies with the SEC.
Net energy costs – Net energy costs, as defined in the FAC, which include fuel, certain fuel additives, ash disposal costs and revenues, emission allowances, and purchased power costs, including transportation, net of off-system sales and capacity revenues. Substantially all transmission revenues and charges are excluded from net energy costs. The MoPSC's March 2020 electric rate order changed the FAC to include certain fuel additives and ash disposal costs and revenues, as of April 1, 2020.
QTD – Three months ended September 30.
YTD – Nine months ended September 30.
YoY – Compared with the year-ago period.
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 in the Form 10-K and in 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 potential future orders and Ameren Missouri’s electric service and natural gas delivery service regulatory rate reviews filed with the MoPSC in March 2021, the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the refund period related to the May 2020 FERC order determining the allowed base ROE under the MISO tariff, the Notice of Inquiry issued by the FERC in March 2019 regarding its allowed base ROE policy, the Notice of Proposed Rulemaking issued by the FERC in March 2020 regarding its transmission incentives policy, the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the FERC’s rehearing denials in the transmission formula rate revision cases, requests filed withAmeren Illinois’ request for rehearing of the MoPSC in October 2020 for accounting authority ordersMarch 2021 FERC order related to Ameren Missouri's electric and natural gas services to allow Ameren Missouri to accumulate certain costs incurred related to the COVID-19 pandemic, Ameren Illinois’ May 2020 annual electric energy-efficiencytransmission formula rate update, Ameren Illinois’ April 2020 annual electric distribution formula rate update filing, and Ameren Illinois’ natural gas deliveryelectric distribution service regulatory rate reviewreconciliation request filed with the ICC in February 2020;April 2021;
•the length and severity of the COVID-19 pandemic, and its impacts on our business continuity plans and our results of operations, financial position, and liquidity, including but not limited to changes in customer demand resulting in changes to sales volumes, customers’ payment for our services and their use of deferred payment arrangements, future regulatory or legislative actions that could require suspension of customer disconnections and/or late fees, among other things, for an extended period of time, the health and welfare of our workforce and contractors, supplier disruptions, delays in the completion of construction projects, which could impact our plannedexpected capital expenditures and expected planned rate base growth, Ameren Missouri’s ability to recover any forgone customer late fee revenues or incremental costs, our ability to meet customer energy-efficiency program goals and earn performance incentives related to those programs, changes in how we operate our business and increased data security risks as a result of the transition to remote working arrangements for a significant portion of our workforce, and our ability to access the capital markets on reasonable terms and when needed;
•the effect and duration of Ameren Illinois’ election to participate in performance-based formula ratemaking frameworks,framework for its electric distribution service, which, unless extended, expires at the end of 2022, for its electric distribution service and its participation in electric energy-efficiency programs, including 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 pursuant to Ameren Missouri’s election to use the PISA, including an extension of use beyond 2023, if requested by Ameren Missouri and approved by the MoPSC;
•the effects of changes in federal, state, or local laws and other governmental actions, including monetary, fiscal, and energy policies;
•the effects of changes in federal, state, or local tax laws, regulations, interpretations, or rates, including as a result of amendments or technical corrections to the TCJA, and challenges to the tax positions taken by the Ameren Companies, if any;any, as well as resulting effects on customer rates;
•the effects on energy prices and demand for our services resulting from technological advances, including advances in customer energy efficiency, electric vehicles, electrification of various industries, energy storage, and private generation sources, which generate electricity at the site of consumption and are becoming more cost-competitive;
•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 the FEJA electric customer energy-efficiency goals and the resulting impact on its allowed ROE;
•our ability to align overall spending, both operatingcontrol costs and capital, withmake substantial investments in our businesses, including our ability to recover costs, investments, and our allowed ROEs within frameworks established by our regulators, and to recover these costs in a timely manner inwhile maintaining affordability of our attempt to earnservices for our allowed ROEs;customers;
•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 purchased power, zero emission credits, renewable energy credits, and natural gas for distribution; and the level and volatility of future market prices for such commodities and credits, including our ability to recover the costs for such commodities and credits and our customers’ tolerance for any related price increases;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 from the one NRC-licensed supplier of Ameren Missouri’s Callaway Energy Center assemblies;
•the cost and availability of transmission capacity for the energy generated by Ameren Missouri'sMissouri’s energy centers or required to satisfy Ameren Missouri’s energy sales;
•the effectiveness of our risk management strategies and our use of financial and derivative instruments;
•the ability to obtain sufficient insurance, including insurance for Ameren Missouri’s nuclear and coal-fired energy centers, or, in the absence of insurance, the ability to timely recover uninsured losses from our customers;
•the impact of cyberattacks on us or our suppliers, 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;
•business and economic conditions, which have been affected by, and will be affected by the length and severity of, the COVID-19 pandemic, including the impact of such conditions on interest rates;
•disruptions of the capital 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;
•the actions of credit rating agencies and the effects of such actions, including any impacts on our credit ratings that may result from the economic conditions of the COVID-19 pandemic;
•the inability of our counterparties to meet their obligations with respect to contracts, credit agreements, and financial instruments;instruments, including as it relates 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 that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic;
•the impact of weather conditions and other natural phenomena on us and our customers, including the impact of system outages;outages and the level of wind and solar resources;
•the construction, installation, performance, and cost recovery of generation, transmission, and distribution assets;
•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, such as the current outage that began in December 2020 related to its generator, and decommissioning costs;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 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;
•the impact of current environmental laws and new, more stringent, or changing requirements, including those related to NSR and CO2 and the implementation of the Affordable Clean Energy Rule,, other emissions and discharges, cooling water intake structures, CCR, and energy efficiency, 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;
•Ameren Missouri’s ability to construct and/or acquire wind, solar, and other renewable energy generation facilities, retire 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, the 2020 IRP, or our emissions reduction goals, and to recover its cost of investment, and related return, and, in the case of customer energy-efficiency programs, any lost margins in a timely manner, which is affected by the ability to obtain all necessary regulatory and project approvals; the ability of developers to meet contractual commitments and complete projects timely, which is dependent upon the availability of necessary materials and equipment,approvals, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic; and Ameren Missouri’s ability to obtain a certificatecertificates of convenience and necessity from the MoPSC or any other required approvals for the addition of renewable resources, retirement of energy centers, and new or continued customer energy-efficiency programs;resources;
•the availability of federal production and investment tax credits related to renewable energy and Ameren Missouri'sMissouri’s ability to use such credits; the cost of wind, solar, and other renewable generation and storage technologies; and our ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost for each facility;
•advancements in carbon-free generation and storage technologies, and constructive federal and state energy and economic policies with respect to those technologies;
•labor disputes, work force reductions, 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, or regulators 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 environmental, social, and/or governance practices;
•the impact of adopting new accounting guidance;
•the effects of strategic initiatives, including mergers, acquisitions, and divestitures;
•legal and administrative proceedings; and
•acts of sabotage, war, terrorism, or other intentionally disruptive acts.
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. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(Unaudited) (In millions, except per share amounts)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| Operating Revenues: | Operating Revenues: | | | | | | | | Operating Revenues: | | | | |
| Electric | Electric | $ | 1,489 | | | $ | 1,528 | | | $ | 3,846 | | | $ | 3,928 | | Electric | | $ | 1,156 | | | $ | 1,120 | |
| Natural gas | Natural gas | 139 | | | 131 | | | 620 | | | 666 | | Natural gas | | 410 | | | 320 | |
| Total operating revenues | Total operating revenues | 1,628 | | | 1,659 | | | 4,466 | | | 4,594 | | Total operating revenues | | 1,566 | | | 1,440 | |
| Operating Expenses: | Operating Expenses: | | | | | | | | Operating Expenses: | | | | |
| Fuel | Fuel | 141 | | | 147 | | | 400 | | | 409 | | Fuel | | 65 | | | 140 | |
| Purchased power | Purchased power | 140 | | | 148 | | | 383 | | | 440 | | Purchased power | | 191 | | | 134 | |
| Natural gas purchased for resale | Natural gas purchased for resale | 34 | | | 31 | | | 183 | | | 236 | | Natural gas purchased for resale | | 165 | | | 107 | |
| Other operations and maintenance | Other operations and maintenance | 418 | | | 434 | | | 1,240 | | | 1,301 | | Other operations and maintenance | | 420 | | | 438 | |
| | Depreciation and amortization | Depreciation and amortization | 273 | | | 248 | | | 799 | | | 745 | | Depreciation and amortization | | 281 | | | 255 | |
| Taxes other than income taxes | Taxes other than income taxes | 128 | | | 131 | | | 372 | | | 375 | | Taxes other than income taxes | | 128 | | | 125 | |
| Total operating expenses | Total operating expenses | 1,134 | | | 1,139 | | | 3,377 | | | 3,506 | | Total operating expenses | | 1,250 | | | 1,199 | |
| Operating Income | Operating Income | 494 | | | 520 | | | 1,089 | | | 1,088 | | Operating Income | | 316 | | | 241 | |
| | Other Income, Net | Other Income, Net | 48 | | | 34 | | | 117 | | | 99 | | Other Income, Net | | 46 | | | 21 | |
| Interest Charges | Interest Charges | 110 | | | 96 | | | 311 | | | 290 | | Interest Charges | | 100 | | | 93 | |
| Income Before Income Taxes | Income Before Income Taxes | 432 | | | 458 | | | 895 | | | 897 | | Income Before Income Taxes | | 262 | | | 169 | |
| Income Taxes | Income Taxes | 63 | | | 92 | | | 134 | | | 158 | | Income Taxes | | 27 | | | 21 | |
| | Net Income | Net Income | 369 | | | 366 | | | 761 | | | 739 | | Net Income | | 235 | | | 148 | |
| Less: Net Income Attributable to Noncontrolling Interests | Less: Net Income Attributable to Noncontrolling Interests | 2 | | | 2 | | | 5 | | | 5 | | Less: Net Income Attributable to Noncontrolling Interests | | 2 | | | 2 | |
| | Net Income Attributable to Ameren Common Shareholders | Net Income Attributable to Ameren Common Shareholders | $ | 367 | | | $ | 364 | | | $ | 756 | | | $ | 734 | | Net Income Attributable to Ameren Common Shareholders | | $ | 233 | | | $ | 146 | |
| | | Net Income | Net Income | $ | 369 | | | $ | 366 | | | $ | 761 | | | $ | 739 | | Net Income | | $ | 235 | | | $ | 148 | |
| Other Comprehensive Income, Net of Taxes | Other Comprehensive Income, Net of Taxes | | Other Comprehensive Income, Net of Taxes | | |
Pension and other postretirement benefit plan activity, net of income taxes of $0, $0, $0, and $0, respectively | 1 | | | 0 | | | 2 | | | 1 | | |
| Pension and other postretirement benefit plan activity, net of income taxes of $0 and $0, respectively | | Pension and other postretirement benefit plan activity, net of income taxes of $0 and $0, respectively | | 1 | | | 1 | |
| Comprehensive Income | Comprehensive Income | 370 | | | 366 | | | 763 | | | 740 | | Comprehensive Income | | 236 | | | 149 | |
| Less: Comprehensive Income Attributable to Noncontrolling Interests | Less: Comprehensive Income Attributable to Noncontrolling Interests | 2 | | | 2 | | | 5 | | | 5 | | Less: Comprehensive Income Attributable to Noncontrolling Interests | | 2 | | | 2 | |
| Comprehensive Income Attributable to Ameren Common Shareholders | Comprehensive Income Attributable to Ameren Common Shareholders | $ | 368 | | | $ | 364 | | | $ | 758 | | | $ | 735 | | Comprehensive Income Attributable to Ameren Common Shareholders | | $ | 234 | | | $ | 147 | |
| | | | Earnings per Common Share – Basic | Earnings per Common Share – Basic | $ | 1.48 | | | $ | 1.48 | | | $ | 3.06 | | | $ | 2.99 | | Earnings per Common Share – Basic | | $ | 0.92 | | | $ | 0.59 | |
| | | Earnings per Common Share – Diluted | Earnings per Common Share – Diluted | $ | 1.47 | | | $ | 1.47 | | | $ | 3.04 | | | $ | 2.97 | | Earnings per Common Share – Diluted | | $ | 0.91 | | | $ | 0.59 | |
| | Weighted-average Common Shares Outstanding – Basic | Weighted-average Common Shares Outstanding – Basic | 247.1 | | | 245.9 | | | 246.8 | | | 245.5 | | Weighted-average Common Shares Outstanding – Basic | | 254.4 | | | 246.4 | |
| Weighted-average Common Shares Outstanding – Diluted | Weighted-average Common Shares Outstanding – Diluted | 249.2 | | | 247.5 | | | 248.4 | | | 247.0 | | Weighted-average Common Shares Outstanding – Diluted | | 255.9 | | | 248.1 | |
The accompanying notes are an integral part of these consolidated financial statements.
AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
| | | September 30,
2020 | | December 31, 2019 | | March 31, 2021 | | December 31, 2020 |
| ASSETS | ASSETS | | | | ASSETS | | | |
| Current Assets: | Current Assets: | | Current Assets: | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 6 | | | $ | 16 | | Cash and cash equivalents | $ | 6 | | | $ | 139 | |
| Accounts receivable – trade (less allowance for doubtful accounts of $44 and $17, respectively) | 525 | | | 393 | | |
| Accounts receivable – trade (less allowance for doubtful accounts of $47 and $50, respectively) | | Accounts receivable – trade (less allowance for doubtful accounts of $47 and $50, respectively) | 464 | | | 415 | |
| Unbilled revenue | Unbilled revenue | 221 | | | 278 | | Unbilled revenue | 210 | | | 269 | |
| Miscellaneous accounts receivable | Miscellaneous accounts receivable | 71 | | | 63 | | Miscellaneous accounts receivable | 61 | | | 65 | |
| Inventories | Inventories | 557 | | | 494 | | Inventories | 467 | | | 521 | |
| | Restricted cash | | Restricted cash | 134 | | | 17 | |
| Current regulatory assets | | Current regulatory assets | 367 | | | 109 | |
| | Other current assets | Other current assets | 210 | | | 187 | | Other current assets | 114 | | | 118 | |
| | Total current assets | Total current assets | 1,590 | | | 1,431 | | Total current assets | 1,823 | | | 1,653 | |
| Property, Plant, and Equipment, Net | Property, Plant, and Equipment, Net | 25,541 | | | 24,376 | | Property, Plant, and Equipment, Net | 27,307 | | | 26,807 | |
| Investments and Other Assets: | Investments and Other Assets: | | Investments and Other Assets: | |
| Nuclear decommissioning trust fund | Nuclear decommissioning trust fund | 904 | | | 847 | | Nuclear decommissioning trust fund | 1,010 | | | 982 | |
| Goodwill | Goodwill | 411 | | | 411 | | Goodwill | 411 | | | 411 | |
| | Regulatory assets | Regulatory assets | 1,078 | | | 992 | | Regulatory assets | 1,249 | | | 1,100 | |
| Other assets | Other assets | 993 | | | 876 | | Other assets | 989 | | | 1,077 | |
| | Total investments and other assets | Total investments and other assets | 3,386 | | | 3,126 | | Total investments and other assets | 3,659 | | | 3,570 | |
| TOTAL ASSETS | TOTAL ASSETS | $ | 30,517 | | | $ | 28,933 | | TOTAL ASSETS | $ | 32,789 | | | $ | 32,030 | |
| LIABILITIES AND EQUITY | LIABILITIES AND EQUITY | | | | LIABILITIES AND EQUITY | | | |
| Current Liabilities: | Current Liabilities: | | Current Liabilities: | |
| Current maturities of long-term debt | Current maturities of long-term debt | $ | 357 | | | $ | 442 | | Current maturities of long-term debt | $ | 8 | | | $ | 8 | |
| Short-term debt | Short-term debt | 272 | | | 440 | | Short-term debt | 889 | | | 490 | |
| Accounts and wages payable | Accounts and wages payable | 640 | | | 874 | | Accounts and wages payable | 581 | | | 958 | |
| Taxes accrued | Taxes accrued | 199 | | | 37 | | Taxes accrued | 128 | | | 82 | |
| Interest accrued | | Interest accrued | 84 | | | 114 | |
| | Customer deposits | 109 | | | 111 | | |
| | Current regulatory liabilities | Current regulatory liabilities | 96 | | | 164 | | Current regulatory liabilities | 225 | | | 121 | |
| | Other current liabilities | Other current liabilities | 432 | | | 437 | | Other current liabilities | 392 | | | 407 | |
| | Total current liabilities | Total current liabilities | 2,105 | | | 2,505 | | Total current liabilities | 2,307 | | | 2,180 | |
| Long-term Debt, Net | Long-term Debt, Net | 10,172 | | | 8,915 | | Long-term Debt, Net | 11,527 | | | 11,078 | |
| Deferred Credits and Other Liabilities: | Deferred Credits and Other Liabilities: | | Deferred Credits and Other Liabilities: | |
| Accumulated deferred income taxes and investment tax credits, net | 3,151 | | | 2,919 | | |
| Accumulated deferred income taxes and tax credits, net | | Accumulated deferred income taxes and tax credits, net | 3,253 | | | 3,211 | |
| | Regulatory liabilities | Regulatory liabilities | 4,972 | | | 4,887 | | Regulatory liabilities | 5,230 | | | 5,282 | |
| Asset retirement obligations | Asset retirement obligations | 675 | | | 638 | | Asset retirement obligations | 705 | | | 696 | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | 373 | | | 401 | | Pension and other postretirement benefits | 38 | | | 37 | |
| Other deferred credits and liabilities | Other deferred credits and liabilities | 438 | | | 467 | | Other deferred credits and liabilities | 452 | | | 466 | |
| | Total deferred credits and other liabilities | Total deferred credits and other liabilities | 9,609 | | | 9,312 | | Total deferred credits and other liabilities | 9,678 | | | 9,692 | |
| Commitments and Contingencies (Notes 2, 9, and 10) | Commitments and Contingencies (Notes 2, 9, and 10) | | | | Commitments and Contingencies (Notes 2, 9, and 10) | 0 | | 0 |
| Ameren Corporation Shareholders’ Equity: | Ameren Corporation Shareholders’ Equity: | | Ameren Corporation Shareholders’ Equity: | |
| Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 247.2 and 246.2, respectively | 2 | | | 2 | | |
| Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 255.5 and 253.3, respectively | | Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 255.5 and 253.3, respectively | 3 | | | 3 | |
| Other paid-in capital, principally premium on common stock | Other paid-in capital, principally premium on common stock | 5,733 | | | 5,694 | | Other paid-in capital, principally premium on common stock | 6,295 | | | 6,179 | |
| Retained earnings | Retained earnings | 2,769 | | | 2,380 | | Retained earnings | 2,850 | | | 2,757 | |
| Accumulated other comprehensive loss | Accumulated other comprehensive loss | (15) | | | (17) | | Accumulated other comprehensive loss | 0 | | | (1) | |
| | Total Ameren Corporation shareholders’ equity | Total Ameren Corporation shareholders’ equity | 8,489 | | | 8,059 | | Total Ameren Corporation shareholders’ equity | 9,148 | | | 8,938 | |
| Noncontrolling Interests | Noncontrolling Interests | 142 | | | 142 | | Noncontrolling Interests | 129 | | | 142 | |
| Total equity | Total equity | 8,631 | | | 8,201 | | Total equity | 9,277 | | | 9,080 | |
| TOTAL LIABILITIES AND EQUITY | TOTAL LIABILITIES AND EQUITY | $ | 30,517 | | | $ | 28,933 | | TOTAL LIABILITIES AND EQUITY | $ | 32,789 | | | $ | 32,030 | |
The accompanying notes are an integral part of these consolidated financial statements.
| | AMEREN CORPORATION | AMEREN CORPORATION | AMEREN CORPORATION |
| CONSOLIDATED STATEMENT OF CASH FLOWS | CONSOLIDATED STATEMENT OF CASH FLOWS | CONSOLIDATED STATEMENT OF CASH FLOWS |
| (Unaudited) (In millions) | (Unaudited) (In millions) | (Unaudited) (In millions) |
| | | Nine Months Ended September 30, | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2021 | | 2020 |
| Cash Flows From Operating Activities: | Cash Flows From Operating Activities: | | | | Cash Flows From Operating Activities: | | | |
| Net income | Net income | $ | 761 | | | $ | 739 | | Net income | $ | 235 | | | $ | 148 | |
| | Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | | Adjustments to reconcile net income to net cash provided by operating activities: | |
| | Depreciation and amortization | Depreciation and amortization | 802 | | | 745 | | Depreciation and amortization | 295 | | | 263 | |
| Amortization of nuclear fuel | Amortization of nuclear fuel | 68 | | | 56 | | Amortization of nuclear fuel | 0 | | | 23 | |
| Amortization of debt issuance costs and premium/discounts | Amortization of debt issuance costs and premium/discounts | 16 | | | 14 | | Amortization of debt issuance costs and premium/discounts | 5 | | | 5 | |
| Deferred income taxes and investment tax credits, net | Deferred income taxes and investment tax credits, net | 125 | | | 144 | | Deferred income taxes and investment tax credits, net | 26 | | | 23 | |
| Allowance for equity funds used during construction | Allowance for equity funds used during construction | (25) | | | (20) | | Allowance for equity funds used during construction | (7) | | | (4) | |
| Stock-based compensation costs | Stock-based compensation costs | 16 | | | 15 | | Stock-based compensation costs | 6 | | | 6 | |
| Other | Other | 14 | | | (11) | | Other | 8 | | | 17 | |
| Changes in assets and liabilities: | Changes in assets and liabilities: | | Changes in assets and liabilities: | |
| Receivables | Receivables | (113) | | | 10 | | Receivables | (5) | | | (5) | |
| Inventories | Inventories | (61) | | | (4) | | Inventories | 54 | | | 23 | |
| Accounts and wages payable | Accounts and wages payable | (190) | | | (205) | | Accounts and wages payable | (252) | | | (221) | |
| Taxes accrued | Taxes accrued | 154 | | | 118 | | Taxes accrued | 60 | | | 47 | |
| Regulatory assets and liabilities | Regulatory assets and liabilities | (55) | | | 147 | | Regulatory assets and liabilities | (421) | | | (14) | |
| Assets, other | Assets, other | (66) | | | (56) | | Assets, other | (9) | | | (3) | |
| Liabilities, other | Liabilities, other | (76) | | | 11 | | Liabilities, other | (34) | | | (18) | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | (41) | | | (35) | | Pension and other postretirement benefits | 4 | | | 0 | |
| | Net cash provided by operating activities | 1,329 | | | 1,668 | | |
| Net cash provided by (used in) operating activities | | Net cash provided by (used in) operating activities | (35) | | | 290 | |
| Cash Flows From Investing Activities: | Cash Flows From Investing Activities: | | | | Cash Flows From Investing Activities: | | | |
| Capital expenditures | Capital expenditures | (1,884) | | | (1,761) | | Capital expenditures | (694) | | | (636) | |
| Wind generation expenditures | | Wind generation expenditures | (193) | | | 0 | |
| Nuclear fuel expenditures | Nuclear fuel expenditures | (61) | | | (26) | | Nuclear fuel expenditures | (1) | | | (35) | |
| Purchases of securities – nuclear decommissioning trust fund | Purchases of securities – nuclear decommissioning trust fund | (169) | | | (192) | | Purchases of securities – nuclear decommissioning trust fund | (152) | | | (96) | |
| Sales and maturities of securities – nuclear decommissioning trust fund | Sales and maturities of securities – nuclear decommissioning trust fund | 135 | | | 184 | | Sales and maturities of securities – nuclear decommissioning trust fund | 150 | | | 81 | |
| Purchase of bonds | 0 | | | (207) | | |
| Proceeds from sale of remarketed bonds | 0 | | | 207 | | |
| | | Other | Other | (2) | | | (3) | | Other | 1 | | | 2 | |
| | Net cash used in investing activities | Net cash used in investing activities | (1,981) | | | (1,798) | | Net cash used in investing activities | (889) | | | (684) | |
| Cash Flows From Financing Activities: | Cash Flows From Financing Activities: | | | | Cash Flows From Financing Activities: | | | |
| Dividends on common stock | Dividends on common stock | (367) | | | (350) | | Dividends on common stock | (140) | | | (122) | |
| Dividends paid to noncontrolling interest holders | Dividends paid to noncontrolling interest holders | (5) | | | (5) | | Dividends paid to noncontrolling interest holders | (2) | | | (2) | |
| Short-term debt, net | Short-term debt, net | (168) | | | (53) | | Short-term debt, net | 399 | | | 175 | |
| Maturities of long-term debt | Maturities of long-term debt | (85) | | | (329) | | Maturities of long-term debt | 0 | | | (85) | |
| | Issuances of long-term debt | Issuances of long-term debt | 1,263 | | | 900 | | Issuances of long-term debt | 450 | | | 465 | |
| Issuances of common stock | Issuances of common stock | 37 | | | 54 | | Issuances of common stock | 125 | | | 13 | |
| | Redemptions of Ameren Illinois preferred stock | | Redemptions of Ameren Illinois preferred stock | (13) | | | 0 | |
| Employee payroll taxes related to stock-based compensation | Employee payroll taxes related to stock-based compensation | (20) | | | (29) | | Employee payroll taxes related to stock-based compensation | (17) | | | (20) | |
| Debt issuance costs | Debt issuance costs | (11) | | | (10) | | Debt issuance costs | (3) | | | (3) | |
| | Other | | Other | (4) | | | 0 | |
| | Net cash provided by financing activities | Net cash provided by financing activities | 644 | | | 178 | | Net cash provided by financing activities | 795 | | | 421 | |
| Net change in cash, cash equivalents, and restricted cash | Net change in cash, cash equivalents, and restricted cash | (8) | | | 48 | | Net change in cash, cash equivalents, and restricted cash | (129) | | | 27 | |
| Cash, cash equivalents, and restricted cash at beginning of year | Cash, cash equivalents, and restricted cash at beginning of year | 176 | | | 107 | | Cash, cash equivalents, and restricted cash at beginning of year | 301 | | | 176 | |
| | Cash, cash equivalents, and restricted cash at end of period | Cash, cash equivalents, and restricted cash at end of period | $ | 168 | | | $ | 155 | | Cash, cash equivalents, and restricted cash at end of period | $ | 172 | | | $ | 203 | |
|
The accompanying notes are an integral part of these consolidated financial statements.
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited) (In millions, except per share amounts)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| | Common Stock | Common Stock | $ | 2 | | | $ | 2 | | | $ | 2 | | | $ | 2 | | Common Stock | | $ | 3 | | | $ | 2 | |
| | | Other Paid-in Capital: | Other Paid-in Capital: | | Other Paid-in Capital: | | |
| Beginning of period | 5,716 | | | 5,649 | | | 5,694 | | | 5,627 | | |
| | Beginning of year | | Beginning of year | | 6,179 | | | 5,694 | |
| Settlement of forward sale agreement through common shares issuance | | Settlement of forward sale agreement through common shares issuance | | 113 | | | 0 | |
| Shares issued under the DRPlus and 401(k) plan | Shares issued under the DRPlus and 401(k) plan | 10 | | | 17 | | | 37 | | | 54 | | Shares issued under the DRPlus and 401(k) plan | | 12 | | | 13 | |
| Stock-based compensation activity | Stock-based compensation activity | 7 | | | 7 | | | 2 | | | (8) | | Stock-based compensation activity | | (9) | | | (12) | |
| | Other paid-in capital, end of period | Other paid-in capital, end of period | 5,733 | | | 5,673 | | | 5,733 | | | 5,673 | | Other paid-in capital, end of period | | 6,295 | | | 5,695 | |
| | Retained Earnings: | Retained Earnings: | | Retained Earnings: | | |
| Beginning of period | 2,525 | | | 2,161 | | | 2,380 | | | 2,024 | | |
| Beginning of year | | Beginning of year | | 2,757 | | | 2,380 | |
| Net income attributable to Ameren common shareholders | Net income attributable to Ameren common shareholders | 367 | | | 364 | | | 756 | | | 734 | | Net income attributable to Ameren common shareholders | | 233 | | | 146 | |
| Dividends on common stock | Dividends on common stock | (123) | | | (117) | | | (367) | | | (350) | | Dividends on common stock | | (140) | | | (122) | |
| | Retained earnings, end of period | Retained earnings, end of period | 2,769 | | | 2,408 | | | 2,769 | | | 2,408 | | Retained earnings, end of period | | 2,850 | | | 2,404 | |
| | Accumulated Other Comprehensive Income (Loss): | Accumulated Other Comprehensive Income (Loss): | | Accumulated Other Comprehensive Income (Loss): | | |
| | Deferred retirement benefit costs, beginning of period | (16) | | | (21) | | | (17) | | | (22) | | |
| Deferred retirement benefit costs, beginning of year | | Deferred retirement benefit costs, beginning of year | | (1) | | | (17) | |
| | Change in deferred retirement benefit costs | Change in deferred retirement benefit costs | 1 | | | 0 | | | 2 | | | 1 | | Change in deferred retirement benefit costs | | 1 | | | 1 | |
| | Deferred retirement benefit costs, end of period | Deferred retirement benefit costs, end of period | (15) | | | (21) | | | (15) | | | (21) | | Deferred retirement benefit costs, end of period | | 0 | | | (16) | |
| Total accumulated other comprehensive loss, end of period | Total accumulated other comprehensive loss, end of period | (15) | | | (21) | | | (15) | | | (21) | | Total accumulated other comprehensive loss, end of period | | 0 | | | (16) | |
| Total Ameren Corporation Shareholders’ Equity | Total Ameren Corporation Shareholders’ Equity | $ | 8,489 | | | $ | 8,062 | | | $ | 8,489 | | | $ | 8,062 | | Total Ameren Corporation Shareholders’ Equity | | $ | 9,148 | | | $ | 8,085 | |
| | Noncontrolling Interests: | Noncontrolling Interests: | | Noncontrolling Interests: | | |
| Beginning of period | 142 | | | 142 | | | 142 | | | 142 | | |
| Beginning of year | | Beginning of year | | 142 | | | 142 | |
| Net income attributable to noncontrolling interest holders | Net income attributable to noncontrolling interest holders | 2 | | | 2 | | | 5 | | | 5 | | Net income attributable to noncontrolling interest holders | | 2 | | | 2 | |
| Dividends paid to noncontrolling interest holders | Dividends paid to noncontrolling interest holders | (2) | | | (2) | | | (5) | | | (5) | | Dividends paid to noncontrolling interest holders | | (2) | | | (2) | |
| | Redemptions of Ameren Illinois preferred stock | | Redemptions of Ameren Illinois preferred stock | | (13) | | | 0 | |
| | Noncontrolling interests, end of period | Noncontrolling interests, end of period | 142 | | | 142 | | | 142 | | | 142 | | Noncontrolling interests, end of period | | 129 | | | 142 | |
| Total Equity | Total Equity | $ | 8,631 | | | $ | 8,204 | | | $ | 8,631 | | | $ | 8,204 | | Total Equity | | $ | 9,277 | | | $ | 8,227 | |
| | | Common stock shares outstanding at beginning of period | 247.1 | | | 245.8 | | | 246.2 | | | 244.5 | | |
| Common stock shares outstanding at beginning of year | | Common stock shares outstanding at beginning of year | | 253.3 | | | 246.2 | |
| Shares issued under forward sale agreement | | Shares issued under forward sale agreement | | 1.6 | | | 0 | |
| Shares issued under the DRPlus and 401(k) plan | Shares issued under the DRPlus and 401(k) plan | 0.1 | | | 0.2 | | | 0.5 | | | 0.7 | | Shares issued under the DRPlus and 401(k) plan | | 0.1 | | | 0.2 | |
| Shares issued for stock-based compensation | Shares issued for stock-based compensation | 0 | | | 0 | | | 0.5 | | | 0.8 | | Shares issued for stock-based compensation | | 0.5 | | | 0.5 | |
| Common stock shares outstanding at end of period | Common stock shares outstanding at end of period | 247.2 | | | 246.0 | | | 247.2 | | | 246.0 | | Common stock shares outstanding at end of period | | 255.5 | | | 246.9 | |
| | Dividends per common share | Dividends per common share | $ | 0.4950 | | | $ | 0.4750 | | | $ | 1.4850 | | | $ | 1.4250 | | Dividends per common share | | $ | 0.550 | | | $ | 0.495 | |
The accompanying notes are an integral part of these consolidated financial statements.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF INCOME (LOSS)
(Unaudited) (In millions)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| Operating Revenues: | Operating Revenues: | | | | | | | | Operating Revenues: | | | | |
| Electric | Electric | $ | 984 | | | $ | 1,040 | | | $ | 2,386 | | | $ | 2,517 | | Electric | | $ | 641 | | | $ | 631 | |
| Natural gas | Natural gas | 17 | | | 19 | | | 87 | | | 98 | | Natural gas | | 63 | | | 49 | |
| | Total operating revenues | Total operating revenues | 1,001 | | | 1,059 | | | 2,473 | | | 2,615 | | Total operating revenues | | 704 | | | 680 | |
| Operating Expenses: | Operating Expenses: | | | | | | | | Operating Expenses: | | | | |
| Fuel | Fuel | 141 | | | 147 | | | 400 | | | 409 | | Fuel | | 65 | | | 140 | |
| Purchased power | Purchased power | 48 | | | 49 | | | 124 | | | 160 | | Purchased power | | 88 | | | 39 | |
| Natural gas purchased for resale | Natural gas purchased for resale | 5 | | | 6 | | | 29 | | | 41 | | Natural gas purchased for resale | | 31 | | | 18 | |
| Other operations and maintenance | Other operations and maintenance | 221 | | | 242 | | | 662 | | | 720 | | Other operations and maintenance | | 225 | | | 239 | |
| | Depreciation and amortization | Depreciation and amortization | 154 | | | 138 | | | 448 | | | 417 | | Depreciation and amortization | | 156 | | | 139 | |
| Taxes other than income taxes | Taxes other than income taxes | 92 | | | 96 | | | 254 | | | 256 | | Taxes other than income taxes | | 77 | | | 79 | |
| Total operating expenses | Total operating expenses | 661 | | | 678 | | | 1,917 | | | 2,003 | | Total operating expenses | | 642 | | | 654 | |
| Operating Income | Operating Income | 340 | | | 381 | | | 556 | | | 612 | | Operating Income | | 62 | | | 26 | |
| | Other Income, Net | Other Income, Net | 26 | | | 15 | | | 55 | | | 43 | | Other Income, Net | | 23 | | | 4 | |
| Interest Charges | Interest Charges | 50 | | | 44 | | | 140 | | | 136 | | Interest Charges | | 39 | | | 40 | |
| Income Before Income Taxes | 316 | | | 352 | | | 471 | | | 519 | | |
| Income Taxes | 18 | | | 51 | | | 29 | | | 70 | | |
| Net Income | 298 | | | 301 | | | 442 | | | 449 | | |
| Income (Loss) Before Income Taxes | | Income (Loss) Before Income Taxes | | 46 | | | (10) | |
| Income Tax Benefit | | Income Tax Benefit | | (2) | | | (1) | |
| Net Income (Loss) | | Net Income (Loss) | | 48 | | | (9) | |
| | Preferred Stock Dividends | Preferred Stock Dividends | 1 | | | 1 | | | 3 | | | 3 | | Preferred Stock Dividends | | 1 | | | 1 | |
| Net Income Available to Common Shareholder | $ | 297 | | | $ | 300 | | | $ | 439 | | | $ | 446 | | |
| Net Income (Loss) Available to Common Shareholder | | Net Income (Loss) Available to Common Shareholder | | $ | 47 | | | $ | (10) | |
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
BALANCE SHEET
(Unaudited) (In millions, except per share amounts)
| | | September 30,
2020 | | December 31, 2019 | | March 31, 2021 | | December 31, 2020 |
| ASSETS | ASSETS | | | | ASSETS | | | |
| Current Assets: | Current Assets: | | Current Assets: | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 0 | | | $ | 9 | | Cash and cash equivalents | $ | 1 | | | $ | 136 | |
| Advances to money pool | Advances to money pool | 5 | | | 0 | | Advances to money pool | 0 | | | 139 | |
| Accounts receivable – trade (less allowance for doubtful accounts of $14 and $7, respectively) | 263 | | | 164 | | |
| Accounts receivable – trade (less allowance for doubtful accounts of $15 and $16, respectively) | | Accounts receivable – trade (less allowance for doubtful accounts of $15 and $16, respectively) | 156 | | | 166 | |
| Accounts receivable – affiliates | Accounts receivable – affiliates | 12 | | | 30 | | Accounts receivable – affiliates | 69 | | | 57 | |
| Unbilled revenue | Unbilled revenue | 117 | | | 139 | | Unbilled revenue | 109 | | | 133 | |
| Miscellaneous accounts receivable | Miscellaneous accounts receivable | 44 | | | 33 | | Miscellaneous accounts receivable | 43 | | | 36 | |
| Inventories | Inventories | 408 | | | 373 | | Inventories | 362 | | | 386 | |
| | Current regulatory assets | | Current regulatory assets | 141 | | | 60 | |
| Other current assets | Other current assets | 119 | | | 66 | | Other current assets | 70 | | | 79 | |
| Total current assets | Total current assets | 968 | | | 814 | | Total current assets | 951 | | | 1,192 | |
| Property, Plant, and Equipment, Net | Property, Plant, and Equipment, Net | 12,991 | | | 12,635 | | Property, Plant, and Equipment, Net | 14,221 | | | 13,879 | |
| Investments and Other Assets: | Investments and Other Assets: | | Investments and Other Assets: | |
| Nuclear decommissioning trust fund | Nuclear decommissioning trust fund | 904 | | | 847 | | Nuclear decommissioning trust fund | 1,010 | | | 982 | |
| | Regulatory assets | Regulatory assets | 310 | | | 285 | | Regulatory assets | 413 | | | 347 | |
| Other assets | Other assets | 350 | | | 356 | | Other assets | 375 | | | 383 | |
| Total investments and other assets | Total investments and other assets | 1,564 | | | 1,488 | | Total investments and other assets | 1,798 | | | 1,712 | |
| TOTAL ASSETS | TOTAL ASSETS | $ | 15,523 | | | $ | 14,937 | | TOTAL ASSETS | $ | 16,970 | | | $ | 16,783 | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | LIABILITIES AND SHAREHOLDERS’ EQUITY | | | |
| Current Liabilities: | Current Liabilities: | | Current Liabilities: | |
| Current maturities of long-term debt | Current maturities of long-term debt | $ | 7 | | | $ | 92 | | Current maturities of long-term debt | $ | 8 | | | $ | 8 | |
| Short-term debt | Short-term debt | 0 | | | 234 | | Short-term debt | 204 | | | 0 | |
| | Accounts and wages payable | Accounts and wages payable | 256 | | | 465 | | Accounts and wages payable | 267 | | | 501 | |
| Accounts payable – affiliates | Accounts payable – affiliates | 70 | | | 52 | | Accounts payable – affiliates | 40 | | | 46 | |
| Taxes accrued | Taxes accrued | 164 | | | 24 | | Taxes accrued | 85 | | | 42 | |
| Interest accrued | Interest accrued | 59 | | | 48 | | Interest accrued | 46 | | | 53 | |
| Current asset retirement obligations | Current asset retirement obligations | 53 | | | 53 | | Current asset retirement obligations | 59 | | | 60 | |
| Current regulatory liabilities | 40 | | | 62 | | |
| | Other current liabilities | Other current liabilities | 102 | | | 96 | | Other current liabilities | 116 | | | 123 | |
| Total current liabilities | Total current liabilities | 751 | | | 1,126 | | Total current liabilities | 825 | | | 833 | |
| Long-term Debt, Net | Long-term Debt, Net | 4,561 | | | 4,098 | | Long-term Debt, Net | 5,096 | | | 5,096 | |
| Deferred Credits and Other Liabilities: | Deferred Credits and Other Liabilities: | | Deferred Credits and Other Liabilities: | |
| Accumulated deferred income taxes and investment tax credits, net | 1,689 | | | 1,612 | | |
| Accumulated deferred income taxes and tax credits, net | | Accumulated deferred income taxes and tax credits, net | 1,756 | | | 1,742 | |
| | Regulatory liabilities | Regulatory liabilities | 2,898 | | | 2,937 | | Regulatory liabilities | 3,130 | | | 3,110 | |
| Asset retirement obligations | Asset retirement obligations | 670 | | | 634 | | Asset retirement obligations | 700 | | | 691 | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | 129 | | | 141 | | Pension and other postretirement benefits | 34 | | | 35 | |
| Other deferred credits and liabilities | Other deferred credits and liabilities | 37 | | | 40 | | Other deferred credits and liabilities | 59 | | | 66 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 5,423 | | | 5,364 | | Total deferred credits and other liabilities | 5,679 | | | 5,644 | |
| Commitments and Contingencies (Notes 2, 8, 9, and 10) | Commitments and Contingencies (Notes 2, 8, 9, and 10) | | | | Commitments and Contingencies (Notes 2, 8, 9, and 10) | 0 | | 0 |
| Shareholders’ Equity: | Shareholders’ Equity: | | Shareholders’ Equity: | |
| Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding | Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding | 511 | | | 511 | | Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding | 511 | | | 511 | |
| Other paid-in capital, principally premium on common stock | Other paid-in capital, principally premium on common stock | 2,027 | | | 2,027 | | Other paid-in capital, principally premium on common stock | 2,631 | | | 2,518 | |
| Preferred stock | Preferred stock | 80 | | | 80 | | Preferred stock | 80 | | | 80 | |
| Retained earnings | Retained earnings | 2,170 | | | 1,731 | | Retained earnings | 2,148 | | | 2,101 | |
| Total shareholders’ equity | Total shareholders’ equity | 4,788 | | | 4,349 | | Total shareholders’ equity | 5,370 | | | 5,210 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 15,523 | | | $ | 14,937 | | TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 16,970 | | | $ | 16,783 | |
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
| | | Nine Months Ended September 30, | | Three Months Ended March 31, |
| | 2020 | | 2019 | | 2021 | | 2020 |
| Cash Flows From Operating Activities: | Cash Flows From Operating Activities: | | | | Cash Flows From Operating Activities: | | | |
| Net income | $ | 442 | | | $ | 449 | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Net income (loss) | | Net income (loss) | $ | 48 | | | $ | (9) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |
| | Depreciation and amortization | Depreciation and amortization | 452 | | | 419 | | Depreciation and amortization | 171 | | | 148 | |
| Amortization of nuclear fuel | Amortization of nuclear fuel | 68 | | | 56 | | Amortization of nuclear fuel | 0 | | | 23 | |
| | Amortization of debt issuance costs and premium/discounts | Amortization of debt issuance costs and premium/discounts | 4 | | | 4 | | Amortization of debt issuance costs and premium/discounts | 1 | | | 2 | |
| Deferred income taxes and investment tax credits, net | Deferred income taxes and investment tax credits, net | (1) | | | (9) | | Deferred income taxes and investment tax credits, net | 4 | | | (5) | |
| Allowance for equity funds used during construction | Allowance for equity funds used during construction | (15) | | | (14) | | Allowance for equity funds used during construction | (4) | | | (2) | |
| Other | Other | 13 | | | 10 | | Other | 3 | | | 2 | |
| Changes in assets and liabilities: | Changes in assets and liabilities: | | Changes in assets and liabilities: | |
| Receivables | Receivables | (93) | | | (32) | | Receivables | 20 | | | (3) | |
| Inventories | Inventories | (33) | | | 3 | | Inventories | 24 | | | (18) | |
| Accounts and wages payable | Accounts and wages payable | (168) | | | (153) | | Accounts and wages payable | (201) | | | (172) | |
| Taxes accrued | Taxes accrued | 158 | | | 148 | | Taxes accrued | 39 | | | 55 | |
| Regulatory assets and liabilities | Regulatory assets and liabilities | (56) | | | 5 | | Regulatory assets and liabilities | (164) | | | 16 | |
| Assets, other | Assets, other | (10) | | | (37) | | Assets, other | 13 | | | 2 | |
| Liabilities, other | Liabilities, other | (46) | | | (4) | | Liabilities, other | (9) | | | 0 | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | (6) | | | (5) | | Pension and other postretirement benefits | 4 | | | 2 | |
| | Net cash provided by operating activities | 709 | | | 840 | | |
| Net cash provided by (used in) operating activities | | Net cash provided by (used in) operating activities | (51) | | | 41 | |
| Cash Flows From Investing Activities: | Cash Flows From Investing Activities: | | | | Cash Flows From Investing Activities: | | | |
| Capital expenditures | Capital expenditures | (778) | | | (751) | | Capital expenditures | (341) | | | (278) | |
| Wind generation expenditures | | Wind generation expenditures | (193) | | | 0 | |
| Nuclear fuel expenditures | Nuclear fuel expenditures | (61) | | | (26) | | Nuclear fuel expenditures | (1) | | | (35) | |
| Purchases of securities – nuclear decommissioning trust fund | Purchases of securities – nuclear decommissioning trust fund | (169) | | | (192) | | Purchases of securities – nuclear decommissioning trust fund | (152) | | | (96) | |
| Sales and maturities of securities – nuclear decommissioning trust fund | Sales and maturities of securities – nuclear decommissioning trust fund | 135 | | | 184 | | Sales and maturities of securities – nuclear decommissioning trust fund | 150 | | | 81 | |
| Purchase of bonds | 0 | | | (207) | | |
| Proceeds from sale of remarketed bonds | 0 | | | 207 | | |
| | Money pool advances, net | Money pool advances, net | (5) | | | 0 | | Money pool advances, net | 139 | | | 0 | |
| Other | 1 | | | 0 | | |
| | Net cash used in investing activities | Net cash used in investing activities | (877) | | | (785) | | Net cash used in investing activities | (398) | | | (328) | |
| Cash Flows From Financing Activities: | Cash Flows From Financing Activities: | | | | Cash Flows From Financing Activities: | | | |
| Dividends on common stock | 0 | | | (250) | | |
| | Dividends on preferred stock | Dividends on preferred stock | (3) | | | (3) | | Dividends on preferred stock | (1) | | | (1) | |
| Short-term debt, net | Short-term debt, net | (234) | | | 89 | | Short-term debt, net | 204 | | | (104) | |
| | Maturities of long-term debt | Maturities of long-term debt | (85) | | | (329) | | Maturities of long-term debt | 0 | | | (85) | |
| Issuances of long-term debt | Issuances of long-term debt | 465 | | | 450 | | Issuances of long-term debt | 0 | | | 465 | |
| | Capital contribution from parent | | Capital contribution from parent | 113 | | | 0 | |
| Debt issuance costs | Debt issuance costs | (4) | | | (6) | | Debt issuance costs | 0 | | | (3) | |
| Net cash provided by (used in) financing activities | 139 | | | (49) | | |
| Net cash provided by financing activities | | Net cash provided by financing activities | 316 | | | 272 | |
| Net change in cash, cash equivalents, and restricted cash | Net change in cash, cash equivalents, and restricted cash | (29) | | | 6 | | Net change in cash, cash equivalents, and restricted cash | (133) | | | (15) | |
| Cash, cash equivalents, and restricted cash at beginning of year | Cash, cash equivalents, and restricted cash at beginning of year | 39 | | | 8 | | Cash, cash equivalents, and restricted cash at beginning of year | 145 | | | 39 | |
| Cash, cash equivalents, and restricted cash at end of period | Cash, cash equivalents, and restricted cash at end of period | $ | 10 | | | $ | 14 | | Cash, cash equivalents, and restricted cash at end of period | $ | 12 | | | $ | 24 | |
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited) (In millions)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| Common Stock | Common Stock | $ | 511 | | | $ | 511 | | | $ | 511 | | | $ | 511 | | Common Stock | | $ | 511 | | | $ | 511 | |
| | Other Paid-in Capital | 2,027 | | | 1,903 | | | 2,027 | | | 1,903 | | |
| Other Paid-in Capital: | | Other Paid-in Capital: | | |
| Beginning of year | | Beginning of year | | 2,518 | | | 2,027 | |
| Capital contribution from parent | | Capital contribution from parent | | 113 | | | 0 | |
| | Other paid-in capital, end of period | | Other paid-in capital, end of period | | 2,631 | | | 2,027 | |
| | | Preferred Stock | Preferred Stock | 80 | | | 80 | | | 80 | | | 80 | | Preferred Stock | | 80 | | | 80 | |
| | Retained Earnings: | Retained Earnings: | | Retained Earnings: | | |
| Beginning of period | 1,873 | | | 1,781 | | | 1,731 | | | 1,735 | | |
| Net income | 298 | | | 301 | | | 442 | | | 449 | | |
| Dividends on common stock | 0 | | | (150) | | | 0 | | | (250) | | |
| Beginning of year | | Beginning of year | | 2,101 | | | 1,731 | |
| Net income (loss) | | Net income (loss) | | 48 | | | (9) | |
| | Dividends on preferred stock | Dividends on preferred stock | (1) | | | (1) | | | (3) | | | (3) | | Dividends on preferred stock | | (1) | | | (1) | |
| Retained earnings, end of period | Retained earnings, end of period | 2,170 | | | 1,931 | | | 2,170 | | | 1,931 | | Retained earnings, end of period | | 2,148 | | | 1,721 | |
| | Total Shareholders’ Equity | Total Shareholders’ Equity | $ | 4,788 | | | $ | 4,425 | | | $ | 4,788 | | | $ | 4,425 | | Total Shareholders’ Equity | | $ | 5,370 | | | $ | 4,339 | |
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF INCOME
(Unaudited) (In millions)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| Operating Revenues: | Operating Revenues: | | | | | | | | Operating Revenues: | | | | |
| Electric | Electric | $ | 467 | | | $ | 452 | | | $ | 1,346 | | | $ | 1,305 | | Electric | | $ | 476 | | | $ | 452 | |
| Natural gas | Natural gas | 122 | | | 112 | | | 533 | | | 568 | | Natural gas | | 347 | | | 271 | |
| Total operating revenues | Total operating revenues | 589 | | | 564 | | | 1,879 | | | 1,873 | | Total operating revenues | | 823 | | | 723 | |
| Operating Expenses: | Operating Expenses: | | | | | | | | Operating Expenses: | | | | |
| Purchased power | Purchased power | 97 | | | 101 | | | 271 | | | 284 | | Purchased power | | 106 | | | 98 | |
| Natural gas purchased for resale | Natural gas purchased for resale | 29 | | | 25 | | | 154 | | | 195 | | Natural gas purchased for resale | | 134 | | | 89 | |
| Other operations and maintenance | Other operations and maintenance | 197 | | | 193 | | | 578 | | | 580 | | Other operations and maintenance | | 194 | | | 199 | |
| Depreciation and amortization | Depreciation and amortization | 109 | | | 102 | | | 323 | | | 304 | | Depreciation and amortization | | 115 | | | 107 | |
| Taxes other than income taxes | Taxes other than income taxes | 33 | | | 33 | | | 107 | | | 110 | | Taxes other than income taxes | | 46 | | | 42 | |
| Total operating expenses | Total operating expenses | 465 | | | 454 | | | 1,433 | | | 1,473 | | Total operating expenses | | 595 | | | 535 | |
| Operating Income | Operating Income | 124 | | | 110 | | | 446 | | | 400 | | Operating Income | | 228 | | | 188 | |
| | Other Income, Net | Other Income, Net | 17 | | | 13 | | | 45 | | | 39 | | Other Income, Net | | 14 | | | 11 | |
| Interest Charges | Interest Charges | 39 | | | 38 | | | 116 | | | 111 | | Interest Charges | | 42 | | | 39 | |
| Income Before Income Taxes | Income Before Income Taxes | 102 | | | 85 | | | 375 | | | 328 | | Income Before Income Taxes | | 200 | | | 160 | |
| Income Taxes | Income Taxes | 25 | | | 20 | | | 93 | | | 79 | | Income Taxes | | 50 | | | 39 | |
| Net Income | Net Income | 77 | | | 65 | | | 282 | | | 249 | | Net Income | | 150 | | | 121 | |
| | Preferred Stock Dividends | Preferred Stock Dividends | 0 | | | 0 | | | 2 | | | 2 | | Preferred Stock Dividends | | 1 | | | 1 | |
| Net Income Available to Common Shareholder | Net Income Available to Common Shareholder | $ | 77 | | | $ | 65 | | | $ | 280 | | | $ | 247 | | Net Income Available to Common Shareholder | | $ | 149 | | | $ | 120 | |
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
BALANCE SHEET
(Unaudited) (In millions)
| | | September 30,
2020 | | December 31, 2019 | | March 31, 2021 | | December 31, 2020 |
| ASSETS | ASSETS | | | | ASSETS | | | |
| Current Assets: | Current Assets: | | Current Assets: | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 0 | | | $ | 0 | | Cash and cash equivalents | $ | 0 | | | $ | 0 | |
| | Accounts receivable – trade (less allowance for doubtful accounts of $30 and $10, respectively) | 247 | | | 215 | | |
| Accounts receivable – trade (less allowance for doubtful accounts of $32 and $34, respectively) | | Accounts receivable – trade (less allowance for doubtful accounts of $32 and $34, respectively) | 293 | | | 234 | |
| Accounts receivable – affiliates | Accounts receivable – affiliates | 15 | | | 28 | | Accounts receivable – affiliates | 71 | | | 64 | |
| Unbilled revenue | Unbilled revenue | 104 | | | 139 | | Unbilled revenue | 101 | | | 136 | |
| Miscellaneous accounts receivable | Miscellaneous accounts receivable | 24 | | | 25 | | Miscellaneous accounts receivable | 5 | | | 12 | |
| Inventories | Inventories | 149 | | | 121 | | Inventories | 105 | | | 135 | |
| Restricted cash | | Restricted cash | 125 | | | 6 | |
| Current regulatory assets | Current regulatory assets | 29 | | | 57 | | Current regulatory assets | 217 | | | 37 | |
| | Other current assets | Other current assets | 31 | | | 29 | | Other current assets | 24 | | | 23 | |
| Total current assets | Total current assets | 599 | | | 614 | | Total current assets | 941 | | | 647 | |
| Property, Plant, and Equipment, Net | Property, Plant, and Equipment, Net | 10,861 | | | 10,083 | | Property, Plant, and Equipment, Net | 11,358 | | | 11,201 | |
| Investments and Other Assets: | Investments and Other Assets: | | Investments and Other Assets: | |
| Goodwill | Goodwill | 411 | | | 411 | | Goodwill | 411 | | | 411 | |
| Regulatory assets | Regulatory assets | 748 | | | 694 | | Regulatory assets | 820 | | | 742 | |
| Other assets | Other assets | 480 | | | 383 | | Other assets | 442 | | | 534 | |
| Total investments and other assets | Total investments and other assets | 1,639 | | | 1,488 | | Total investments and other assets | 1,673 | | | 1,687 | |
| TOTAL ASSETS | TOTAL ASSETS | $ | 13,099 | | | $ | 12,185 | | TOTAL ASSETS | $ | 13,972 | | | $ | 13,535 | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | LIABILITIES AND SHAREHOLDERS' EQUITY | | | | LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
| Current Liabilities: | Current Liabilities: | | Current Liabilities: | |
| | Short-term debt | Short-term debt | $ | 242 | | | $ | 53 | | Short-term debt | $ | 323 | | | $ | 0 | |
| | Borrowings from money pool | | Borrowings from money pool | 0 | | | 19 | |
| Accounts and wages payable | Accounts and wages payable | 318 | | | 299 | | Accounts and wages payable | 255 | | | 363 | |
| Accounts payable – affiliates | Accounts payable – affiliates | 43 | | | 82 | | Accounts payable – affiliates | 43 | | | 51 | |
| | Customer deposits | Customer deposits | 80 | | | 77 | | Customer deposits | 70 | | | 74 | |
| | Current regulatory liabilities | Current regulatory liabilities | 47 | | | 84 | | Current regulatory liabilities | 200 | | | 88 | |
| Other current liabilities | Other current liabilities | 234 | | | 249 | | Other current liabilities | 207 | | | 221 | |
| Total current liabilities | Total current liabilities | 964 | | | 844 | | Total current liabilities | 1,098 | | | 816 | |
| Long-term Debt, Net | Long-term Debt, Net | 3,576 | | | 3,575 | | Long-term Debt, Net | 3,947 | | | 3,946 | |
| Deferred Credits and Other Liabilities: | Deferred Credits and Other Liabilities: | | Deferred Credits and Other Liabilities: | |
| Accumulated deferred income taxes and investment tax credits, net | Accumulated deferred income taxes and investment tax credits, net | 1,314 | | | 1,224 | | Accumulated deferred income taxes and investment tax credits, net | 1,430 | | | 1,367 | |
| | Regulatory liabilities | Regulatory liabilities | 1,968 | | | 1,849 | | Regulatory liabilities | 1,988 | | | 2,063 | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | 204 | | | 214 | | Pension and other postretirement benefits | 67 | | | 69 | |
| Environmental remediation | Environmental remediation | 66 | | | 87 | | Environmental remediation | 51 | | | 57 | |
| Other deferred credits and liabilities | Other deferred credits and liabilities | 245 | | | 260 | | Other deferred credits and liabilities | 249 | | | 251 | |
| Total deferred credits and other liabilities | Total deferred credits and other liabilities | 3,797 | | | 3,634 | | Total deferred credits and other liabilities | 3,785 | | | 3,807 | |
| Commitments and Contingencies (Notes 2, 8 and 9) | Commitments and Contingencies (Notes 2, 8 and 9) | | | | Commitments and Contingencies (Notes 2, 8 and 9) | 0 | | 0 |
| Shareholders' Equity: | Shareholders' Equity: | | Shareholders' Equity: | |
| Common stock, 0 par value, 45.0 shares authorized – 25.5 shares outstanding | Common stock, 0 par value, 45.0 shares authorized – 25.5 shares outstanding | 0 | | | 0 | | Common stock, 0 par value, 45.0 shares authorized – 25.5 shares outstanding | 0 | | | 0 | |
| Other paid-in capital | Other paid-in capital | 2,538 | | | 2,188 | | Other paid-in capital | 2,692 | | | 2,652 | |
| Preferred stock | Preferred stock | 62 | | | 62 | | Preferred stock | 49 | | | 62 | |
| Retained earnings | Retained earnings | 2,162 | | | 1,882 | | Retained earnings | 2,401 | | | 2,252 | |
| | Total shareholders' equity | Total shareholders' equity | 4,762 | | | 4,132 | | Total shareholders' equity | 5,142 | | | 4,966 | |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 13,099 | | | $ | 12,185 | | TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 13,972 | | | $ | 13,535 | |
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF CASH FLOWS
(Unaudited) (In millions)
| | | Nine Months Ended September 30, | | Three Months Ended March 31, |
| | 2020 | | 2019 | | 2021 | | 2020 |
| Cash Flows From Operating Activities: | Cash Flows From Operating Activities: | | | | Cash Flows From Operating Activities: | | | |
| Net income | Net income | $ | 282 | | | $ | 249 | | Net income | $ | 150 | | | $ | 121 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | | Adjustments to reconcile net income to net cash provided by operating activities: | |
| Depreciation and amortization | Depreciation and amortization | 322 | | | 303 | | Depreciation and amortization | 115 | | | 106 | |
| Amortization of debt issuance costs and premium/discounts | Amortization of debt issuance costs and premium/discounts | 9 | | | 9 | | Amortization of debt issuance costs and premium/discounts | 3 | | | 2 | |
| Deferred income taxes and investment tax credits, net | Deferred income taxes and investment tax credits, net | 72 | | | 42 | | Deferred income taxes and investment tax credits, net | 53 | | | 22 | |
| | Other | Other | 0 | | | 8 | | Other | 3 | | | (2) | |
| Changes in assets and liabilities: | Changes in assets and liabilities: | | Changes in assets and liabilities: | |
| Receivables | Receivables | (9) | | | 18 | | Receivables | (24) | | | (6) | |
| Inventories | Inventories | (28) | | | (7) | | Inventories | 30 | | | 41 | |
| Accounts and wages payable | Accounts and wages payable | (12) | | | (48) | | Accounts and wages payable | (40) | | | (20) | |
| Taxes accrued | Taxes accrued | (20) | | | 14 | | Taxes accrued | 3 | | | 16 | |
| Regulatory assets and liabilities | Regulatory assets and liabilities | 11 | | | 147 | | Regulatory assets and liabilities | (255) | | | (28) | |
| Assets, other | Assets, other | (52) | | | (15) | | Assets, other | (15) | | | (4) | |
| Liabilities, other | Liabilities, other | (30) | | | 13 | | Liabilities, other | (9) | | | (14) | |
| Pension and other postretirement benefits | Pension and other postretirement benefits | (30) | | | (27) | | Pension and other postretirement benefits | (1) | | | (2) | |
| | Net cash provided by operating activities | Net cash provided by operating activities | 515 | | | 706 | | Net cash provided by operating activities | 13 | | | 232 | |
| Cash Flows From Investing Activities: | Cash Flows From Investing Activities: | | | | Cash Flows From Investing Activities: | | | |
| Capital expenditures | Capital expenditures | (1,031) | | | (900) | | Capital expenditures | (337) | | | (324) | |
| | Other | Other | 1 | | | (3) | | Other | 0 | | | 1 | |
| Net cash used in investing activities | Net cash used in investing activities | (1,030) | | | (903) | | Net cash used in investing activities | (337) | | | (323) | |
| Cash Flows From Financing Activities: | Cash Flows From Financing Activities: | | | | Cash Flows From Financing Activities: | | | |
| | Dividends on preferred stock | Dividends on preferred stock | (2) | | | (2) | | Dividends on preferred stock | (1) | | | (1) | |
| Short-term debt, net | Short-term debt, net | 189 | | | 237 | | Short-term debt, net | 323 | | | 7 | |
| | Money pool borrowings, net | | Money pool borrowings, net | (19) | | | 0 | |
| | Capital contributions from parent | Capital contributions from parent | 350 | | | 0 | | Capital contributions from parent | 40 | | | 100 | |
| Redemption of preferred stock | | Redemption of preferred stock | (13) | | | 0 | |
| | Other | Other | 0 | | | (1) | | Other | (4) | | | 0 | |
| Net cash provided by financing activities | Net cash provided by financing activities | 537 | | | 234 | | Net cash provided by financing activities | 326 | | | 106 | |
| Net change in cash, cash equivalents, and restricted cash | Net change in cash, cash equivalents, and restricted cash | 22 | | | 37 | | Net change in cash, cash equivalents, and restricted cash | 2 | | | 15 | |
| Cash, cash equivalents and restricted cash at beginning of year | Cash, cash equivalents and restricted cash at beginning of year | 125 | | | 80 | | Cash, cash equivalents and restricted cash at beginning of year | 147 | | | 125 | |
| Cash, cash equivalents, and restricted cash at end of period | Cash, cash equivalents, and restricted cash at end of period | $ | 147 | | | $ | 117 | | Cash, cash equivalents, and restricted cash at end of period | $ | 149 | | | $ | 140 | |
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF SHAREHOLDERS’ EQUITY
(Unaudited) (In millions)
| | | | Three Months Ended September 30, | | Nine Months Ended September 30, | | | Three Months Ended March 31, |
| | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 |
| Common Stock | Common Stock | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | Common Stock | | $ | 0 | | | $ | 0 | |
| | Other Paid-in Capital: | Other Paid-in Capital: | | Other Paid-in Capital: | | |
| Beginning of period | 2,538 | | | 2,173 | | | 2,188 | | | 2,173 | | |
| Beginning of year | | Beginning of year | | 2,652 | | | 2,188 | |
| Capital contribution from parent | Capital contribution from parent | 0 | | | 0 | | | 350 | | | 0 | | Capital contribution from parent | | 40 | | | 100 | |
| | Other paid-in capital, end of period | Other paid-in capital, end of period | 2,538 | | | 2,173 | | | 2,538 | | | 2,173 | | Other paid-in capital, end of period | | 2,692 | | | 2,288 | |
| | | Preferred Stock | 62 | | | 62 | | | 62 | | | 62 | | |
| Preferred Stock: | | Preferred Stock: | | |
| Beginning of year | | Beginning of year | | 62 | | | 62 | |
| Redemptions of preferred stock | | Redemptions of preferred stock | | (13) | | | 0 | |
| | Preferred stock, end of period | | Preferred stock, end of period | | 49 | | | 62 | |
| | Retained Earnings: | Retained Earnings: | | Retained Earnings: | | |
| Beginning of period | 2,085 | | | 1,721 | | | 1,882 | | | 1,539 | | |
| Beginning of year | | Beginning of year | | 2,252 | | | 1,882 | |
| Net income | Net income | 77 | | | 65 | | | 282 | | | 249 | | Net income | | 150 | | | 121 | |
| | Dividends on preferred stock | Dividends on preferred stock | 0 | | | 0 | | | (2) | | | (2) | | Dividends on preferred stock | | (1) | | | (1) | |
| | Retained earnings, end of period | Retained earnings, end of period | 2,162 | | | 1,786 | | | 2,162 | | | 1,786 | | Retained earnings, end of period | | 2,401 | | | 2,002 | |
| | | Total Shareholders’ Equity | Total Shareholders’ Equity | $ | 4,762 | | | $ | 4,021 | | | $ | 4,762 | | | $ | 4,021 | | Total Shareholders’ Equity | | $ | 5,142 | | | $ | 4,352 | |
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN CORPORATION (Consolidated)
UNION ELECTRIC COMPANY (d/b/a Ameren Missouri)
AMEREN ILLINOIS COMPANY (d/b/a Ameren Illinois)
COMBINED NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 2020March 31, 2021
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Ameren has other subsidiaries that conduct other activities, such as providing shared services.
•Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
•Ameren Illinois Company, doing business as 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.
The COVID-19 pandemic continues to beaffect our results of operations, financial position, and liquidity, but we expect a rapidly evolving situation.gradual improvement in sales volumes in 2021, compared to 2020. In the first ninethree months of 2020, we experienced a net decrease in2021, our sales volumes were comparable to the same period in 2020, excluding the estimated effects of weather and customer energy-efficiency programs. However, we experienced an increase in our accounts receivable balances that were past due or that were a part of a deferred payment arrangement, and a decline in our cash collections from customers.The continued effect of the COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. Shelter-in-place orders began taking effect in our service territories in mid-March 2020. These orders generally required individuals to remain at home and precluded or limited the operation of businesses that were deemed nonessential. While our business operations were deemed essential and were not directly impacted by the shelter-in-place orders, approximately 65% of our workforce transitioned to remote working arrangements in mid-March 2020. In early June 2020, a small portion of our workforce began the process of returning to our work locations under a phased approach and approximately 50% of our workforce continues to work remotely. In mid-May 2020, shelter-in-place orders effective in our service territories began to be relaxed, with fewergeneral, restrictions on social activities and nonessential businesses beginning to reopen.implemented in our service territories in 2020 have been relaxed. However, certain restrictions remain in place that limit individual activities and the operation of nonessential businesses. Additionalbusinesses and additional restrictions may be imposed in the future.
We continue to assess the impacts the COVID-19 pandemic is having on our businesses, including but not limited to impacts on our liquidity; demand for residential, commercial, and industrial electric and natural gas services; more flexiblechanges in deferred payment plansarrangements for customers; the timing and extent to which recovery of incremental costs incurred, net of savings, and forgone customer late fee revenues at Ameren Missouri is allowed by the MoPSC; changes in our ability to disconnect customers for nonpayment; bad debt expense; supply chain operations; the availability of our employees and contractors; counterparty credit; capital construction; infrastructure operations and maintenance; energy-efficiency programs; and pension valuations. In March 2021, the MoPSC approved accounting authority orders that allowed Ameren Missouri to accumulate $9 million of certain costs incurred related to the COVID-19 pandemic, net of savings, as well as forgone customer late fees and reconnection fee revenues from March 2020 to March 2021, for potential recovery in the current electric and natural gas service regulatory rate reviews. While the revenues from Ameren Illinois’ electric distribution business, residential and small nonresidential customers of Ameren Illinois’ natural gas distribution business, and Ameren Illinois’ and ATXI’s electric transmission businesses are decoupled from changes in sales volumes, earnings at Ameren Missouri and those associated with Ameren Illinois’ large nonresidential natural gas customers are exposed to such changes. Regarding uncollectible accounts receivable, Ameren Illinois’ electric distribution and natural gas distribution businesses have bad debt riders, which provide for recovery of bad debt write-offs, net of any subsequent recoveries. Pursuant to a June 2020 ICC order, Ameren Illinois’ electric bad debt rider provides for the recovery of bad debt expense in 2020. Ameren Missouri does not have a bad debt rider or regulatory tracking mechanismtracker, and thus its earnings are exposed to increases in bad debt expense. In October 2020,expense, absent regulatory relief. However, Ameren Missouri filed requests with the MoPSC for accounting authority orders relateddoes not expect a material impact to costs incurred, net of savings, and forgone customer late fee revenues resultingearnings from the COVID-19 pandemic. Our customers’ payment for our services has been adversely affected by the COVID-19 pandemic, resultingincreases in a decrease to our cash flow from operations.bad debt expense. As of September 30, 2020,March 31, 2021, accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement represented 26%27%, 18%19%, and 35%32%, or $151$137 million, $49$33 million, and $102$104 million, of Ameren’s, Ameren Missouri’s, and Ameren Illinois’ customer trade receivables before allowance for doubtful accounts, respectively. As of September 30, 2019,March 31, 2020, these percentages were 13%21%, 9%16%, and 18%25%, or $65$99 million, $23$29 million, and $42$70 million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively. For information regarding Ameren Missouri’s and Ameren Illinois’ suspension and subsequent reinstatement of customer disconnections and late fee charges for nonpayment and Ameren Missouri’s requests for accounting authority orders related to the COVID-19 pandemic, see Note 2 – Rate and Regulatory Matters below.
The Coronavirus Aid, Relief, and Economic Security Act is a federal law enacted in March 2020. Provisions in the act include temporary changes to the utilization of net operating losses, deferral of the payment of the employer portion of Social Security taxes, and additional funding for customer energy assistance, among other things. As of September 30, 2020, the implementation of the act by the Ameren Companies had no material impact to their financial statements.
Ameren’s financial statements are prepared on a consolidated basis and therefore include the accounts of its majority-owned subsidiaries. All intercompany transactions have been eliminated, except as disclosed in Note 8 – Related-party Transactions.eliminated. Ameren Missouri and Ameren Illinois have no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.
Our accounting policies conform to GAAP. Our financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in our opinion, for a fair statement of our results. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates. The results of operations of an interim period may not give a true indication of results that may be expected for a full year. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the Form 10-K.
Variable Interest Entities
As of September 30, 2020, Ameren and Ameren Missouri had interests in unconsolidated variable interest entities that were established to construct wind generation facilities and, ultimately, sell those constructed facilities to Ameren Missouri. Neither Ameren nor Ameren Missouri are the primary beneficiary of these variable interest entities because neither has the power to direct matters that most significantly affect the entities' activities, which include designing, financing, and constructing the wind generation facilities. As a result, these variable interest entities have not been consolidated. As of September 30, 2020, the maximum exposure to loss related to these variable interest entities was approximately $18 million, which primarily represents due diligence and legal costs incurred by Ameren Missouri associated with the acquisitions. The risk of a loss was assessed to be remote and, accordingly, Ameren and Ameren Missouri have not recognized a liability associated with any portion of the maximum exposure to loss. See Note 2 – Rate and Regulatory Matters for additional information on the agreements to acquire these wind generation facilities.
As of September 30, 2020,March 31, 2021, and December 31, 2019,2020, Ameren had unconsolidated variable interests as a limited partner in various equity method investments, totaling $34$41 million and $28$37 million, respectively, included in “Other assets” on Ameren’s consolidated balance sheet. Ameren is not the primary beneficiary of these investments because it does not have the power to direct matters that most significantly affect the activities of these variable interest entities. As of September 30, 2020,March 31, 2021, the maximum exposure to loss related to these variable interests is limited to the investment in these partnerships of $34$41 million plus associated outstanding funding commitments of $37$33 million.
Company-owned Life Insurance
Ameren and Ameren Illinois have company-owned life insurance, which is recorded at the net cash surrender value. The net cash surrender value is the amount that can be realized under the insurance policies at the balance sheet date. As of September 30, 2020,March 31, 2021, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $260$275 million (December 31, 20192020 – $264$272 million) and $114$117 million (December 31, 20192020 – $123$115 million), respectively, while total borrowings against the policies were $107 million (December 31, 20192020 – $114$107 million) at both Ameren and Ameren Illinois. Ameren and Ameren Illinois have the right to offset the borrowings against the cash surrender value of the policies and, consequently, present the net asset in “Other assets” on their respective balance sheets.
Accounting and Reporting Developments
See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of the Form 10-K for additional information about authoritative accounting guidance relating to defined benefit plan disclosures that will be effective for the Ameren Companies in the fourth quarter of 2020.
Measurement of Credit Losses on Financial Instruments
On January 1, 2020, the Ameren Companies adopted authoritative accounting guidance that requires credit losses on most financial assets carried at amortized cost and off-balance sheet credit exposures, such as financial guarantees or loan commitments, to be measured using a current expected credit loss (CECL) model. The guidance requires an entity to measure expected credit losses using relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In addition, the guidance made certain changes to the impairment model applicable to available-for-sale debt securities, such as requiring credit losses to be presented as an allowance rather than a write-down on impaired debt securities for which there is neither an intent nor a more-likely-than-not requirement to sell. Our adoption of this guidance did not have a material impact on the Ameren Companies’
financial statements and did not result in a cumulative effect adjustment to retained earnings as of the adoption date. See Note 13 – Supplemental Information for additional information regarding credit losses on accounts receivable.
NOTE 2 – RATE AND REGULATORY MATTERS
Below is a summary of updates to significant regulatory proceedings and related legal proceedings. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for additional information and a summary of our regulatory frameworks. We are unable to predict the ultimate outcome of these matters, the timing of the final decisions of the various agencies and courts, or the impact on our results of operations, financial position, or liquidity.
Missouri
March 2020 MoPSC2021 Electric Service Regulatory Rate OrderReview
In March 2020,2021, Ameren Missouri filed a request with the MoPSC issued an order in Ameren Missouri’s July 2019seeking approval to increase its annual revenues for electric service regulatoryby $299 million. The electric rate review, approving nonunanimous stipulationincrease request is based on a 9.9% ROE, a capital structure composed of 51.9% common equity, a rate base of $10.0 billion, and agreements. The order resulted in a decrease of $32 million to Ameren Missouri's annual revenue requirement for electric retail service, which reflects infrastructure investments as oftest year ended December 31, 2019. The order2020, with certain pro-forma adjustments expected through an anticipated true-up date of September 30, 2021. Ameren Missouri also provided forrequested the continued use of the FAC and trackers for pension and postretirement benefits, uncertain income tax positions, and certain excess deferred income taxes that the MoPSC previously authorized in earlier electric rate orders. The order reducedAdditionally, Ameren Missouri requested to recover certain estimated costs associated with the annualized base levelMeramec Energy Center, which is expected to be retired in 2022, over a five-year period. Ameren Missouri requested the use of net energya tracker for any variances between certain costs pursuant tocollected in customer rates associated with the FAC by approximately $115 million fromMeramec Energy Center and actual costs incurred after the base level establisheddate new rates become effective, which would be considered for recovery or refund in the MoPSC’s March 2017a future electric regulatory rate review. The electric rate order. The order also changedincrease request reflects the annualized regulatory asset and liability amortization amounts and the base level of expenses for regulatory tracking mechanisms. On an annualized basis, these changes reflect approximatelyfollowing:
•increased infrastructure investments made under Ameren Missouri’s Smart Energy Plan;
•$20 millionof increased revenues and approximate decreases in purchased power expenses of$15 million, other operating and maintenance expenses of$60 million, and income tax expenses of $20 million. Additionally, the annual revenue requirement incorporated increases of approximately $50 million for the reduction in sales volumes resulting from MEEIA programs and approximately $50 million of depreciation and amortization expense for amounts previously deferred under PISA. The increase in the annual revenue requirement related to the MEEIA programs is seasonally weighted to the summer. One of the stipulation and agreements approved by the MoPSC’s March 2020 order states that the net impact of the revenuetransition to a cleaner generation portfolio, including advancing the retirement dates of the Sioux and expenseRush Island energy centers consistent with Ameren Missouri’s 2020 IRP and 700 MWs of wind generation investment for the High Prairie and Atchison renewable energy centers, which are mitigated by reductions resulting from the request to recover certain Meramec Energy Center costs over a five-year period and the associated tracker;
•decreased weather-normalized customer sales volumes; and
•increased pension and other post-retirement benefits and tax amortization expenses, partially offset by decreased other operations and maintenance expenses.
The MoPSC proceeding relating to the proposed electric service rate changes noted above reflectswill take place over a 9.4%period of up to 9.8% ROE on an unspecified percent11 months, with a decision by the MoPSC expected by February 2022 and new rates effective by March 2022. Ameren Missouri cannot predict the level of common equity applicable toany electric service rate base. In addition,change the order requiredMoPSC may approve, whether the requested regulatory recovery mechanisms will be approved, or whether
any rate change that may eventually be approved will be sufficient for Ameren Missouri to donate $8 million to low-income assistance programs, which was reflected in results of operations inrecover its costs and earn a reasonable return on its investments when the first quarter of 2020.The new rates, base level of expenses, and amortizations became effective on April 1, 2020. In April 2020, the MoPSC issued another order in Ameren Missouri’s July 2019 electric service regulatory rate review, reaffirming the existing percentage of net energy cost variances allowed to be recovered or refunded under the FAC.change goes into effect.
Wind Generation FacilitiesFacility
In 2019,January 2021, Ameren Missouri entered into a build-transfer agreement to acquire, after construction,acquired an up-to 300-megawatt300-MW wind generation facility. In 2018,project located in northwestern Missouri and partially placed it in service as the Atchison Renewable Energy Center. As of the date of this filing, Ameren Missouri entered intohas placed approximately half of the project in service, representing a build-transfer agreementpurchase price of approximately $250 million, including an immaterial amount of transaction costs. Ameren Missouri expects the remaining MWs of the project to acquire, after construction, an up-to400-megawatt wind generation facility. These two agreements are subject to customary contract terms and conditions.be in service by the end of September 2021. The two build-transfer acquisitions collectively represent $1.2 billion of capital expenditures and wouldAtchison Renewable Energy Center will support Ameren Missouri’s compliance with the Missouri renewable energy standard. Both acquisitions have received all regulatory approvals, and both projects have received all applicable zoning approvals, have entered into RTO interconnection agreements, and are under construction.
2021 Natural Gas Delivery Service Regulatory Rate Review
In March 2021, Ameren Missouri filed a request with the MoPSC seeking approval to increase its annual revenues for natural gas delivery service by $9 million. The natural gas rate increase request is based on a 9.8% ROE, a capital structure composed of 51.9% common equity, a rate base of $310 million, and a test year ended December 31, 2020, with certain pro-forma adjustments expected through an anticipated true-up date of September 30, 2021. The request includes the developerscontinued use of the wind generation facilities received notices fromPGA, ISRS, and DCA and trackers for pension and other postretirement benefits and certain excess deferred taxes that the wind turbine supplier to each facility, and the developer of the up-to 300-megawatt project received a notice from the construction contractor, of changesMoPSC previously authorized in supply and/or construction activities resulting from the COVID-19 pandemic. There have been changesearlier natural gas rate orders.
The MoPSC proceeding relating to the schedules for both projects, particularlyproposed natural gas delivery service rate changes will take place over a period of up to 11 months, with regard to wind turbine deliveries. Duringa decision by the third quarter of 2020, all remaining wind turbine deliveries for the up-to 400-megawatt project were completed. Based on the construction schedule,MoPSC expected by February 2022 and new rates effective by March 2022. Ameren Missouri expects this project tocannot predict the level of any natural gas delivery service rate change the MoPSC may approve, or whether any rate change that may eventually be placed in-service by the end of 2020. At this time, due to manufacturing, shipping, and other supply chain issues in 2020, and, based on an updated construction schedule from the developer,approved will be sufficient for Ameren Missouri expectsto recover its costs and earn a reasonable return on its investments when the up-to 300-megawatt project to be partially placed in-service by the end of 2020, and the remaining portion of the project, representing approximately $200 million of investment, to be placed in-service in the first quarter of 2021. Ameren Missouri and the developer of the up-to 300-megawatt project continue to monitor the impact to this project's schedule. In May 2020, the IRS issued guidance that extended the in-service date criteria to December 31, 2021, for qualifying for federal production tax credits. As a result of this extension, Ameren does not anticipate that delays in the completion of the wind generation facilities will affect Ameren’s ability to realize anticipated federal production tax credits.rate change goes into effect.
MEEIA
In August 2020, the MoPSC issued an order approving a unanimous stipulation and agreement with respect to the 2022 program year of Ameren Missouri’s six-year MEEIA 2019 program. The order established performance incentives that would provide Ameren Missouri an opportunity to earn additional revenues, including $11 million if Ameren Missouri achieves certain energy-efficiency goals during the 2022
program year and an additional $1 million if Ameren Missouri exceeds its targeted energy-efficiency goals. Ameren Missouri intends to invest $70 million in energy-efficiency programs during the 2022 program year. The August 2020 order also approved Ameren Missouri’s energy savings results for the first year of the MEEIA 2019 program. As a result of this order and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $6 million in the third quarter of 2020. As a result of MoPSC orders issued in September 2017, October 2018, January 2019, and September 2019 related to performance incentives for the MEEIA 2013 and MEEIA 2016 programs, and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $38 million during the first nine months of 2019.
Requests for Accounting Authority Orders Related to COVID-19 Pandemic Costs
Ameren Missouri suspended disconnections for customer nonpayment and charging late fees in mid-March 2020, and resumed those activities for commercial and industrial customers in mid-July 2020 and residential customers in early August 2020. In October 2020, Ameren Missouri filed requests withMarch 2021, the MoPSC for accounting authorityissued orders approving nonunanimous stipulation and agreements related to itsAmeren Missouri’s electric and natural gas services.service accounting authority order requests. The orders would allowallowed Ameren Missouri to accumulate $9 million of certain costs incurred related to the COVID-19 pandemic, andnet of cost savings, as well as forgone customer late fee and reconnection fee revenues from March 2020 to JuneMarch 2021, for potential recovery in futurethe electric and natural gas service regulatory rate reviews. These costs would be netreviews discussed above. As of any cost savingsMarch 31, 2021, Ameren Missouri realizesdeferred other operations and maintenance expenses of $5 million as a result ofregulatory asset related to the COVID-19 pandemic. The orders would also allowaccounting authority orders. If approved for recovery, Ameren Missouri to accumulate bad debt write-offs incurred from March 2020 to September 2021 due towould recognize the COVID-19 pandemic, for potential recovery in future electric and natural gas service regulatory rate reviews. The requests include an estimated $9remaining $4 million of costs incurred, net of savings, andassociated with forgone customer late fee revenues relatedand reconnection fee revenue when billed to the COVID-19 pandemic from March 2020 through September 2020. The requests did not seek accumulation for potential recovery of forgone revenues associated with decreased sales volumes related to the COVID-19 pandemic. The MoPSC is under no deadline to issue orders, and Ameren Missouri cannot predict the ultimate outcome of these regulatory proceedings.customers.
Illinois
Electric Distribution Service Rates
In April 2020,2021, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC, requesting a reductionan increase of $45$64 million in its rates. This update reflects a decreasean increase to the annual performance-based formula rate based on 20192020 actual costs, a decreasean increase to include the 20192020 revenue requirement reconciliation adjustment, and a decreasean increase for the conclusion of the 20182019 revenue requirement reconciliation adjustment, which will be fully collected fromrefunded to customers in 2020,2021, consistent with the ICC’s December 20192020 annual update filing order. It also reflects an increase based on expected net plant additions for 2020. In September 2020, the ICC staff submitted its revised calculation of the revenue requirement included in Ameren Illinois’ update filing, recommending a $49 million decrease in Ameren Illinois’ electric distribution service rates.2021. An ICC decision in this proceeding is expected by December 2020,2021, with new rates effective January 2021.2022.
Electric Customer Energy-Efficiency InvestmentsDistribution Service Rate Reconciliation Tariff
In May 2020,March 2021, the ICC issued an order approving Ameren Illinois’ requested tariff to reconcile its electric distribution service revenue requirement for a period of up to two years after the final customer rate update under performance-based formula ratemaking. To utilize the reconciliation, the ICC-approved tariff requires Ameren Illinois to file a traditional regulatory rate review for its electric distribution service, which may be based on a future test year, by the end of March in the year following the last year in which an annual performance-based formula rate update was permitted. Pursuant to this order, and without legislative change or Ameren Illinois’ election to no longer use performance-based formula ratemaking, Ameren Illinois’ 2022 and 2023 revenues would reflect each year’s actual costs, year-end rate base, and 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 revenue requirement adjustment will be collected from, or refunded to, customers within two years from the end of the reconciled year.
Electric Energy Efficiency Plan
In March 2021, Ameren Illinois filed its annual electric customer energy-efficiency formula rate update to increase its rates by $7 million with the ICC. In August 2020, the ICC staff submitted a calculation of the revenue requirement included in Ameren Illinois’ filing, recommending an amount comparable to that included in Ameren Illinois’ filing. An ICC decision in this proceeding is expected by December 2020, with new rates effective January 2021.
2020 Natural Gas Delivery Service Regulatory Rate Review
In February 2020, Ameren Illinois filed a request with the ICC seeking approval to increase its annual revenues for natural gas delivery service. In September 2020, Ameren Illinois filed a revised request seeking to increase its annual revenues for natural gas delivery service by $97 million,an energy-efficiency plan which includes an estimated $46annual investments in electric energy-efficiency programs up to approximately $100 million per year from 2022 through 2025. The ICC has the ability to reduce the amount of annual revenues that would otherwise be recovered underelectric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the QIPinvestments in electric energy-efficiency programs. The electric energy-efficiency program investments and other riders. The request is basedthe return on those investments are collected from customers through a 10.5% ROE, a capital structure composed of 54.1% common equity,rider and a rate base of $2.1 billion. Ameren Illinois used a 2021 future test yearare not included in this proceeding. In October 2020, the ICC staff recommended an increase to annual revenues for natural gas deliveryelectric distribution service of $69 million, based on a 9.3% ROE, a capital structure composed of 50.4% common equity, and a rate base of $2.1 billion.performance-based formula ratemaking framework. A decision by the ICC in this proceeding is requiredexpected by January 2021, with new rates expected to be effective in FebruarySeptember 2021. Ameren Illinois cannot predict the level of any delivery service rate change the ICC may approve, nor whether any rate change that may eventually be approved will be sufficient to enable Ameren Illinois to earn a reasonable return on investments when the rate changes go into effect.
QIP Reconciliation HearingOrder
In March 2019, Ameren Illinois filed its annual request with2021, the ICC issued an order approving Ameren Illinois’ QIP reconciliation for a reconciliation hearing to determine the accuracy and prudence of2018. The ICC also found that Ameren Illinois’ natural gas capital investments recovered under the QIP rider during 2018. In November 2019,2018 were accurate and prudent. The ICC order effectively dismissed the Illinois Attorney General's office challenged the recovery ofGeneral’s challenge with respect to 2018 capital investments, among other things, that were made during 2018, alleging that the amount of investments is excessive based on a comparison to historical investment levels. The Illinois Attorney General's office is not alleging project imprudence or that the investments do not qualify for recovery. In March 2020, the ICC staff filed testimony that supports the prudence and reasonableness
of the capital investments made during 2018. Ameren Illinois’ 2018 QIP rate recovery request under review by the ICC is within the rate increase limitations allowed by law. The ICC is under no deadline to issue an order in this proceeding.investments.
Service Disconnection Moratorium Proceeding
InFrom March 2020 through March 2021, the ICC issued an order requiring all Illinois electric distribution and natural gas utilities to suspend disconnectionslimited disconnection activities and late fees for customer nonpayment to varying degrees based on customer class. In March 2021, the ICC issued an interim basis, effective March 18, 2020. Pursuant to an ICC order issued in June 2020 and a voluntary extension of the suspension of residential disconnections,allowing Ameren Illinois resumedto resume disconnection activities for commercial and industrial customers for nonpayment in early August 2020 andall residential customers in mid-September 2020, with the exception of residential customers classified as low income, expressingthrough a financial hardship, or relying on medical equipment. Disconnections for nonpayment for these residential customers are expected to beginphased-in approach, which began in April 2021 which is afterfor customers with the annual winter moratorium period on disconnections from December 1, 2020 tolargest past due balances and will resume by June 2021 for all remaining residential customers. The March 31, 2021.2021 order also requires Ameren Illinois also resumed charging late feesto offer deferred payment arrangements, extending to 18 months, to all residential customers in late July 2020. Thethrough June 20202021. In addition, the order requires Ameren Illinois to implement more flexible credit and collection practices, on a temporary basis, including longer deferred payment arrangements, extending to 24 months in certain cases, and programs to provideextend the financial assistance to customers. In addition, theprogram established by a June 2020 ICC order allowsthrough 2021. Ameren Illinois is allowed to recover up to $8$4 million in costs incurred during 2021 related to thethis financial assistance programs.program. These costs will be deferred as regulatory assets and the portion associated with Ameren Illinois’ electric distribution business will be recovered through its bad debt rider and the portion associated with its natural gas distribution business will be recovered through a special purpose rider established by the order. The order also allows Ameren Illinois to recover forgone customer late fees and costs incurred related to the COVID-19 pandemic. The portion of these forgone late fees and costs associated with Ameren Illinois’ electric distribution business will be recovered through formula rates and the portion associated with its natural gas distribution business will be recovered through the special purpose rider. In addition, the order allows Ameren Illinois’ electric distribution business to recover bad debt expense, instead of write-offs net of subsequent recoveries, through its bad debt rider until the end of 2020.
Federal
Transmission Formula Rate Revisions
In February 2020, the MISO, on behalf of Ameren Missouri, Ameren Illinois, and ATXI, filed requests with the FERC to revise each company’s transmission formula rate calculations with respect to the calculation inputsused for materials and supplies.supplies inventories included in rate base. In May 2020, the FERC issued orders approving the revisions prospectively. In addition, the FERC declined to order refunds for earlier periods, as requested by intervenors in Ameren Illinois’ filing, but directed its audit staff to review historical rate recovery in connection with an ongoing FERC audit. This review could lead the FERC to ultimately require refunds for periods prior to 2019. In June 2020, Ameren Missouri, Ameren Illinois, and ATXI filed requests for rehearing arguing, among other things, the revisions should be applied retrospectively to include the period January 1, 2019, to June 1, 2020, and that the FERC should not require refunds for periods prior to 2019. In July 2020, the FERC denied the rehearing requests without addressing the issues raised. In July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the July 2020 rehearing denials to the United States Court of Appeals for the District of Columbia Circuit, which is under no deadline to address the appeal. In October 2020, the FERC issued an order reaffirming its May 2020 order and denying the arguments raised in the rehearing requests filed by Ameren Missouri, Ameren Illinois, and ATXI. Pursuant to the May 2020 order, in the second quarter of 2020, Ameren and Ameren Illinois recorded a $2 million reduction to revenue for the period of January 2019 through May 2020. Regardless of the outcome of the appeal, the impacts of the May 2020 and October 2020 orders are not expected to be material to Ameren’s, Ameren Missouri’s, or Ameren Illinois’ results of operations, financial position, or liquidity.
In March 2021, the FERC issued an order related to an intervenor challenge to Ameren Illinois’ 2020 transmission formula rate update. As a result of this order, in March 2021, Ameren Illinois recorded a regulatory liability of $9 million, largely as a reduction of electric operating revenues, to reflect expected refunds, including interest, primarily related to the historical rate recovery of materials and supplies inventories included in rate base. In April 2021, Ameren Illinois filed a request for rehearing with the FERC regarding its March 2021 order.
FERC Complaint Cases
In November 2013, a customer group filed a complaint case with the FERC seeking a reduction in the allowed base ROE for FERC-regulated transmission rate base under the MISO tariff from 12.38% to 9.15%. In September 2016, the FERC issued an order in the November 2013 complaint case, which lowered the allowed base ROE to 10.32%, or a 10.82% total allowed ROE with the inclusion of a 50 basis point incentive adder for participation in an RTO, that was effective from late September 2016 forward. The September 2016 order also required refunds for the period November 2013 to February 2015, which were paid in 2017. With the maximum FERC-allowed refund period for the November 2013 complaint case ending in February 2015, another customer complaint case was filed in February 2015, seeking a further reduction in the allowed base ROE for the period of February 2015 to May 2016. In November 2019, the FERC issued an order addressing the November 2013 complaint case, which set the allowed base ROE at 9.88%, superseding the 10.32% previously ordered, and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The order also dismissed the February 2015 complaint case. In December 2019, the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI, filed requests for rehearing with the FERC. Additionally, in December 2019, various parties filed requests for rehearing with the FERC, challenging the dismissal of the February 2015 complaint case. In May 2020, the FERC issued an order addressing the requests for rehearing, which set the allowed base ROE at 10.02%, superseding the 9.88%
previously ordered, and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The May 2020 order also denied rehearing of the FERC's dismissal of the February 2015 complaint case. In June 2020, various parties filed requests for rehearing with the FERC, challenging the new
ROE methodology established by the May 2020 order. In July 2020, the FERC denied the rehearing requests without addressing the issues raised, and indicated it will address the requests for rehearing in a future order. Also in July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the May 2020 order to the United States Court of Appeals for the District of Columbia Circuit challenging the refunds required for the period from September 2016 to May 2020. The court is under no deadline to address the appeal.
As a result of the May 2020 order, which increased the FERC-allowed base ROE from 9.88% to 10.02% for the periods November 2013 to February 2015 and late September 2016 forward, Ameren and Ameren Illinois recognized income of $13 million and $7 million, respectively, during the second quarter of 2020. As of September 30, 2020,March 31, 2021, Ameren and Ameren Illinois had recorded current regulatory liabilities of $15$17 million and $7$9 million, respectively, to reflect the expected refunds, including interest, associated with the allowed base ROE set by the May 2020 order in the November 2013 complaint case. The increase in the FERC-allowed base ROE resulting from the May 2020 order is not material to Ameren Missouri’s results of operations, financial position, or liquidity.
In March 2019, the FERC issued separate Notices of Inquiry regarding its allowed base ROE policy and its transmission incentives policy. The Notice of Inquiry addressing the FERC’s base ROE policy, among other things, broadened the ability to comment on the new methodology beyond electric utilities that are participants in the complaint cases. The transmission incentives Notice of Inquiry was open for comment on the FERC’s transmission incentive policy, including incentive adders to the base ROE. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which addressed many of the issues in the Notice of Inquiry on transmission incentives. The Notice of Proposed Rulemaking included an increased incentive in the allowed base ROE for participation in an RTO to 100 basis points from the current 50 basis points and revised the parameters for awarding incentives, while limiting the overall incentives to a cap of 250 basis points, among other things. Initial comments were due by July 2020. While the FERC has not formally terminated the Notice of Inquiry regarding its transmission incentives policy, Ameren does not expect further actions relating to it. Ameren is unable to predict the ultimate impact of the Notice of Inquiry regarding its allowed base ROE policy or the Notice of Proposed Rulemaking at this time.
NOTE 3 – SHORT-TERM DEBT AND LIQUIDITY
The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, in the Form 10-K for a description of our indebtedness provisions and other covenants as well as a description of money pool arrangements.
Short-Term Borrowings
The Missouri Credit Agreement and the Illinois Credit Agreement are available to support issuances under Ameren (parent)’s, Ameren Missouri’s, and Ameren Illinois’ commercial paper programs, respectively, subject to borrowing sublimits, and the issuance of letters of credit. As of September 30, 2020,March 31, 2021, based on commercial paper outstanding and letters of credit issued under the Credit Agreements, along with cash and cash equivalents, the net liquidity available to Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, was $2.0$1.4 billion. The Ameren Companies were in compliance with the covenants in their Credit Agreements as of September 30, 2020.March 31, 2021. As of September 30, 2020,March 31, 2021, the ratios of consolidated indebtedness to consolidated total capitalization, calculated in accordance with the provisions of the Credit Agreements, were 55%57%, 48%49%, and 45%46% for Ameren, Ameren Missouri, and Ameren Illinois, respectively.
The following table presents commercial paper outstanding, net of issuance discounts, as of September 30, 2020,March 31, 2021, and December 31, 2019.2020. There were no borrowings outstanding under the Credit Agreements as of September 30, 2020,March 31, 2021, or December 31, 2019.2020.
| | | | | | | | | | | | | | |
| September 30, 2020 | | | December 31, 2019 |
| Ameren (parent) | $ | 30 | | | | $ | 153 | |
| Ameren Missouri | 0 | | | | 234 | |
| Ameren Illinois | 242 | | | | 53 | |
| Ameren consolidated | $ | 272 | | | | $ | 440 | |
| | | | | | | | | | | | | | |
| March 31, 2021 | | | December 31, 2020 |
| Ameren (parent) | $ | 362 | | | | $ | 490 | |
| Ameren Missouri | 204 | | | | 0 | |
| Ameren Illinois | 323 | | | | 0 | |
| Ameren consolidated | $ | 889 | | | | $ | 490 | |
The following table summarizes the activity and relevant interest rates for Ameren (parent)’s, Ameren Missouri’s, and Ameren Illinois’ commercial paper issuances and borrowings under the Credit Agreements in the aggregate for the ninethree months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Ameren
(parent) | | Ameren
Missouri | | Ameren
Illinois | | Ameren
Consolidated | | | Ameren
(parent) | | Ameren
Missouri | | Ameren
Illinois | | Ameren
Consolidated | |
| 2021 | | 2021 | |
| Average daily amount outstanding | | Average daily amount outstanding | | $ | 454 | | | $ | 99 | | | $ | 96 | | | $ | 649 | | |
| | Weighted-average interest rate | | Weighted-average interest rate | | 0.25 | % | | 0.22 | % | | 0.21 | % | | 0.24 | % | |
Peak amount outstanding during period(a) | | Peak amount outstanding during period(a) | | $ | 650 | | | $ | 206 | | | $ | 353 | | | $ | 916 | | |
| Peak interest rate | | Peak interest rate | | 0.33 | % | | 0.25 | % | | 0.25 | % | | 0.33 | % | |
| 2020 | 2020 | | 2020 | |
| Average daily amount outstanding | Average daily amount outstanding | | $ | 62 | | | $ | 142 | | | $ | 53 | | | $ | 257 | | | Average daily amount outstanding | | $ | 157 | | | $ | 395 | | | $ | 76 | | | $ | 628 | | |
| | Weighted-average interest rate | Weighted-average interest rate | | 2.04 | % | | 1.76 | % | | 1.10 | % | | 1.70 | % | | Weighted-average interest rate | | 1.94 | % | | 1.86 | % | | 1.99 | % | | 1.89 | % | |
Peak amount outstanding during period(a) | Peak amount outstanding during period(a) | | $ | 425 | | | $ | 573 | | | $ | 243 | | | $ | 908 | | | Peak amount outstanding during period(a) | | $ | 425 | | | $ | 573 | | | $ | 150 | | | $ | 908 | | |
| Peak interest rate | Peak interest rate | | 3.30 | % | | 5.05 | % | (b) | 3.40 | % | | 5.05 | % | (b) | Peak interest rate | | 3.30 | % | | 5.05 | % | (b) | 3.40 | % | | 5.05 | % | (b) |
| 2019 | | |
| Average daily amount outstanding | | $ | 532 | | | $ | 141 | | | $ | 147 | | | $ | 821 | | | |
| | Weighted-average interest rate | | 2.70 | % | | 2.73 | % | | 2.58 | % | | 2.68 | % | | |
Peak amount outstanding during period(a) | | $ | 651 | | | $ | 549 | | | $ | 310 | | | $ | 1,113 | | | |
| Peak interest rate | | 3.80 | % | | 2.97 | % | | 5.00 | % | (c) | 5.00 | % | (c) | |
(a)The timing of peak outstanding commercial paper issuances and borrowings under the Credit Agreements varies by company. Therefore, the sum of individual company peak amounts may not equal the Ameren consolidated peak for the period.
(b)Ameren’s and Ameren Missouri’s peak interest rate was affected by temporary disruptions in the commercial paper market in the first quarter of 2020.
(c)
Ameren’s and Ameren Illinois’ peak interest rate was affected by temporary disruptions in the commercial paper market in the third quarter of 2019.
Money Pools
Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements. The average interest rate for borrowings under the utility money pool for the three and nine months ended September 30, 2020,March 31, 2021, was 0.10% and 0.81%, respectively (20190.22% (2020 – 2.40% and 2.67%, respectively)1.93%). See Note 8 – Related-party Transactions for the amount of interest income and expense from the utility money pool arrangements recorded by Ameren Missouri and Ameren Illinois for the three and nine months ended September 30, 2020March 31, 2021 and 2019.2020.
NOTE 4 – LONG-TERM DEBT AND EQUITY FINANCINGS
Ameren
For the three and nine months ended September 30, 2020,March 31, 2021, Ameren issued a total of 0.1 million and 0.5 million shares of common stock respectively, under its DRPlus and 401(k) plan, and received proceeds of $10 million and $37 million, respectively.$12 million. In addition, in the first quarter of 2020,2021, Ameren issued 0.5 million shares of common stock valued at $38$33 million upon the vesting of stock-based compensation.
In August 2019,February 2021, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million sharessettled the remainder of common stock.The forward sale agreement will be physically settled unless Ameren elects to settle in cash or to net share settle. At September 30, 2020, Ameren could have settled the forward sale agreement with physical delivery of 7.5by physically delivering 1.6 million shares of common stock to the counterparty in exchange for $543cash proceeds of $113 million. The forward sale agreement could also have been settled at September 30, 2020, with deliveryproceeds were used to fund a portion of approximately $54 million or 0.7 million shares of common stock to the counterparty, if Ameren had elected to net cash or net share settle, respectively. ForMissouri’s wind generation investments. See Note 2 - Rate and Regulatory Matters for additional information about the forward sale agreement, see Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, in the Form 10-K.wind generation investments.
In April 2020,March 2021, Ameren (parent) issued $800$450 million of 3.50%1.75% senior unsecured notes due January 2031, with interest payable semiannually on January 15 and July 15 of each year, beginning July 15, 2020. Ameren received net proceeds of $793 million, which were used for general corporate purposes, including to repay outstanding short-term debt, and were used to fund the repayment of Ameren’s $350 million of 2.70% senior unsecured notes, which were redeemed at par plus accrued interest in October 2020.
In October 2020, Ameren, Ameren Missouri, and Ameren Illinois filed a Form S-3 shelf registration statement with the SEC, registering the issuance of an unspecified amount of certain types of securities. This registration statement became effective immediately upon filing and expires in October 2023.
Ameren Missouri
In March 2020, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due March 2030,2028, with interest payable semiannually on March 15 and September 15 of each year, beginning September 15, 2020.2021. Ameren Missouri received net proceeds of $462$447 million, which were used to repay outstanding short-term debt,for general corporate purposes, including short-term debt that Ameren Missouri incurred in connection with the repayment of $85 million of its 5.00% senior secured notes that matured in February 2020.short-term debt.
In October 2020, Ameren Missouri issued $550 million of 2.625% first mortgage bonds due March 2051, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2021. The bonds were issued as green bonds; therefore, the proceeds will be used for eligible green projects.
Ameren Missouri received net proceeds of $543 million, which are expected to be used to partially finance the acquisition of 2 wind generation facilities. See Note 2 – Rate and Regulatory Matters for information about the wind generation facilities.
Ameren Illinois
Ameren Illinois received cash capital contributions totaling $350$113 million from Ameren (parent) during the ninethree months ended September 30, 2020.March 31, 2021.
Ameren Illinois
In March 2021, Ameren Illinois redeemed its 6.625% and 7.75% series preferred stock at par for $12 million and $1 million, respectively. The preferred stock of Ameren Illinois is reflected in “Noncontrolling Interests” on Ameren’s consolidated balance sheet.
Ameren Illinois received capital contributions totaling $40 million from Ameren (parent) during the three months ended March 31, 2021.
Indenture Provisions and Other Covenants
See Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, in the Form 10-K for a description of our indenture provisions and other covenants, as well as restrictions on the payment of dividends. At September 30, 2020,March 31, 2021, the Ameren Companies were in compliance with the provisions and covenants contained in their indentures and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement.
Off-balance-sheet Arrangements
At September 30, 2020,March 31, 2021, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than the forward sale agreement relating to common stock and variable interest entities. See Note 1 – Summary of Significant Accounting Policies for further detail concerning variable interest entities.
NOTE 5 – OTHER INCOME, NET
The following table presents the components of “Other Income, Net” in the Ameren Companies’ statements of income for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | Nine Months | | | | Three Months | |
| | 2020 | | 2019 | | 2020 | | 2019 | | | | 2021 | | 2020 | |
| Ameren: | Ameren: | | Ameren: | | |
| | Allowance for equity funds used during construction | Allowance for equity funds used during construction | $ | 12 | | | $ | 7 | | | $ | 25 | | | $ | 20 | | | Allowance for equity funds used during construction | | $ | 7 | | | $ | 4 | | |
| Interest income on industrial development revenue bonds | Interest income on industrial development revenue bonds | 7 | | | 6 | | | 19 | | | 19 | | | Interest income on industrial development revenue bonds | | 6 | | | 6 | | |
| Other interest income | Other interest income | 0 | | | 2 | | | 2 | | | 6 | | | Other interest income | | 1 | | | 1 | | |
| Non-service cost components of net periodic benefit income(a) | Non-service cost components of net periodic benefit income(a) | 32 | | | 23 | | | 85 | | | 67 | | | Non-service cost components of net periodic benefit income(a) | | 34 | | | 23 | | |
| Miscellaneous income | Miscellaneous income | 1 | | | 2 | | | 10 | | | 6 | | | Miscellaneous income | | 4 | | | 2 | | |
| Donations | Donations | 0 | | | (1) | | | (14) | | (b) | (8) | | | Donations | | (3) | | | (13) | | (b) |
| Miscellaneous expense | Miscellaneous expense | (4) | | | (5) | | | (10) | | | (11) | | | Miscellaneous expense | | (3) | | | (2) | | |
| Total Other Income, Net | Total Other Income, Net | $ | 48 | | | $ | 34 | | | $ | 117 | | | $ | 99 | | | Total Other Income, Net | | $ | 46 | | | $ | 21 | | |
| Ameren Missouri: | Ameren Missouri: | | Ameren Missouri: | | |
| | Allowance for equity funds used during construction | Allowance for equity funds used during construction | $ | 7 | | | $ | 6 | | | $ | 15 | | | $ | 14 | | | Allowance for equity funds used during construction | | $ | 4 | | | $ | 2 | | |
| Interest income on industrial development revenue bonds | Interest income on industrial development revenue bonds | 7 | | | 6 | | | 19 | | | 19 | | | Interest income on industrial development revenue bonds | | 6 | | | 6 | | |
| Non-service cost components of net periodic benefit income(a) | Non-service cost components of net periodic benefit income(a) | 13 | | | 4 | | | 32 | | | 13 | | | Non-service cost components of net periodic benefit income(a) | | 14 | | | 5 | | |
| Miscellaneous income | Miscellaneous income | 1 | | | 2 | | | 3 | | | 4 | | | Miscellaneous income | | 1 | | | 1 | | |
| Donations | Donations | 0 | | | (1) | | | (9) | | (b) | (3) | | | Donations | | 0 | | | (8) | | (b) |
| Miscellaneous expense | Miscellaneous expense | (2) | | | (2) | | | (5) | | | (4) | | | Miscellaneous expense | | (2) | | | (2) | | |
| Total Other Income, Net | Total Other Income, Net | $ | 26 | | | $ | 15 | | | $ | 55 | | | $ | 43 | | | Total Other Income, Net | | $ | 23 | | | $ | 4 | | |
| Ameren Illinois: | Ameren Illinois: | | Ameren Illinois: | | |
| | Allowance for equity funds used during construction | Allowance for equity funds used during construction | $ | 5 | | | $ | 1 | | | $ | 10 | | | $ | 6 | | | Allowance for equity funds used during construction | | $ | 3 | | | $ | 2 | | |
| Interest income | Interest income | 0 | | | 1 | | | 2 | | | 5 | | | Interest income | | 1 | | | 1 | | |
| | Non-service cost components of net periodic benefit income | Non-service cost components of net periodic benefit income | 12 | | | 12 | | | 36 | | | 36 | | | Non-service cost components of net periodic benefit income | | 14 | | | 13 | | |
| Miscellaneous income | Miscellaneous income | 1 | | | 1 | | | 6 | | | 3 | | | Miscellaneous income | | 0 | | | 1 | | |
| Donations | Donations | 0 | | | 0 | | | (5) | | | (5) | | | Donations | | (3) | | | (4) | | |
| Miscellaneous expense | Miscellaneous expense | (1) | | | (2) | | | (4) | | | (6) | | | Miscellaneous expense | | (1) | | | (2) | | |
| Total Other Income, Net | Total Other Income, Net | $ | 17 | | | $ | 13 | | | $ | 45 | | | $ | 39 | | | Total Other Income, Net | | $ | 14 | | | $ | 11 | | |
(a)For the three and nine months ended September 30,March 31, 2021 and 2020, the non-service cost components of net periodic benefit income were adjusted by amounts deferred of $(3)less than $(1) million and less than $(1)$6 million, respectively, due to a regulatory tracking mechanism for the difference between the level of such costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates. The deferral was $7 million and $22 million for three and nine months ended September 30, 2019, respectively.
(b)Includes $8 million pursuant to Ameren Missouri’s March 2020 electric rate order. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, in the Form 10-K for additional information.
NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS
We use derivatives to manage the risk of changes in market prices for natural gas power and uranium,power, as well as the risk of changes in rail transportation surcharges through fuel oil hedges. Such price fluctuations may cause the following:
•an unrealized appreciation or depreciation of our contracted commitments to purchase or sell when purchase or sale prices under the commitments are compared with current commodity prices;
•market values of natural gas and uranium inventories that differ from the cost of those commodities in inventory;
•actual cash outlays for the purchase of these commodities that differ from anticipated cash outlays; and
•actual off-system sales revenues that differ from anticipated revenues
The derivatives that we use to hedge these risks are governed by our risk management policies for forward contracts, futures, options, and swaps. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The goal of the hedging program is generally to mitigate financial risks while ensuring that sufficient volumes are available to meet our requirements. Contracts we enter into as part of our risk management program may be settled financially, settled by physical delivery, or net settled with the counterparty.
All contracts considered to be derivative instruments are required to be recorded on the balance sheet at their fair values, unless the NPNS exception applies. Many of our physical contracts, such as our purchased power contracts, qualify for the NPNS exception to derivative accounting rules. The revenue or expense on NPNS contracts is recognized at the contract price upon physical delivery. The following disclosures exclude NPNS contracts and other non-derivative commodity contracts that are accounted for under the accrual method of accounting.
If we determine that a contract meets the definition of a derivative and is not eligible for the NPNS exception, we review the contract to determine whether the resulting gains or losses qualify for regulatory deferral. Derivative contracts that qualify for regulatory deferral are recorded at fair value, with changes in fair value recorded as regulatory assets or liabilities in the period in which the change occurs. We believe derivative losses and gains deferred as regulatory assets and liabilities are probable of recovery, or refund, through future rates charged to customers. Regulatory assets and liabilities are amortized to operating income as related losses and gains are reflected in rates charged to customers. Therefore, gains and losses on these derivatives have no effect on operating income. As of September 30, 2020,March 31, 2021, and December 31, 2019,2020, all contracts that met the definition of a derivative and were not eligible for the NPNS exception received regulatory deferral. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.
The following table presents open gross commodity contract volumes by commodity type for derivative assets and liabilities as of September 30, 2020,March 31, 2021, and December 31, 2019.2020. As of September 30, 2020,March 31, 2021, these contracts extended through October 2023, October 2025,2026, and May 2032 and March 2023 for fuel oils, natural gas power and uranium,power, respectively.
| | | | | | | | | | | | | | | | | | | | |
| Quantity (in millions, except as indicated) |
| September 30, 2020 | December 31, 2019 |
| Commodity | Ameren Missouri | Ameren Illinois | Ameren | Ameren Missouri | Ameren Illinois | Ameren |
| Fuel oils (in gallons) | 44 | | 0 | | 44 | | 58 | | 0 | | 58 | |
| Natural gas (in mmbtu) | 32 | | 123 | | 155 | | 20 | | 136 | | 156 | |
| Power (in megawatthours) | 6 | | 7 | | 13 | | 5 | | 7 | | 12 | |
| Uranium (pounds in thousands) | 365 | | 0 | | 365 | | 565 | | 0 | | 565 | |
| | | | | | | | | | | | | | | | | | | | |
| Quantity (in millions, except as indicated) |
| March 31, 2021 | December 31, 2020 |
| Commodity | Ameren Missouri | Ameren Illinois | Ameren | Ameren Missouri | Ameren Illinois | Ameren |
| Fuel oils (in gallons) | 36 | | 0 | | 36 | | 43 | | 0 | | 43 | |
| Natural gas (in mmbtu) | 34 | | 114 | | 148 | | 33 | | 114 | | 147 | |
| Power (in MWhs) | 7 | | 7 | | 14 | | 6 | | 7 | | 13 | |
| | | | | | |
The following table presents the carrying value and balance sheet location of all derivative commodity contracts, none of which were designated as hedging instruments, as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | | | September 30, 2020 | December 31, 2019 | | | | March 31, 2021 | December 31, 2020 |
| | Balance Sheet Location | | | Ameren
Missouri | | Ameren
Illinois | | Ameren | | | | Ameren
Missouri | | Ameren
Illinois | | Ameren | | Balance Sheet Location | | | Ameren
Missouri | | Ameren
Illinois | | Ameren | | | | Ameren
Missouri | | Ameren
Illinois | | Ameren |
| | | | | Fuel oils | Fuel oils | Other current assets | | $ | 2 | | | $ | 0 | | | $ | 2 | | | | $ | 4 | | | $ | 0 | | | $ | 4 | | Fuel oils | Other current assets | | $ | 2 | | | $ | 0 | | | $ | 2 | | | | $ | 2 | | | $ | 0 | | | $ | 2 | |
| | Other assets | | | 0 | | | 0 | | | 0 | | | | | 2 | | | 0 | | | 2 | | | Other assets | | | 3 | | | 0 | | | 3 | | | | | 0 | | | 0 | | | 0 | |
| | Natural gas | Natural gas | Other current assets | | | 2 | | | 10 | | | 12 | | | | | 0 | | | 3 | | | 3 | | Natural gas | Other current assets | | | 2 | | | 10 | | | 12 | | | | | 1 | | | 8 | | | 9 | |
| | Other assets | | | 2 | | | 4 | | | 6 | | | | | 0 | | | 1 | | | 1 | | | Other assets | | | 2 | | | 4 | | | 6 | | | | | 2 | | | 2 | | | 4 | |
| | Power | Power | Other current assets | | | 12 | | | 0 | | | 12 | | | | | 14 | | | 0 | | | 14 | | Power | Other current assets | | | 4 | | | 0 | | | 4 | | | | | 7 | | | 0 | | | 7 | |
| | Other assets | | | 1 | | | 0 | | | 1 | | | | | 2 | | | 0 | | | 2 | | | Other assets | | | 1 | | | 0 | | | 1 | | | | | 0 | | | 0 | | | 0 | |
| | | Total assets | | $ | 19 | | | $ | 14 | | | $ | 33 | | | | $ | 22 | | | $ | 4 | | | $ | 26 | | | Total assets | | $ | 14 | | | $ | 14 | | | $ | 28 | | | | $ | 12 | | | $ | 10 | | | $ | 22 | |
| | | Fuel oils | Fuel oils | Other current liabilities | | $ | 14 | | | $ | 0 | | | $ | 14 | | | | $ | 4 | | | $ | 0 | | | $ | 4 | | Fuel oils | Other current liabilities | | $ | 3 | | | $ | 0 | | | $ | 3 | | | | $ | 7 | | | $ | 0 | | | $ | 7 | |
| | Other deferred credits and liabilities | | | 6 | | | 0 | | | 6 | | | | | 3 | | | 0 | | | 3 | | | Other deferred credits and liabilities | | | 0 | | | 0 | | | 0 | | | | | 2 | | | 0 | | | 2 | |
| | Natural gas | Natural gas | Other current liabilities | | | 0 | | | 2 | | | 2 | | | | | 1 | | | 12 | | | 13 | | Natural gas | Other current liabilities | | | 0 | | | 0 | | | 0 | | | | | 1 | | | 1 | | | 2 | |
| | Other deferred credits and liabilities | | | 0 | | | 1 | | | 1 | | | | | 1 | | | 6 | | | 7 | | | Other deferred credits and liabilities | | | 0 | | | 0 | | | 0 | | | | | 0 | | | 1 | | | 1 | |
| | Power | Power | Other current liabilities | | | 6 | | | 16 | | | 22 | | | | | 2 | | | 17 | | | 19 | | Power | Other current liabilities | | | 9 | | | 16 | | | 25 | | | | | 3 | | | 17 | | | 20 | |
| | Other deferred credits and liabilities | | | 4 | | | 197 | | | 201 | | | | | 1 | | | 207 | | | 208 | | | Other deferred credits and liabilities | | | 5 | | | 169 | | | 174 | | | | | 8 | | | 181 | | | 189 | |
| | Uranium | Other deferred credits and liabilities | | | 0 | | | 0 | | | 0 | | | | | 1 | | | 0 | | | 1 | | |
| | Total liabilities | | $ | 30 | | | $ | 216 | | | $ | 246 | | | | $ | 13 | | | $ | 242 | | | $ | 255 | | |
| | | Total liabilities | | $ | 17 | | | $ | 185 | | | $ | 202 | | | | $ | 21 | | | $ | 200 | | | $ | 221 | |
| | | |
The Ameren Companies elect to present the fair value amounts of derivative assets and derivative liabilities subject to an enforceable master netting arrangement or similar agreement at the gross amounts on the balance sheet. However, if the gross amounts recognized on the balance sheet were netted with derivative instruments and cash collateral received or posted, the net amounts would not be materially different from the gross amounts at September 30, 2020,March 31, 2021, and December December��31, 2019.2020.
Credit Risk
In determining our concentrations of credit risk related to derivative instruments, we review our individual counterparties and categorize each counterparty into groupings according to the primary business in which each engages. As of September 30, 2020,March 31, 2021, if counterparty groups were to fail completely to perform on contracts, the Ameren Companies’ maximum exposure related to derivative assets would have been immaterial with or without consideration of the application of master netting arrangements or similar agreements and collateral held.
Certain of our derivative instruments contain collateral provisions tied to the Ameren Companies’ credit ratings. If our credit ratings were downgraded below investment grade, or if a counterparty with reasonable grounds for uncertainty regarding our ability to satisfy an obligation requested adequate assurance of performance, additional collateral postings might be required. The additional collateral required is the net liability position allowed under master netting arrangements or similar agreements, assuming (1) the credit risk-related contingent features underlying these arrangements were triggered and (2) those counterparties with rights to do so requested collateral. As of September 30, 2020,March 31, 2021, the aggregate fair value of derivative instruments with credit risk-related contingent features in a gross liability position, the cash collateral posted, and the aggregate amount of additional collateral that counterparties could require were each immaterial to Ameren, Ameren
Missouri, and Ameren Illinois.
NOTE 7 – FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value measurements are classified in three levels based on the fair value hierarchy as defined by GAAP. See Note 8 – Fair Value Measurements under Part II, Item 8, of the Form 10-K for information related to hierarchy levels and valuation techniques.
We consider nonperformance risk in our valuation of derivative instruments by analyzing our own credit standing and the credit standing of our counterparties, and by considering any credit enhancements (e.g., collateral). Included in our valuation, and based on current market conditions, is a valuation adjustment for counterparty default derived from market data such as the price of credit default swaps, bond yields, and credit ratings. No material gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in the three and nine months ended September 30, 2020March 31, 2021 or 2019.2020. At September 30, 2020,March 31, 2021, and December 31, 2019,2020, the counterparty default risk valuation adjustment related to derivative contracts was immaterial for Ameren, Ameren Missouri, and Ameren Illinois.
The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | September 30, 2020 | | | December 31, 2019 | | | March 31, 2021 | | | December 31, 2020 | |
| | Level 1 | Level 2 | Level 3 | Total | | | Level 1 | Level 2 | Level 3 | Total | | | Level 1 | Level 2 | Level 3 | Total | | | Level 1 | Level 2 | Level 3 | Total | |
| Assets: | Assets: | | | | Assets: | | | |
| Ameren Missouri | Ameren Missouri | | | | Ameren Missouri | | | |
| | Derivative assets – commodity contracts: | | | | | Derivative assets – commodity contracts: | | | |
| | Fuel oils | $ | 0 | | $ | 0 | | $ | 2 | | $ | 2 | | | | $ | 0 | | $ | 0 | | $ | 6 | | $ | 6 | | | | Fuel oils | $ | 4 | | $ | 0 | | $ | 1 | | $ | 5 | | | | $ | 0 | | $ | 0 | | $ | 2 | | $ | 2 | | |
| | Natural gas | 0 | | 4 | | 0 | | 4 | | | | 0 | | 0 | | 0 | | 0 | | | | Natural gas | 0 | | 4 | | 0 | | 4 | | | | 0 | | 3 | | 0 | | 3 | | |
| | Power | 1 | | 0 | | 12 | | 13 | | | | 0 | | 2 | | 14 | | 16 | | | | Power | 2 | | 0 | | 3 | | 5 | | | | 2 | | 0 | | 5 | | 7 | | |
| | | Total derivative assets – commodity contracts | $ | 1 | | $ | 4 | | $ | 14 | | $ | 19 | | | | $ | 0 | | $ | 2 | | $ | 20 | | $ | 22 | | | | Total derivative assets – commodity contracts | $ | 6 | | $ | 4 | | $ | 4 | | $ | 14 | | | | $ | 2 | | $ | 3 | | $ | 7 | | $ | 12 | | |
| | Nuclear decommissioning trust fund: | | | | | Nuclear decommissioning trust fund: | | | |
| | | Equity securities: | | | | | Equity securities: | | | |
| | U.S. large capitalization | $ | 604 | | $ | 0 | | $ | 0 | | $ | 604 | | | | $ | 569 | | $ | 0 | | $ | 0 | | $ | 569 | | | | U.S. large capitalization | $ | 679 | | $ | 0 | | $ | 0 | | $ | 679 | | | | $ | 680 | | $ | 0 | | $ | 0 | | $ | 680 | | |
| | Debt securities: | | | | | Debt securities: | | | |
| | U.S. Treasury and agency securities | 0 | | 112 | | 0 | | 112 | | | | 0 | | 107 | | 0 | | 107 | | | | U.S. Treasury and agency securities | 0 | | 133 | | 0 | | 133 | | | | 0 | | 115 | | 0 | | 115 | | |
| | Corporate bonds | 0 | | 116 | | 0 | | 116 | | | | 0 | | 93 | | 0 | | 93 | | | | Corporate bonds | 0 | | 128 | | 0 | | 128 | | | | 0 | | 115 | | 0 | | 115 | | |
| | | Other | 0 | | 66 | | 0 | | 66 | | | | 0 | | 73 | | 0 | | 73 | | | | Other | 0 | | 63 | | 0 | | 63 | | | | 0 | | 67 | | 0 | | 67 | | |
| | Total nuclear decommissioning trust fund | $ | 604 | | $ | 294 | | $ | 0 | | $ | 898 | | (a) | | $ | 569 | | $ | 273 | | $ | 0 | | $ | 842 | | (a) | | Total nuclear decommissioning trust fund | $ | 679 | | $ | 324 | | $ | 0 | | $ | 1,003 | | (a) | | $ | 680 | | $ | 297 | | $ | 0 | | $ | 977 | | (a) |
| | Total Ameren Missouri | $ | 605 | | $ | 298 | | $ | 14 | | $ | 917 | | | | $ | 569 | | $ | 275 | | $ | 20 | | $ | 864 | | | | Total Ameren Missouri | $ | 685 | | $ | 328 | | $ | 4 | | $ | 1,017 | | | | $ | 682 | | $ | 300 | | $ | 7 | | $ | 989 | | |
| Ameren Illinois | Ameren Illinois | | | | Ameren Illinois | | | |
| | Derivative assets – commodity contracts: | | | | | Derivative assets – commodity contracts: | | | |
| | Natural gas | $ | 0 | | $ | 9 | | $ | 5 | | $ | 14 | | | | $ | 0 | | $ | 1 | | $ | 3 | | $ | 4 | | | | Natural gas | $ | 0 | | $ | 10 | | $ | 4 | | $ | 14 | | | | $ | 0 | | $ | 6 | | $ | 4 | | $ | 10 | | |
| | Ameren | Ameren | | | | Ameren | | | |
| | Derivative assets – commodity contracts(b) | $ | 1 | | $ | 13 | | $ | 19 | | $ | 33 | | | | $ | 0 | | $ | 3 | | $ | 23 | | $ | 26 | | | | Derivative assets – commodity contracts(b) | $ | 6 | | $ | 14 | | $ | 8 | | $ | 28 | | | | $ | 2 | | $ | 9 | | $ | 11 | | $ | 22 | | |
| | Nuclear decommissioning trust fund(c) | 604 | | 294 | | 0 | | 898 | | (a) | | 569 | | 273 | | 0 | | 842 | | (a) | | Nuclear decommissioning trust fund(c) | 679 | | 324 | | 0 | | 1,003 | | (a) | | 680 | | 297 | | 0 | | 977 | | (a) |
| | Total Ameren | $ | 605 | | $ | 307 | | $ | 19 | | $ | 931 | | | | $ | 569 | | $ | 276 | | $ | 23 | | $ | 868 | | | | Total Ameren | $ | 685 | | $ | 338 | | $ | 8 | | $ | 1,031 | | | | $ | 682 | | $ | 306 | | $ | 11 | | $ | 999 | | |
| Liabilities: | Liabilities: | | | | Liabilities: | | | |
| Ameren Missouri | Ameren Missouri | | | | Ameren Missouri | | | |
| | Derivative liabilities – commodity contracts: | | | | | Derivative liabilities – commodity contracts: | | | |
| | Fuel oils | $ | 13 | | $ | 0 | | $ | 7 | | $ | 20 | | | | $ | 1 | | $ | 0 | | $ | 6 | | $ | 7 | | | | Fuel oils | $ | 1 | | $ | 0 | | $ | 2 | | $ | 3 | | | | $ | 6 | | $ | 0 | | $ | 3 | | $ | 9 | | |
| | Natural gas | 0 | | 0 | | 0 | | 0 | | | | 0 | | 2 | | 0 | | 2 | | | | Natural gas | 0 | | 0 | | 0 | | 0 | | | | 0 | | 1 | | — | | 1 | | |
| | Power | 8 | | 0 | | 2 | | 10 | | | | 0 | | 2 | | 1 | | 3 | | | | Power | 8 | | 0 | | 6 | | 14 | | | | 8 | | 0 | | 3 | | 11 | | |
| | Uranium | 0 | | 0 | | 0 | | 0 | | | | 0 | | 0 | | 1 | | 1 | | | |
| | Total Ameren Missouri | $ | 21 | | $ | 0 | | $ | 9 | | $ | 30 | | | | $ | 1 | | $ | 4 | | $ | 8 | | $ | 13 | | | | Total Ameren Missouri | $ | 9 | | $ | 0 | | $ | 8 | | $ | 17 | | | | $ | 14 | | $ | 1 | | $ | 6 | | $ | 21 | | |
| Ameren Illinois | Ameren Illinois | | | | Ameren Illinois | | | |
| | Derivative liabilities – commodity contracts: | | | | | Derivative liabilities – commodity contracts: | | | |
| | Natural gas | $ | 0 | | $ | 2 | | $ | 1 | | $ | 3 | | | | $ | 3 | | $ | 12 | | $ | 3 | | $ | 18 | | | | Natural gas | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | | $ | 0 | | $ | 1 | | $ | 1 | | $ | 2 | | |
| | Power | 0 | | 0 | | 213 | | 213 | | | | 0 | | 0 | | 224 | | 224 | | | | Power | 0 | | 0 | | 185 | | 185 | | | | 0 | | 0 | | 198 | | 198 | | |
| | Total Ameren Illinois | $ | 0 | | $ | 2 | | $ | 214 | | $ | 216 | | | | $ | 3 | | $ | 12 | | $ | 227 | | $ | 242 | | | | Total Ameren Illinois | $ | 0 | | $ | 0 | | $ | 185 | | $ | 185 | | | | $ | 0 | | $ | 1 | | $ | 199 | | $ | 200 | | |
| Ameren | Ameren | | | | Ameren | | | |
| | Derivative liabilities – commodity contracts(b) | $ | 21 | | $ | 2 | | $ | 223 | | $ | 246 | | | | $ | 4 | | $ | 16 | | $ | 235 | | $ | 255 | | | | Derivative liabilities – commodity contracts(b) | $ | 9 | | $ | 0 | | $ | 193 | | $ | 202 | | | | $ | 14 | | $ | 2 | | $ | 205 | | $ | 221 | | |
(a)Balance excludes $6$7 million and $5 million of cash and cash equivalents, receivables, payables, and accrued income, net, for September 30, 2020,March 31, 2021, and December 31, 2019,2020, respectively.
(b)See the Ameren Missouri and Ameren Illinois sections of the table for a breakout of the fair value of Ameren’s derivative assets and liabilities by type of commodity.
(c)See the Ameren Missouri section of the table for a breakout of the fair value of Ameren's nuclear decommissioning trust fund by investment type.
Level 3 fuel oils and natural gas and uranium derivative contract assets and liabilities measured at fair value on a recurring basis were immaterial for all periods presented. The following table presents the fair value reconciliation of Level 3 power derivative contract assets and liabilities measured at fair value on a recurring basis for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2020 | | | 2019 |
| Ameren
Missouri | Ameren
Illinois | | | Ameren | | | Ameren Missouri | Ameren Illinois | Ameren |
| For the three months ended September 30: | | | | | | | | | | |
| Beginning balance at July 1 | $ | 16 | | $ | (229) | | | | $ | (213) | | | | $ | 15 | | $ | (191) | | $ | (176) | |
| Realized and unrealized gains/(losses) included in regulatory assets/liabilities | (2) | | 12 | | | | 10 | | | | (4) | | (17) | | (21) | |
| | | | | | | | | | |
| | | | | | | | | | |
| Settlements | (4) | | 4 | | | | 0 | | | | (1) | | 4 | | 3 | |
| | | | | | | | | | |
| Transfers out of Level 3 | 0 | | 0 | | | | 0 | | | | (2) | | 0 | | (2) | |
| Ending balance at September 30 | $ | 10 | | $ | (213) | | | | $ | (203) | | | | $ | 8 | | $ | (204) | | $ | (196) | |
| Change in unrealized gains/(losses) related to assets/liabilities held at September 30 | $ | (2) | | $ | 11 | | | | $ | 9 | | | | $ | (4) | | $ | (17) | | $ | (21) | |
| For the nine months ended September 30: | | | | | | | | | | |
| Beginning balance at January 1 | $ | 13 | | $ | (224) | | | | $ | (211) | | | | $ | 0 | | $ | (183) | | $ | (183) | |
| Realized and unrealized gains/(losses) included in regulatory assets/liabilities | 18 | | (2) | | | | 16 | | | | 12 | | (32) | | (20) | |
| | | | | | | | | | |
| | | | | | | | | | |
| Settlements | (21) | | 13 | | | | (8) | | | | (2) | | 11 | | 9 | |
| | | | | | | | | | |
| Transfers out of Level 3 | 0 | | 0 | | | | 0 | | | | (2) | | 0 | | (2) | |
| Ending balance at September 30 | 10 | | (213) | | | | (203) | | | | 8 | | (204) | | (196) | |
| Change in unrealized gains/(losses) related to assets/liabilities held at September 30 | $ | 6 | | $ | (1) | | | | $ | 5 | | | | $ | 8 | | $ | (31) | | $ | (23) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | | 2020 |
| Ameren Missouri | Ameren Illinois | | | Ameren | | | Ameren Missouri | Ameren Illinois | Ameren |
| For the three months ended March 31: | | | | | | | | | | |
| Beginning balance at January 1 | $ | 2 | | $ | (198) | | | | $ | (196) | | | | $ | 13 | | $ | (224) | | $ | (211) | |
| Realized and unrealized gains/(losses) included in regulatory assets/liabilities | (5) | | 9 | | | | 4 | | | | 11 | | (21) | | (10) | |
| | | | | | | | | | |
| | | | | | | | | | |
| Settlements | 0 | | 4 | | | | 4 | | | | (7) | | 4 | | (3) | |
| | | | | | | | | | |
| | | | | | | | | | |
| Ending balance at March 31 | $ | (3) | | $ | (185) | | | | $ | (188) | | | | $ | 17 | | $ | (241) | | $ | (224) | |
| Change in unrealized gains/(losses) related to assets/liabilities held at March 31 | $ | (3) | | $ | 9 | | | | $ | 6 | | | | $ | 10 | | $ | (21) | | $ | (11) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
All gains or losses related to our Level 3 derivative commodity contracts are expected to be recovered or returned through customer rates; therefore, there is no impact to either net income or other comprehensive income resulting from changes in the fair value of these instruments.
The following table describes the valuation techniques and significant unobservable inputs utilized for the fair value of our Level 3 power derivative contract assets and liabilities as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | Fair Value | | Weighted Average(b) | | | Fair Value | | Weighted Average(b) | |
| | Commodity | | Assets | | Liabilities | Valuation Technique(s) | Unobservable Input(a) | Range | | | Commodity | | Assets | | Liabilities | Valuation Technique(s) | Unobservable Input(a) | Range | |
| | 2020 | Power(c) | $ | 12 | $ | (215) | Discounted cash flow | Average forward peak and off-peak pricing – forwards/swaps ($/MWh) | 20 – 36 | 28 | | |
| 2021 | | 2021 | Power(c) | $ | 3 | $ | (191) | Discounted cash flow | Average forward peak and off-peak pricing – forwards/swaps ($/MWh) | 23 – 40 | 29 | |
| | | Nodal basis ($/MWh) | (5) – 1 | (2) | | | Nodal basis ($/MWh) | (5) – 0 | (1) | |
| | | Trend rate (%) | 3 – 4 | 3 | | | Trend rate (%) | 2 – 5 | 3 | |
| | 2019 | Power(d) | $ | 14 | $ | (225) | Discounted cash flow | Average forward peak and off-peak pricing – forwards/swaps ($/MWh) | 22 – 34 | 25 | | |
| 2020 | | 2020 | Power(c) | $ | 5 | $ | (201) | Discounted cash flow | Average forward peak and off-peak pricing – forwards/swaps ($/MWh) | 23 – 37 | 29 | |
| | | Nodal basis ($/MWh) | (6) – 0 | (2) | | | Nodal basis ($/MWh) | (6) – 0 | (2) | |
| | | Trend rate (%) | (1) – 0 | 0 | | | Trend rate (%) | 2 – 6 | 3 | |
|
(a)Generally, significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement.
(b)Unobservable inputs were weighted by relative fair value.
(c)Valuations through 2029 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2029 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
(d)Valuations through 2028 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2028 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
The following table sets forth the carrying amount and, by level within the fair value hierarchy, the fair value of financial assets and liabilities disclosed, but not recorded, at fair value as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | Carrying
Amount | | Fair Value | | | Carrying
Amount | | Fair Value | |
| | Level 1 | | Level 2 | | Level 3 | | Total | | Level 1 | | Level 2 | | Level 3 | | Total |
| | | March 31, 2021 |
| Ameren: | | Ameren: | |
| Cash, cash equivalents, and restricted cash | | Cash, cash equivalents, and restricted cash | $ | 172 | | | $ | 172 | | | $ | 0 | | | $ | 0 | | | $ | 172 | |
Investments in industrial development revenue bonds(a) | | Investments in industrial development revenue bonds(a) | 256 | | | 0 | | | 256 | | | 0 | | | 256 | |
| Short-term debt | | Short-term debt | 889 | | | 0 | | | 889 | | | 0 | | | 889 | |
Long-term debt (including current portion)(a) | | Long-term debt (including current portion)(a) | 11,535 | | (b) | 0 | | | 12,233 | | | 507 | | (c) | 12,740 | |
| Ameren Missouri: | | Ameren Missouri: | |
| Cash, cash equivalents, and restricted cash | | Cash, cash equivalents, and restricted cash | $ | 12 | | | $ | 12 | | | $ | 0 | | | $ | 0 | | | $ | 12 | |
| Investments in industrial development revenue bonds(a) | | Investments in industrial development revenue bonds(a) | 256 | | | 0 | | | 256 | | | 0 | | | 256 | |
| Short-term debt | | Short-term debt | 204 | | | 0 | | | 204 | | | 0 | | | 204 | |
Long-term debt (including current portion)(a) | | Long-term debt (including current portion)(a) | 5,104 | | (b) | 0 | | | 5,685 | | | 0 | | | 5,685 | |
| Ameren Illinois: | | Ameren Illinois: | |
| Cash, cash equivalents, and restricted cash | | Cash, cash equivalents, and restricted cash | $ | 149 | | | $ | 149 | | | $ | 0 | | | $ | 0 | | | $ | 149 | |
| Short-term debt | | Short-term debt | 323 | | | 0 | | | 323 | | | 0 | | | 323 | |
| | Long-term debt (including current portion) | | Long-term debt (including current portion) | 3,947 | | (b) | 0 | | | 4,401 | | | 0 | | | 4,401 | |
| | September 30, 2020 | | December 31, 2020 |
| Ameren: | Ameren: | | Ameren: | |
| Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash | $ | 168 | | | $ | 168 | | | $ | 0 | | | $ | 0 | | | $ | 168 | | Cash, cash equivalents, and restricted cash | $ | 301 | | | $ | 301 | | | $ | 0 | | | $ | 0 | | | $ | 301 | |
Investments in industrial development revenue bonds(a) | Investments in industrial development revenue bonds(a) | 263 | | | 0 | | | 263 | | | 0 | | | 263 | | Investments in industrial development revenue bonds(a) | 256 | | | 0 | | | 256 | | | 0 | | | 256 | |
| Short-term debt | Short-term debt | 272 | | | 0 | | | 272 | | | 0 | | | 272 | | Short-term debt | 490 | | | 0 | | | 490 | | | 0 | | | 490 | |
Long-term debt (including current portion)(a) | Long-term debt (including current portion)(a) | 10,529 | | (b) | 0 | | | 11,891 | | | 521 | | (c) | 12,412 | | Long-term debt (including current portion)(a) | 11,086 | | (b) | 0 | | | 12,778 | | | 537 | | (c) | 13,315 | |
| Ameren Missouri: | Ameren Missouri: | | Ameren Missouri: | |
| Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash | $ | 10 | | | $ | 10 | | | $ | 0 | | | $ | 0 | | | $ | 10 | | Cash, cash equivalents, and restricted cash | $ | 145 | | | $ | 145 | | | $ | 0 | | | $ | 0 | | | $ | 145 | |
| Advances to money pool | Advances to money pool | 5 | | | 0 | | | 5 | | | 0 | | | 5 | | Advances to money pool | 139 | | | 0 | | | 139 | | | 0 | | | 139 | |
Investments in industrial development revenue bonds(a) | Investments in industrial development revenue bonds(a) | 263 | | | 0 | | | 263 | | | 0 | | | 263 | | Investments in industrial development revenue bonds(a) | 256 | | | 0 | | | 256 | | | 0 | | | 256 | |
| Long-term debt (including current portion)(a) | Long-term debt (including current portion)(a) | 4,568 | | (b) | 0 | | | 5,316 | | | 0 | | | 5,316 | | Long-term debt (including current portion)(a) | 5,104 | | (b) | 0 | | | 6,160 | | | 0 | | | 6,160 | |
| Ameren Illinois: | Ameren Illinois: | | Ameren Illinois: | |
| Cash, cash equivalents, and restricted cash | Cash, cash equivalents, and restricted cash | $ | 147 | | | $ | 147 | | | $ | 0 | | | $ | 0 | | | $ | 147 | | Cash, cash equivalents, and restricted cash | $ | 147 | | | $ | 147 | | | $ | 0 | | | $ | 0 | | | $ | 147 | |
| Short-term debt | 242 | | | 0 | | | 242 | | | 0 | | | 242 | | |
| | Borrowings from money pool | | Borrowings from money pool | 19 | | | 0 | | | 19 | | | 0 | | | 19 | |
| Long-term debt (including current portion) | Long-term debt (including current portion) | 3,576 | | (b) | 0 | | | 4,431 | | | 0 | | | 4,431 | | Long-term debt (including current portion) | 3,946 | | (b) | 0 | | | 4,822 | | | 0 | | | 4,822 | |
| December 31, 2019 | |
| Ameren: | | |
| Cash, cash equivalents, and restricted cash | $ | 176 | | | $ | 176 | | | $ | 0 | | | $ | 0 | | | $ | 176 | | |
Investments in industrial development revenue bonds(a) | 263 | | | 0 | | | 263 | | | 0 | | | 263 | | |
| Short-term debt | 440 | | | 0 | | | 440 | | | 0 | | | 440 | | |
Long-term debt (including current portion)(a) | 9,357 | | (b) | 0 | | | 9,957 | | | 484 | | (c) | 10,441 | | |
| Ameren Missouri: | | |
| Cash, cash equivalents, and restricted cash | $ | 39 | | | $ | 39 | | | $ | 0 | | | $ | 0 | | | $ | 39 | | |
Investments in industrial development revenue bonds(a) | 263 | | | 0 | | | 263 | | | 0 | | | 263 | | |
| Short-term debt | 234 | | | 0 | | | 234 | | | 0 | | | 234 | | |
Long-term debt (including current portion)(a) | 4,190 | | (b) | 0 | | | 4,772 | | | 0 | | | 4,772 | | |
| Ameren Illinois: | | |
| Cash, cash equivalents, and restricted cash | $ | 125 | | | $ | 125 | | | $ | 0 | | | $ | 0 | | | $ | 125 | | |
| Short-term debt | 53 | | | 0 | | | 53 | | | 0 | | | 53 | | |
| Long-term debt (including current portion) | 3,575 | | (b) | 0 | | | 4,019 | | | 0 | | | 4,019 | | |
(a)Ameren and Ameren Missouri have investments in industrial development revenue bonds, classified as held-to-maturity and recorded in “Other Assets,” that are equal to the finance obligations for the Peno Creek and Audrain CT energy centers. As of September 30, 2020,March 31, 2021, and December 31, 2019,2020, the carrying amount of both the investments in industrial development revenue bonds and the finance obligations approximated fair value.
(b)Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $77$86 million, $32$36 million, and $33$36 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of September 30, 2020.March 31, 2021. Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $72$84 million, $30$36 million, and $34$36 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2019.2020.
(c)The Level 3 fair value amount consists of ATXI’s senior unsecured notes.
NOTE 8 – RELATED-PARTY TRANSACTIONS
In the normalordinary course of business, Ameren Missouri and Ameren Illinois have engaged in, and may in the future engage in, affiliate transactions. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings. Transactions between Ameren’s subsidiaries are reported as affiliate transactions on their individual financial statements, but those transactions are eliminated in consolidation for Ameren’s consolidated financial statements, except as noted below.statements. For a discussion of material related-party agreements and money pool arrangements, see Note 13 – Related-party Transactions and Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of the Form 10-K. For information Ameren Missouri’s and Ameren Illinois’ capital contributions, see Note 4 – Long-term Debt and Equity Financings.
Electric Power and Capacity Supply AgreementsAgreement
In April and September 2020,2021, Ameren Illinois conducted a procurement events,event, administered by the IPA, to purchase energy products and acquire capacity.products. Ameren Missouri was among the winning suppliers in these events.this event. As a result, in April 2020, Ameren Missouri contracted to supply a portion of Ameren Illinois’ capacity requirements for $2 million from June 2021, through May 2023. In September 2020, Ameren Missouri contracted to supply a portion of Ameren Illinois’ capacity requirements for $1 million from June 2021 through May 2023. Additionally, in September 2020, Ameren Missouri and Ameren Illinois entered into an energy product agreement by which Ameren Missouri
agreed to sell and Ameren Illinois agreed to purchase, 204,800 megawatthours33,600 MWhs at an average price of $31$34 per megawatthourMWh during the period of September 2021July 2022 through November 2022.
Tax Allocation Agreement
See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of the Form 10-K for a discussion of the tax allocation agreement. The following table presents the affiliate balances related to income taxes for Ameren Missouri and Ameren Illinois as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | September 30, 2020 | | | December 31, 2019 | | March 31, 2021 | | | December 31, 2020 |
| | Ameren Missouri | Ameren Illinois | | | Ameren Missouri | Ameren Illinois | | Ameren Missouri | Ameren Illinois | | | Ameren Missouri | Ameren Illinois |
Income taxes payable to parent(a) | Income taxes payable to parent(a) | $ | 38 | | $ | 9 | | | | $ | 15 | | $ | 43 | | Income taxes payable to parent(a) | $ | 0 | | $ | 6 | | | | $ | 0 | | $ | 6 | |
Income taxes receivable from parent(b) | Income taxes receivable from parent(b) | 0 | | 6 | | | | 15 | | 17 | | Income taxes receivable from parent(b) | 14 | | 18 | | | | 9 | | 15 | |
(a)Included in “Accounts payable – affiliates” on the balance sheet.
(b)Included in “Accounts receivable – affiliates” on the balance sheet.
Effects of Related-party Transactions on the Statement of Income
The following table presents the effect on Ameren Missouri and Ameren Illinois of related-party transactions for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | Nine Months | | | | Three Months |
| Agreement | Agreement | Income Statement
Line Item | | Ameren
Missouri | | Ameren
Illinois | | Ameren
Missouri | | Ameren
Illinois | Agreement | Income Statement
Line Item | | | | Ameren
Missouri | | Ameren
Illinois |
| Ameren Missouri power supply | Ameren Missouri power supply | Operating Revenues | 2020 | $ | 5 | | $ | (a) | $ | 11 | | $ | (a) | Ameren Missouri power supply | Operating Revenues | 2021 | | $ | 2 | | $ | (a) |
| agreements with Ameren Illinois | agreements with Ameren Illinois | | 2019 | | 1 | | | (a) | | 3 | | | (a) | agreements with Ameren Illinois | | 2020 | | | 3 | | | (a) |
| Ameren Missouri and Ameren Illinois | Ameren Missouri and Ameren Illinois | Operating Revenues | 2020 | $ | 6 | | $ | (b) | $ | 19 | | $ | 1 | | Ameren Missouri and Ameren Illinois | Operating Revenues | 2021 | | $ | 7 | | $ | (b) |
| rent and facility services | rent and facility services | | 2019 | | 7 | | | 1 | | | 20 | | | 2 | | rent and facility services | | 2020 | | | 7 | | | 1 | |
| Ameren Missouri and Ameren Illinois | Operating Revenues | 2020 | $ | (b) | $ | 1 | | $ | 1 | | $ | 1 | | |
| miscellaneous support services | | 2019 | | 1 | | | (b) | | 1 | | | 1 | | |
| Ameren Missouri software licensing | Operating Revenues | 2020 | $ | (a) | $ | (a) | $ | (a) | $ | (a) | |
with Ameren Illinois(c) | | 2019 | | (a) | | 19 | | | (a) | | 19 | | |
| Ameren Missouri and Ameren Illinois miscellaneous | | Ameren Missouri and Ameren Illinois miscellaneous | Operating Revenues | 2021 | | $ | (b) | $ | (b) |
| support services and services provided to ATXI | | support services and services provided to ATXI | | 2020 | | | (b) | | (b) |
| Total Operating Revenues | Total Operating Revenues | | 2020 | $ | 11 | | $ | 1 | | $ | 31 | | $ | 2 | | Total Operating Revenues | | 2021 | | $ | 9 | | $ | (b) |
| | 2019 | | 9 | | | 20 | | | 24 | | | 22 | | | 2020 | | | 10 | | | 1 | |
| Ameren Illinois power supply | Ameren Illinois power supply | Purchased Power | 2020 | $ | (a) | $ | 5 | | $ | (a) | $ | 11 | | Ameren Illinois power supply | Purchased Power | 2021 | | $ | (a) | $ | 2 | |
| agreements with Ameren Missouri | agreements with Ameren Missouri | | 2019 | | (a) | | 1 | | | (a) | | 3 | | agreements with Ameren Missouri | | 2020 | | | (a) | | 3 | |
| Ameren Illinois transmission | Purchased Power | 2020 | $ | (a) | $ | (b) | $ | (a) | $ | 1 | | |
| services with ATXI | | 2019 | | (a) | | 1 | | | (a) | | 1 | | |
| Ameren Missouri and Ameren Illinois | | Ameren Missouri and Ameren Illinois | Purchased Power | 2021 | | $ | 1 | | $ | (b) |
| transmission services from ATXI | | transmission services from ATXI | | 2020 | | | (a) | | (b) |
| Total Purchased Power | Total Purchased Power | | 2020 | $ | (a) | $ | 5 | | $ | (a) | $ | 12 | | Total Purchased Power | | 2021 | | $ | 1 | | $ | 2 | |
| | 2019 | | (a) | | 2 | | | (a) | | 4 | | | 2020 | | | (a) | | 3 | |
| Ameren Missouri and Ameren Illinois | Ameren Missouri and Ameren Illinois | Other Operations and Maintenance | 2020 | $ | (b) | $ | 1 | | $ | (b) | $ | 3 | | Ameren Missouri and Ameren Illinois | Other Operations and Maintenance | 2021 | | $ | (b) | $ | 1 | |
| rent and facility services | rent and facility services | | 2019 | | (b) | | 1 | | | 1 | | | 4 | | rent and facility services | | 2020 | | | (b) | | 1 | |
| Ameren Services support services | Ameren Services support services | Other Operations and Maintenance | 2020 | $ | 36 | | $ | 34 | | $ | 103 | | $ | 98 | | Ameren Services support services | Other Operations and Maintenance | 2021 | | $ | 35 | | $ | 33 | |
| agreement | agreement | | 2019 | | 34 | | | 30 | | | 98 | | | 91 | | agreement | | 2020 | | | 35 | | | 33 | |
| Total Other Operations and | Total Other Operations and | | 2020 | $ | 36 | | $ | 35 | | $ | 103 | | $ | 101 | | Total Other Operations and | | 2021 | | $ | 35 | | $ | 34 | |
| Maintenance | Maintenance | | 2019 | | 34 | | | 31 | | | 99 | | | 95 | | Maintenance | | 2020 | | | 35 | | | 34 | |
| Money pool borrowings (advances) | Money pool borrowings (advances) | (Interest Charges)/Other Income, Net | 2020 | $ | (b) | $ | (b) | $ | (b) | $ | (b) | Money pool borrowings (advances) | (Interest Charges)/Other Income, Net | 2021 | | $ | (b) | $ | (b) |
| | 2019 | | (b) | | (b) | | (b) | | (b) | | 2020 | | | (b) | | (b) |
(a)Not applicable.
(b)Amount less than $1 million.
(c)In September 2019, Ameren Missouri purchased a license for advanced metering infrastructure software from Ameren Illinois. The amount of the $24 million cost-based transaction price over the $5 million remaining carrying value of the software was recorded as revenue by Ameren Illinois, with $14 million of revenue recorded at Ameren Illinois Electric Distribution and $5 million recorded at Ameren Illinois Natural Gas. The revenue recorded at Ameren Illinois Electric Distribution was reflected in formula ratemaking, which resulted in no impact to net income. Per authoritative accounting guidance for sales to rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation by Ameren.
NOTE 9 – COMMITMENTS AND CONTINGENCIES
We are involved in legal, tax, and regulatory proceedings before various courts, regulatory commissions, authorities, and governmental agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We
believe that the final disposition of these proceedings, except as otherwise disclosed in the notes to our financial statements in this report and in the Form 10-K, will not have a material adverse effect on our results of operations, financial position, or liquidity.
Reference is made to Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 109 – Callaway Energy Center, Note 13 – Related-party Transactions, and Note 14 – Commitments and Contingencies under Part II, Item 8, of the Form 10-K. See also Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 8 – Related-party Transactions, and Note 10 – Callaway Energy Center of this report.
Other Obligations
To supply a portion of the fuel requirements of Ameren Missouri’s energy centers, Ameren Missouri has entered into various long-term commitments for the procurement of coal, natural gas, nuclear fuel, and methane gas. Ameren Missouri and Ameren Illinois also have entered into various long-term commitments for purchased power and natural gas for distribution. The table below presents our estimated minimum fuel, purchased power, and other commitments at September 30, 2020. Ameren’s and Ameren Illinois’ purchased power commitments include the Ameren Illinois agreements entered into as part of the IPA-administered power procurement process. Included in the Other column are minimum purchase commitments under contracts for equipment, design and construction, and meter reading services, among other agreements, at September 30, 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Coal | | Natural Gas(a) | | Nuclear
Fuel | | Purchased Power(b)(c) | | Methane
Gas | | Other | | Total |
| Ameren: | | | | | | | | | | | | | |
| 2020 | $ | 94 | | | $ | 52 | | | $ | 3 | | | $ | 57 | | (d) | $ | 0 | | | $ | 39 | | | $ | 245 | |
| 2021 | 242 | | | 161 | | | 57 | | | 156 | | (d) | 3 | | | 53 | | | 672 | |
| 2022 | 193 | | | 108 | | | 12 | | | 63 | | | 3 | | | 23 | | | 402 | |
| 2023 | 113 | | | 69 | | | 45 | | | 21 | | | 3 | | | 23 | | | 274 | |
| 2024 | 94 | | | 28 | | | 20 | | | 4 | | | 3 | | | 20 | | | 169 | |
| Thereafter | 55 | | | 73 | | | 21 | | | 0 | | | 21 | | | 61 | | | 231 | |
| Total | $ | 791 | | | $ | 491 | | | $ | 158 | | | $ | 301 | | | $ | 33 | | | $ | 219 | | | $ | 1,993 | |
| Ameren Missouri: | | | | | | | | | | | | | |
| 2020 | $ | 94 | | | $ | 12 | | | $ | 3 | | | $ | 0 | | | $ | 0 | | | $ | 22 | | | $ | 131 | |
| 2021 | 242 | | | 43 | | | 57 | | | 0 | | | 3 | | | 46 | | | 391 | |
| 2022 | 193 | | | 38 | | | 12 | | | 0 | | | 3 | | | 23 | | | 269 | |
| 2023 | 113 | | | 32 | | | 45 | | | 0 | | | 3 | | | 23 | | | 216 | |
| 2024 | 94 | | | 13 | | | 20 | | | 0 | | | 3 | | | 20 | | | 150 | |
| Thereafter | 55 | | | 22 | | | 21 | | | 0 | | | 21 | | | 24 | | | 143 | |
| Total | $ | 791 | | | $ | 160 | | | $ | 158 | | | $ | 0 | | | $ | 33 | | | $ | 158 | | | $ | 1,300 | |
| Ameren Illinois: | | | | | | | | | | | | | |
| 2020 | $ | 0 | | | $ | 40 | | | $ | 0 | | | $ | 57 | | (d) | $ | 0 | | | $ | 14 | | | $ | 111 | |
| 2021 | 0 | | | 118 | | | 0 | | | 156 | | (d) | 0 | | | 2 | | | 276 | |
| 2022 | 0 | | | 70 | | | 0 | | | 63 | | | 0 | | | 0 | | | 133 | |
| 2023 | 0 | | | 37 | | | 0 | | | 21 | | | 0 | | | 0 | | | 58 | |
| 2024 | 0 | | | 15 | | | 0 | | | 4 | | | 0 | | | 0 | | | 19 | |
| Thereafter | 0 | | | 51 | | | 0 | | | 0 | | | 0 | | | 0 | | | 51 | |
| Total | $ | 0 | | | $ | 331 | | | $ | 0 | | | $ | 301 | | | $ | 0 | | | $ | 16 | | | $ | 648 | |
(a)Includes amounts for generation and for distribution.
(b)The purchased power amounts for Ameren and Ameren Illinois exclude agreements for renewable energy credits through 2035 with various renewable energy suppliers due to the contingent nature of the payment amounts, with the exception of expected payments of $36 million through 2024.
(c)The purchased power amounts for Ameren and Ameren Missouri exclude a 102-megawatt power purchase agreement with a wind farm operator, which expires in 2024, due to the contingent nature of the payment amounts.
(d)In January 2018, as required by the FEJA, Ameren Illinois entered into agreements to acquire zero emission credits through 2026. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent planning year, which begins each June. The amounts above reflect Ameren Illinois’ commitment to acquire $42 million of zero emission credits through May 2021.
Environmental Matters
We are subject to variousOur electric and gas generation, transmission, distribution and gas storage operations must comply with a variety of environmental laws,statutory and regulatory requirements, including statutes and regulations, enforced bypermitting programs implemented via federal, state, and local authorities. The development and operationDepending upon the specific business activity of electric generation, transmission, and distribution facilities and natural gas storage, transmission, and distribution facilities can trigger compliance obligations with respect to environmental laws. Thesethe facility, such laws address air emissions; discharges to surface and groundwater; water consumption; impacts to air, land, and water; and chemical and wastebodies; the storage, handling, and disposal.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 facilities.
Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures. We employ dedicated personnel knowledgeable in environmental matters to oversee our business activities’ compliance with regulatory requirements.
Environmental regulations have a significant impact on the electric utility industry and our operations. Compliancecompliance with these regulations could be costly for Ameren Missouri, which operates coal-fired power plants.Regulations Clean Air Act regulations that apply to air emissions from the electric utility industry include the NSPS, the CSAPR, the MATS, 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,NOx, mercury, toxic metals, and acid gases, and CO2 emissions from new power plants. Clean Water Act regulations applicable to coal-fired power plants govern both intake and discharges from power plants are regulated under the Clean Water Act. Such regulationsof water and require evaluation of the environmental impactsecological and biological impact of water intake structuresour operations and could require modifications to water intake structures or more stringent limitations on wastewater discharges at Ameren Missouri’s energy centers, eitherdischarges. Depending upon the scope of whichmodifications ultimately required by state regulators, these capital expenditures could result in significant capital expenditures.be significant. The management and disposal of coal ash is regulated as a solid waste under the Resource Conservation and Recovery Act and a regulation known as the CCR rule which will requireand requires the closure of our surface impoundments following the installations of dry ash handling systems at several of Ameren Missouri’s coal-fired energy centers. The individual or combined effects of existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of operations at some of Ameren Missouri’s energy centers. Ameren and Ameren Missouri expect that such compliance costs would be recoverable through rates, subject to MoPSC prudence review, but the timing of costs and their recovery could be subject to regulatory lag.
Ameren and Ameren Missouri estimate that they will need to make capital expenditures of $200$175 million to $250$225 million from 20202021 through 20242025 in order to comply with existing environmental regulations. Additional environmental controls beyond 20242025 could be required. This estimate of capital expenditures includes ash pond closure and corrective action costsmeasures required by the CCR regulations, applicable to potential modifications to cooling water intake structures at existing power plants under Clean Water Act rules, and by effluent limitation guidelines applicable to steam electric generating units, all of which are discussed below. This estimate does not include capital expenditures that may be required as a result of the NSR and Clean Air Act litigation discussed below. Ameren Missouri’s current plan for compliance with existing air emission regulations includes burning low-sulfur coal and installing new or optimizing existing air pollution control equipment. The actual amount of capital expenditures required to comply with existing environmental regulations may vary substantially from the above estimateestimates because of uncertainty as to future permitting requirements made by state regulators and the EPA, potential revisions to regulatory obligations, and the cost of potential compliance strategies, among other things.
The following sections describe the more significant environmental laws and rules and environmental enforcement and remediation matters that affect or could affect our operations. The EPA has initiated an administrative review of several regulations and proposed amendments to regulations and guidelines, including to the effluent limitation guidelines and the CCR Rule, which could ultimately result in the revision of all or part of such rules.
Clean Air Act
Federal and state laws, including CSAPR, regulate emissions of SO2 and NOx through the reduction of emissions at their source and the use and retirement of emission allowances. CSAPR is implemented through a series of phases, and the second phase became effective in 2017. Additional emission reduction requirements may apply in subsequent years. To achieve compliance with the CSAPR, Ameren Missouri burnscomplies with current CSAPR requirements by minimizing emissions through the use of low-sulfur coal, operatesoperation of 2 scrubbers at its Sioux Energy Center, and optimizesoptimization of other existing air pollution control equipment. Ameren Missouri expects tocould incur additional costs to lower its emissions at one or more of its energy centers to comply with theadditional CSAPR requirements in future years. These higheradditional costs for compliance are expected to be recovered from customers through the FAC or higher base rates.
CO2 Emissions Standards
The EPA’s Affordable Clean Energy Rule establishesrepealed the Clean Power Plan and replaced it with a new rule that established emission guidelines for states to follow in developing plans to limit CO2 emissions from coal-fired electric generating units. The EPA hasand identified certain efficiency measures as the best system of emission reduction for coal-fired electric generating units. The rule requiresIn January 2021, the stateUnited States Court of Missouri to develop a compliance plan and submit it toAppeals for the EPA for approval by July 2022. The plan is expected to include a standardDistrict of performance for each affected generating unit. We continue to evaluate the impact of the adoption and implementation ofColumbia Circuit vacated the Affordable Clean Energy Rule. Ameren MissouriRule, and other stakeholders are working withruled that the stateEPA had the discretion to consider emission reduction measures that include efficiency measures and generation shifting to lower carbon emissions. The United States Supreme Court has extended the deadline for seeking review, and a decision on whether the Supreme Court will review the circuit court's ruling could occur in fall 2021. Regardless of Missourithe outcome of those legal challenges, the EPA is likely to develop the compliance plan submittednew regulations to the EPA.address carbon emissions from coal and natural gas electric generating units. At this time, Ameren Missouri cannot predict the outcome of Missouri’s compliance plan development process.legal challenges to the vacated Affordable Clean
Energy Rule or future rulemakings. As such, the impact on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri is uncertain. We also cannot predict the outcome of any potential legal challenges to the rule.
NSR and Clean Air Litigation
In January 2011, the Department of Justice, on behalf of the EPA, filed a complaint against Ameren Missouri in the United States District Court for the Eastern District of Missouri alleging that in performing projects at its coal-fired Rush Island Energy Center in 2007 and 2010, Ameren Missouri violated provisions of the Clean Air Act and Missouri law. In January 2017, the district court issued a liability ruling and, in September 2019, entered a final order that required Ameren Missouri to install a flue gas desulfurization system at the Rush Island Energy Center and a dry sorbent injection system at the Labadie Energy Center. There were no fines in the order. In October 2019, Ameren Missouri
appealedorder as the district court’s ruling to the United States CourtDepartment of AppealsJustice previously dismissed claims for the Eighth Circuit.penalties. The district court has stayed implementation of the majority of the requirements of its order while the case is under appeal. Ameren Missouri believesappeal to the districtUnited States Court of Appeals for the Eighth Circuit. In December 2020, the court both misinterpretedof appeals heard oral arguments presented by the parties. The court is under no deadline to issue a ruling in this case and misapplied the law in its ruling. Ameren Missouri is unable to predict the ultimate resolution of this matter. Briefing in this case has been completed, but the appellate court has not yet scheduled oral arguments. The appellate court is under no deadline to issueAmeren Missouri expects a ruling in this case.by the court of appeals during 2021.
The ultimate resolution of this matter could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Among other things and subject to economic and regulatory considerations, resolution of this matter could result in increased capital expenditures for the installation of air pollution control equipment, as well as increased operations and maintenance expenses. Based upon engineering studies from October 2019, capital expenditures to comply with the district court’s order for installation of a flue gas desulfurization system at the Rush Island Energy Center are estimated at approximately $1 billion. Further, the flue gas desulfurization system would result in additional operation and maintenance expenses of $30 million to $50 million annually for the life of the energy center. Engineering studies required to develop estimated capital expenditures and estimated additional operation and maintenance expenses for the Labadie Energy Center to comply with the district court’s order will not be undertaken while the case is under appeal. As a result of the district court’s stay, Ameren Missouri does not expect to make significant capital expenditures or incur operations and maintenance expenses related to the district court’s order while the case is under appeal.
Clean Water Act
The EPA’s Section 316(b) Rule requires power plant operators to evaluate cooling water intake structures and identify measures for reducing the number of aquatic organisms impinged on a power plant’s cooling water intake screens or entrained through the plant’s cooling water system. All of Ameren Missouri’s coal-fired and nuclear energy centers are subject to the cooling water intake structures rule. Requirements of the rule are being implemented by state regulators through the permit renewal process of each energy center’s water discharge permit, which is expected to be completed by 2023.
In 2015, the EPA issued a rule to revise the effluent limitation guidelines applicable to steam electric generating units. These guidelines established national standards for water discharges, that are based on the effectiveness of available control technology and prohibits effluent discharges of certain waste streams, and imposes more stringent limitations on certain water discharges from power plants. To meet the requirements of the guidelines, Ameren Missouri hasinstalled dry ash handling systems and in 2020 completed or will complete construction in 2020 of wastewater treatment facilities and dry ash handling systems at 3 of its 4 coal-fired energy centers. The fourth coal-fired energy centerMeramec Energy Center is scheduled to close permanently in 2022.2022, and as a result, does not require new wastewater and dry ash handling systems. Estimated capital expenditures to complete these projects are included in the CCR management compliance plan, discussed below.
CCR Management
In 2015, the EPA issued theThe EPA’s CCR rule which establishedestablishes requirements for the management and disposal of CCR from coal-fired power plants. These regulations affect CCR disposalplants and handling costswill result in the closure of surface impoundments at Ameren Missouri’s energy centers. Ameren Missouri is in the process of closing surface impoundments at 3all of its facilities, and is scheduled to complete the last of such closures at all of its energy centers in 2023. While theThe EPA has issued a series of revisions to the CCR rule,rule; however, none of those revisions or proposals is expected to materially impact our closure schedule. Ameren and Ameren Missouri have AROs of $125$103 million recorded on their respective balance sheets as of September 30, 2020,March 31, 2021, associated with CCR storage facilities. Ameren Missouri estimates it will need to make capital expenditures of $75 million to $125$100 million from 20202021 through 20242025 to implement its CCR management compliance plan, which includes installation of dry ash handling systems, wastewater treatment facilities, and groundwater monitoring equipment.equipment and water treatment facilities.
Remediation
The Ameren Companies are involved in a number of remediation actions to clean up sites impacted by the use or disposal of materials containing hazardous substances. Federal and state laws can require responsible parties to fund remediation regardless of their degree of fault, the legality of original disposal, or the ownership of a disposal site.
As of September 30, 2020,March 31, 2021, Ameren Illinois has remediated the majority of the 44 former MGP sites in Illinois it owned or for which it was otherwise responsible. Ameren Illinois estimates itand could substantially conclude remediation efforts at the remaining sites by 2023. The ICC allows Ameren Illinois to recover such remediation and related litigation costs from its electric and natural gas utility customers through environmental cost riders. Costsriders that are subject to annual prudence review by the ICC. As
of September 30, 2020,March 31, 2021, Ameren Illinois estimated the remaining obligation related to these former MGP sites at $106$90 million to $178$150 million. Ameren and Ameren Illinois recorded a liability of $106$90 million to represent the estimated minimum obligation for these sites, as no other amount within the range was a better estimate.
The scope of the remediation activities at these former MGP sites may increase as remediation efforts continue. Considerable uncertainty remains in these estimates because many site-specific factors can influence the ultimate actual costs, including unanticipated underground structures, the degree to which groundwater is encountered, regulatory changes, local ordinances, and site accessibility. The actual costs and timing of completion may vary substantially from these estimates.
Our operations or those of our predecessor companies involve the use of, disposal of, and, in appropriate circumstances, the cleanup of substances regulated under environmental laws. We are unable to determine whether such historical practices will result in future environmental commitments or will affect our results of operations, financial position, or liquidity.
NOTE 10 – CALLAWAY ENERGY CENTER
See Note 9 – Callaway Energy Center under Part II, Item 8, of the Form 10-K for information regarding spent nuclear fuel recovery, recovery of decommissioning costs, and the nuclear decommissioning trust fund. The fair value of the trust fund for Ameren Missouri’s Callaway Energy Center is reported as “Nuclear decommissioning trust fund” in Ameren’s and Ameren Missouri’s balance sheets. This amount is legally restricted and may be used only to fund the costs of nuclear decommissioning. Changes in the fair value of the trust fund are recorded as an increase or decrease to the nuclear decommissioning trust fund, with an offsetting adjustment to the related regulatory liability. Ameren and Ameren Missouri have recorded an ARO for the Callaway Energy Center decommissioning costs at fair value, which represents the present value of estimated future cash outflows. Annual decommissioning costs of $7 million are included in the costs used to establish electric rates for Ameren Missouri’s customers. Every three years, the MoPSC requires Ameren Missouri to file an updated cost study and funding analysis for decommissioning its Callaway Energy Center. An updated cost study and funding analysis was filed with the MoPSC in November 2020 and reflected within the ARO. In February 2021, the MoPSC approved no change in electric rates for decommissioning costs based on Ameren Missouri’s updated cost study funding analysis. See Note 13 -– Supplemental Information for more information on Ameren Missouri’s AROs.
Maintenance Outage
During its return to full power after the completion of the last refueling and maintenance outage in late December 2020, the Callaway Energy Center experienced a non-nuclear operating issue related to its generator. A thorough investigation of this matter was conducted. Work continues to replace certain key components of the generator in order to return the energy center to service. Ameren Missouri expects generator repairs of approximately $65 million, which are expected to be largely capital expenditures. Due to the long lead time for the manufacture, repair, and installation of the components, the energy center is expected to return to service in July 2021. In April 2021, Ameren Missouri’s insurance claims were accepted by NEIL, which are expected to cover a significant portion of the capital expenditures and replacement power costs. Replacement power costs of up to $4.5 million weekly are covered by insurance after March 17, 2021. Insurance recoveries related to replacement power costs will be reflected in electric operating revenues and included in net energy costs under the FAC. Insurance recoveries related to the capital expenditures will be reflected as a reduction to property, plant, and equipment. Ameren Missouri continues to review other legal remedies available.
Insurance
The following table presents insurance coverage at Ameren Missouri’s Callaway Energy Center at September 30, 2020:April 1, 2021:
| | Type and Source of Coverage | Type and Source of Coverage | Most Recent
Renewal Date | Maximum Coverages | | Maximum Assessments
for Single Incidents | | Type and Source of Coverage | Most Recent
Renewal Date | Maximum Coverages | | Maximum Assessments
for Single Incidents | |
| Public liability and nuclear worker liability: | Public liability and nuclear worker liability: | | Public liability and nuclear worker liability: | |
| American Nuclear Insurers | American Nuclear Insurers | January 1, 2020 | $ | 450 | | | $ | 0 | | | American Nuclear Insurers | January 1, 2021 | $ | 450 | | | $ | 0 | | |
| Pool participation | Pool participation | (a) | 13,348 | | (a) | 138 | | (b) | Pool participation | (a) | 13,210 | | (a) | 138 | | (b) |
| | $ | 13,798 | | (c) | $ | 138 | | | | $ | 13,660 | | (c) | $ | 138 | | |
| Property damage: | Property damage: | | Property damage: | |
| NEIL and EMANI | NEIL and EMANI | April 1, 2020 | $ | 3,200 | | (d) | $ | 25 | | (e) | NEIL and EMANI | April 1, 2021 | $ | 3,200 | | (d) | $ | 25 | | (e) |
| Replacement power: | Replacement power: | | Replacement power: | |
| NEIL | NEIL | April 1, 2020 | $ | 490 | | (f) | $ | 7 | | (e) | NEIL | April 1, 2021 | $ | 490 | | (f) | $ | 7 | | (e) |
(a)Provided through mandatory participation in an industrywide retrospective premium assessment program. The maximum coverage available is dependent on the number of United States commercial reactors participating in the program.
(b)Retrospective premium under the Price-Anderson Act. This is subject to retrospective assessment with respect to a covered loss in excess of $450 million in the event of an incident at any licensed United States commercial reactor, payable at $21 million per year.
(c)Limit of liability for each incident under the Price-Anderson liability provisions of the Atomic Energy Act of 1954, as amended. This limit is subject to change to account for the effects of inflation and changes in the number of licensed power reactors.
(d)NEIL provides $2.7 billion in property damage, stabilization, decontamination, and premature decommissioning insurance for radiation events and $2.3 billion in property damage insurance for nonradiation events. EMANI provides $490 million in property damage insurance for both radiation and nonradiation events.
(e)All NEIL-insured plants could be subject to assessments should losses exceed the accumulated funds from NEIL.
(f)Provides replacement power cost insurance in the event of a prolonged accidental outage. Weekly indemnity up to $4.5 million for 52 weeks, which commences after the first 12 weeks of an outage, plus up to $3.6 million per week for a minimum of 71 weeks thereafter for a total not exceeding the policy limit of $490 million. Nonradiation events are limited to $328 million.
The Price-Anderson Act is a federal law that limits the liability for claims from an incident involving any licensed United States commercial nuclear energy center. The limit is based on the number of licensed reactors. The limit of liability and the maximum potential annual payments are adjusted at least every five years for inflation to reflect changes in the Consumer Price Index. The most recent five-year inflationary adjustment became effective in November 2018. Owners of a nuclear reactor cover this exposure through a combination of private insurance and mandatory participation in a financial protection pool, as established by the Price-Anderson Act.
Losses resulting from terrorist attacks on nuclear facilities insured by NEIL are subject to industrywide aggregates, such that terrorist acts against one or more commercial nuclear power plants within a stated time period would be treated as a single event, and the owners of the nuclear power plants would share the limit of liability. NEIL policies have an aggregate limit of $3.2 billion within a 12-month period for radiation events, or $1.8 billion for events not involving radiation contamination, resulting from terrorist attacks. The EMANI policies are not subject to industrywide aggregates in the event of terrorist attacks on nuclear facilities.
If losses from a nuclear incident at the Callaway Energy Center exceed the limits of, or are not covered by insurance, or if coverage is unavailable, Ameren Missouri is at risk for any uninsured losses. If a serious nuclear incident were to occur, it could have a material adverse effect on Ameren’s and Ameren Missouri’s results of operations, financial position, or liquidity.
NOTE 11 – RETIREMENT BENEFITS
The following table presents the components of the net periodic benefit cost (income) incurred for Ameren’s pension and postretirement benefit plans for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Pension Benefits | | Postretirement Benefits | | | Pension Benefits | | | Postretirement Benefits |
| | Three Months | | Nine Months | | Three Months | | Nine Months | | | Three Months | | | Three Months |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 | | | 2021 | | 2020 |
Service cost(a) | Service cost(a) | $ | 28 | | | $ | 22 | | | $ | 83 | | | $ | 66 | | | $ | 4 | | | $ | 4 | | | $ | 14 | | | $ | 13 | | Service cost(a) | | $ | 33 | | | $ | 27 | | | | $ | 6 | | | $ | 4 | |
| Non-service cost components: | Non-service cost components: | | Non-service cost components: | | | | |
| Interest cost | Interest cost | 43 | | | 46 | | | 130 | | | 139 | | | 10 | | | 11 | | | 29 | | | 32 | | Interest cost | | 38 | | | 43 | | | | 8 | | | 10 | |
| Expected return on plan assets | Expected return on plan assets | (73) | | | (69) | | | (218) | | | (207) | | | (20) | | | (19) | | | (60) | | | (57) | | Expected return on plan assets | | (75) | | | (73) | | | | (20) | | | (20) | |
| Amortization of: | Amortization of: | | Amortization of: | | | | |
| | Prior service benefit | Prior service benefit | 0 | | | 0 | | | (1) | | | 0 | | | (1) | | | (1) | | | (3) | | | (4) | | Prior service benefit | | 0 | | | 0 | | | | (1) | | | (1) | |
| Actuarial loss (gain) | Actuarial loss (gain) | 15 | | | 6 | | | 45 | | | 19 | | | (3) | | | (4) | | | (7) | | | (11) | | Actuarial loss (gain) | | 17 | | | 14 | | | | (1) | | | (2) | |
Total non-service cost components(b) | Total non-service cost components(b) | $ | (15) | | | $ | (17) | | | $ | (44) | | | $ | (49) | | | $ | (14) | | | $ | (13) | | | $ | (41) | | | $ | (40) | | Total non-service cost components(b) | | $ | (20) | | | $ | (16) | | | | $ | (14) | | | $ | (13) | |
| | Net periodic benefit cost (income) | Net periodic benefit cost (income) | $ | 13 | | | $ | 5 | | | $ | 39 | | | $ | 17 | | | $ | (10) | | | $ | (9) | | | $ | (27) | | | $ | (27) | | Net periodic benefit cost (income) | | $ | 13 | | | $ | 11 | | | | $ | (8) | | | $ | (9) | |
(a)Service cost, net of capitalization, is reflected in “Operating Expenses – Other operations and maintenance” on Ameren’s statement of income.
(b)Non-service cost components are reflected in “Other Income, Net” on Ameren’s statement of income. See Note 5 – Other Income, Net, for additional information.
Ameren Missouri and Ameren Illinois are responsible for their respective share of Ameren’s pension and other postretirement costs. The following table presents the respective share of net periodic pension and other postretirement benefit costs (income) incurred for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Pension Benefits | | Postretirement Benefits | | | Pension Benefits | | | Postretirement Benefits |
| | Three Months | | Nine Months | | Three Months | | Nine Months | | | Three Months | | | Three Months |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | | | 2021 | | 2020 | | | 2021 | | 2020 |
Ameren Missouri(a) | Ameren Missouri(a) | $ | 5 | | | $ | 1 | | | $ | 16 | | | $ | 3 | | | $ | (2) | | | $ | (1) | | | $ | (4) | | | $ | (4) | | Ameren Missouri(a) | | $ | 6 | | | $ | 4 | | | | $ | (1) | | | $ | (1) | |
| Ameren Illinois | Ameren Illinois | 8 | | | 5 | | | 24 | | | 15 | | | (8) | | | (8) | | | (24) | | | (23) | | Ameren Illinois | | 8 | | | 7 | | | | (7) | | | (8) | |
| Other | Other | 0 | | | (1) | | | (1) | | | (1) | | | 0 | | | 0 | | | 1 | | | 0 | | Other | | (1) | | | 0 | | | | 0 | | | 0 | |
Ameren(a) | Ameren(a) | $ | 13 | | | $ | 5 | | | $ | 39 | | | $ | 17 | | | $ | (10) | | | $ | (9) | | | $ | (27) | | | $ | (27) | | Ameren(a) | | $ | 13 | | | $ | 11 | | | | $ | (8) | | | $ | (9) | |
(a)Does not include the impact of the regulatory tracking mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.
Funding
Based on its assumptions at September 30, 2020,March 31, 2021, its investment performance in 2020,2021, and its pension funding policy, the estimated aggregate contributions through 20242025 has not materially changed from the $70$60 million expected aggregate contributions at December 31, 2019.2020.
NOTE 12 – INCOME TAXES
The following table presents a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren | | Ameren Missouri | | Ameren Illinois | |
| 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | |
| Three Months | | | | | | | | | | | | |
| Federal statutory corporate income tax rate: | 21% | | 21% | | 21% | | 21% | | 21% | | 21% | |
| Increases (decreases) from: | | | | | | | | | | | | |
| Amortization of deferred investment tax credit | (1) | | (1) | | (1) | | (1) | | 0 | | 0 | |
| Amortization of excess deferred taxes | (9) | (a) | (7) |
| (16) | (a) | (11) |
| (3) | | (3) | |
| Depreciation differences | 0 | | 0 | | 0 | | 0 | | (1) | | 0 | |
| | | | | | | | | | | | |
| Renewable and other tax credits | (1) | | 0 | | (2) | | 0 | | 0 | | 0 | |
| State tax | 4 | | 6 | | 4 | | 5 | | 7 | | 6 | |
| Stock-based compensation | 1 | | 1 | | 0 | | 0 | | 0 | | 0 | |
| | | | | | | | | | | | |
| Effective income tax rate | 15% | | 20% | | 6% | | 14% | | 24% | | 24% | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren | | Ameren Missouri | | Ameren Illinois | |
| 2020 | | 2019 | | 2020 | | 2019 | | 2020 | | 2019 | |
| Nine Months | | | | | | | | | | | | |
| Federal statutory corporate income tax rate: | 21% | | 21% | | 21% | | 21% | | 21% | | 21% | |
| Increases (decreases) from: | | | | | | | | | | | | |
| Amortization of deferred investment tax credit | 0 | | (1) | | (1) | | (1) | | 0 | | 0 | |
| Amortization of excess deferred taxes | (9) | (a) | (7) | | (16) | (a) | (12) | | (3) | | (4) | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Renewable and other tax credits | (1) | | 0 | | (1) | | 0 | | 0 | | 0 | |
| State tax | 5 | | 6 | | 3 | | 5 | | 7 | | 7 | |
| Stock-based compensation | (1) | | (1) | | 0 | | 0 | | 0 | | 0 | |
| | | | | | | | | | | | |
| Effective income tax rate | 15% | | 18% | | 6% | | 13% | | 25% | | 24% | |
(a)Increase in the amortization of excess deferred taxes pursuant to the MoPSC’s March 2020 electric rate order. See Note 2 – Rate and Regulatory Matters for additional information. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren | | Ameren Missouri | | Ameren Illinois | |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Three Months | | | | | | | | | | | | |
| Federal statutory corporate income tax rate: | 21% | | 21% | | 21% | | 21% | | 21% | | 21% | |
| Increases (decreases) from: | | | | | | | | | | | | |
| Amortization of deferred investment tax credit | (1) | | 0 | | (1) | | (1) | | 0 | | 0 | |
| Amortization of excess deferred taxes | (9) | | (9) |
| (17) | | (15) |
| (2) | | (3) | |
| Depreciation differences | 0 | | (1) | | 1 | | 0 | | (1) | | (1) | |
| | | | | | | | | | | | |
| Renewable and other tax credits | (6) | | 0 | | (11) | | 0 | | 0 | | 0 | |
| State tax | 6 | | 6 | | 3 | | 3 | | 7 | | 7 | |
| Stock-based compensation | (1) | | (5) | | 0 | | 0 | | 0 | | 0 | |
| | | | | | | | | | | | |
| Effective income tax rate | 10% | | 12% | | (4)% | | 8% | | 25% | | 24% | |
NOTE 13 – SUPPLEMENTAL INFORMATION
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows as of September 30, 2020,March 31, 2021, and December 31, 2019:2020:
| | | September 30, 2020 | | | December 31, 2019 | | | March 31, 2021 | | | December 31, 2020 | |
| Ameren | | Ameren
Missouri | | Ameren
Illinois | | | Ameren | | Ameren
Missouri | | Ameren
Illinois | | | Ameren | | Ameren
Missouri | | Ameren
Illinois | | | Ameren | | Ameren
Missouri | | Ameren
Illinois | |
| Cash and cash equivalents | Cash and cash equivalents | $ | 6 | | | $ | 0 | | | $ | 0 | | | | $ | 16 | | | $ | 9 | | | $ | 0 | | | Cash and cash equivalents | $ | 6 | | | $ | 1 | | | $ | 0 | | | | $ | 139 | | | $ | 136 | | | $ | 0 | | |
| Restricted cash | | Restricted cash | 134 | | | — | | | 125 | | | | 17 | | | — | | | 6 | | |
| Restricted cash included in “Other current assets” | Restricted cash included in “Other current assets” | 14 | | | 4 | | | 5 | | | | 14 | | | 4 | | | 5 | | | Restricted cash included in “Other current assets” | — | | | 3 | | | — | | | | — | | | 5 | | | — | | |
| Restricted cash included in “Other assets” | Restricted cash included in “Other assets” | 142 | | | 0 | | | 142 | | | | 120 | | | 0 | | | 120 | | | Restricted cash included in “Other assets” | 24 | | | 0 | | | 24 | | | | 141 | | | 0 | | | 141 | | |
| Restricted cash included in “Nuclear decommissioning trust fund” | Restricted cash included in “Nuclear decommissioning trust fund” | 6 | | | 6 | | | 0 | | | | 26 | | | 26 | | | 0 | | | Restricted cash included in “Nuclear decommissioning trust fund” | 8 | | | 8 | | | 0 | | | | 4 | | | 4 | | | 0 | | |
| Total cash, cash equivalents, and restricted cash | Total cash, cash equivalents, and restricted cash | $ | 168 | | | $ | 10 | | | $ | 147 | | | | $ | 176 | | | $ | 39 | | | $ | 125 | | | Total cash, cash equivalents, and restricted cash | $ | 172 | | | $ | 12 | | | $ | 149 | | | | $ | 301 | | | $ | 145 | | | $ | 147 | | |
Restricted cash included in “Other current assets” primarily represents funds held by an irrevocable Voluntary Employee Beneficiary Association (VEBA) trust, which provides health care benefits for active employees. RestrictedAs of December 31, 2020, restricted cash included in “Other assets” on Ameren’s and Ameren Illinois’ balance sheets primarily represents amounts collected under a cost recovery rider restricted for use in the procurement of renewable energy credits and amounts in a trust fund restricted for the use of funding certain asbestos-related claims. As of March 31, 2021, the amounts collected under a cost recovery rider restricted for use in Ameren Illinois’ procurement of renewable energy credits was reclassified to current as the amount is expected to be refunded to customers within a year.
Accounts Receivable
“Accounts receivable – trade” on Ameren’s and Ameren Illinois’ balance sheets include certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At September 30, 2020,March 31, 2021, and December 31, 2019,2020, “Other current liabilities” on Ameren’s and Ameren Illinois’ balance sheets included payables for purchased receivables of $36$31 million and $32$28 million, respectively.
The following table provides a reconciliation of the beginning and ending amount of the allowance for doubtful accounts for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | | Nine Months | | | Three Months |
| | 2020 | | 2019 | | | 2020 | | 2019 | | | 2021 | | 2020 |
| Ameren: | Ameren: | | | | Ameren: | | |
| Beginning of period | Beginning of period | $ | 25 | | | $ | 19 | | | | $ | 17 | | | $ | 18 | | Beginning of period | | $ | 50 | | | $ | 17 | |
| Bad debt expense | Bad debt expense | 21 | | | 14 | | | | 31 | | | 22 | | Bad debt expense | | 4 | | | 3 | |
| | Net write-offs | Net write-offs | (2) | | | (14) | | | | (4) | | | (21) | | Net write-offs | | (7) | | | (1) | |
| | End of period | End of period | $ | 44 | | | $ | 19 | | | | $ | 44 | | | $ | 19 | | End of period | | $ | 47 | | | $ | 19 | |
| Ameren Missouri: | Ameren Missouri: | | | | Ameren Missouri: | | |
| Beginning of period | Beginning of period | $ | 9 | | | $ | 7 | | | | $ | 7 | | | $ | 7 | | Beginning of period | | $ | 16 | | | $ | 7 | |
| Bad debt expense | Bad debt expense | 5 | | | 3 | | | | 9 | | | 6 | | Bad debt expense | | 1 | | | 2 | |
| | Net write-offs | Net write-offs | 0 | | | (2) | | | | (2) | | | (5) | | Net write-offs | | (2) | | | (1) | |
| End of period | End of period | $ | 14 | | | $ | 8 | | | | $ | 14 | | | $ | 8 | | End of period | | $ | 15 | | | $ | 8 | |
Ameren Illinois:(a) | Ameren Illinois:(a) | | | | Ameren Illinois:(a) | | |
| Beginning of Period | Beginning of Period | $ | 16 | | | $ | 12 | | | | $ | 10 | | | $ | 11 | | Beginning of Period | | $ | 34 | | | $ | 10 | |
| Bad debt expense | Bad debt expense | 16 | | | 11 | | | | 22 | | | 16 | | Bad debt expense | | 3 | | | 1 | |
| | Net write-offs | Net write-offs | (2) | | | (12) | | | | (2) | | | (16) | | Net write-offs | | (5) | | | 0 | |
| | End of Period | End of Period | $ | 30 | | | $ | 11 | | | | $ | 30 | | | $ | 11 | | End of Period | | $ | 32 | | | $ | 11 | |
(a)Ameren Illinois has rate-adjustment mechanisms that allow it to recover the difference between its actual net bad debt write-offs under GAAP, including those associated with receivables purchased from alternative retail electric suppliers, and the amount of net bad debt write-offs included in its base rates. In 2020, the rate-adjustment mechanism for electric distribution allows for recovery of bad debt expense recognized under GAAP. See Note 2 – Rate and Regulatory Matters for additional information.
Net write-offs decreasedincreased for the three and nine months ended September 30, 2020,March 31, 2021, compared with the year-ago periods,period, due to the temporary suspensionresumption of disconnecting customersdisconnection activities for nonpayment. See Note 2 – Rate and Regulatory Matters for additional information.
Supplemental Cash Flow Information
The following table provides noncash financing and investing activity excluded from the statements of cash flows for the ninethree months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | September 30, 2020 | | September 30, 2019 | | March 31, 2021 | | March 31, 2020 |
| Ameren | Ameren
Missouri | | Ameren
Illinois | Ameren | Ameren
Missouri | Ameren
Illinois | | Ameren | Ameren
Missouri | | Ameren
Illinois | Ameren | Ameren
Missouri | Ameren
Illinois |
| Investing | Investing | | | | | | |
| | Exchange of bond investments for the extinguishment of senior unsecured notes | $ | 0 | | $ | 0 | | | $ | 0 | | | $ | 17 | | $ | 0 | | $ | 17 | | |
| Accrued capital expenditures | 311 | | 115 | | | 191 | | | 273 | | 138 | | 128 | | |
| | Accrued capital expenditures, including wind generation expenditures | | Accrued capital expenditures, including wind generation expenditures | $ | 271 | | $ | 141 | | | $ | 139 | | | $ | 235 | | $ | 97 | | $ | 127 | |
| Accrued nuclear fuel expenditures | | Accrued nuclear fuel expenditures | 0 | | 0 | | | 0 | | | 7 | | 7 | | 0 | |
Net realized and unrealized gain (loss) – nuclear decommissioning trust fund | Net realized and unrealized gain (loss) – nuclear decommissioning trust fund | 43 | | 43 | | | 0 | | | 100 | | 100 | | 0 | | Net realized and unrealized gain (loss) – nuclear decommissioning trust fund | 22 | | 22 | | | 0 | | | (111) | | (111) | | 0 | |
| Financing | Financing | | | | Financing | | | |
| Exchange of bond investments for the extinguishment of senior unsecured notes | $ | 0 | | $ | 0 | | | $ | 0 | | | $ | (17) | | $ | 0 | | $ | (17) | | |
| | Issuance of common stock for stock-based compensation | Issuance of common stock for stock-based compensation | 38 | | 0 | | | 0 | | | 54 | | 0 | | 0 | | Issuance of common stock for stock-based compensation | 33 | | 0 | | | 0 | | | 38 | | 0 | | 0 | |
Asset Retirement Obligations
The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the ninethree months ended September 30, 2020:March 31, 2021:
| | | Ameren
Missouri | | Ameren
Illinois | | | Ameren | | | Ameren
Missouri | | Ameren
Illinois | | | Ameren | |
| Balance at December 31, 2019 | $ | 687 | |
| $ | 4 | | | (a) | $ | 691 | | (b) | |
| | Balance at December 31, 2020 | | Balance at December 31, 2020 | $ | 751 | |
| $ | 5 | | | (a) | $ | 756 | | (b) |
Liabilities incurred (c) | | Liabilities incurred (c) | 10 | | | 0 | | | | 10 | | |
| Liabilities settled | Liabilities settled | (42) | | | 0 | | | | (42) | | | Liabilities settled | (3) | | | 0 | | | | (3) | | |
| Accretion | Accretion | 21 | | (c) | 1 | | | (c) | 22 | | (c) | Accretion | 8 | | (d) | 0 | | |
| 8 | | (d) |
| Change in estimates | Change in estimates | 57 | | (d) | 0 | | | | 57 | | (d) | Change in estimates | (7) | | (e) | 0 | | | | (7) | | (e) |
| Balance at September 30, 2020 | $ | 723 | |
| $ | 5 | | | (a) | $ | 728 | | (b) | |
| Balance at March 31, 2021 | | Balance at March 31, 2021 | $ | 759 | |
| $ | 5 | | | (a) | $ | 764 | | (b) |
(a)Included in “Other deferred credits and liabilities” on the balance sheet.
(b)Balance included $53$59 million and $60 million in “Other current liabilities” on the balance sheet as of bothMarch 31, 2021, and December 31, 2019, and September 30, 2020.2020, respectively.
(c)In the first quarter of 2021, Ameren Missouri recorded an ARO related to the decommissioning for the Atchison Renewable Energy Center.
(d)Accretion expense attributable to Ameren Missouri and Ameren Illinois was recorded as a decrease to regulatory liabilities and an increase to regulatory assets, respectively.liabilities.
(d)(e)Ameren Missouri changed its fair value estimate primarily due to an update to the decommissioning of the Callaway Energy Center to reflect the cost study and funding analysis filed with the MoPSC in November 2020 and an increasea decrease in the cost estimate for closure of certain CCR storage facilities.
Stock-based Compensation
On January 1, 2020,2021, Ameren granted 294,320293,058 performance share units with a grant date fair value of $24$25 million and 132,307125,562 restricted share units with a grant date fair value of $10 million. Awards vest approximately 38 months after the grant date or on a pro-rata basis upon death or eligible retirement. The performance share units vest based on the achievement of certain specified market performance measures (252,370(251,177 performance share units) or based on the achievement of renewable generation and energy storage installation targets (41,950(41,881 performance share units). The exact number of shares issued pursuant to a performance share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals.
On September 18, 2020, Ameren granted certain executive officers an additional 37,104 restricted share units with a grant date fair value of $3 million, which will vest after three years on September 17, 2023. The awards do not provide for pro rata vesting in connection with the executive officer's retirement.
For the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, excess tax benefits associated with the settlement of stock-based compensation awards reduced income tax expense by $8$5 million and $14$8 million, respectively.
Deferred Compensation
As of September 30, 2020,both March 31, 2021, and December 31, 2019,2020, the present value of benefits to be paid for deferred compensation obligations was $88$90 million,and$86 million, respectively, which was primarily reflected in “Other deferred credits and liabilities” on Ameren's consolidated balance sheet.
Operating Revenues
As of September 30,March 31, 2021 and 2020, and 2019, our remaining performance obligations for contracts with a term greater than one year were immaterial. The Ameren Companies elected not to disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of the end of the reporting period for contracts with an initial expected term of one year or less.
See Note 14 – Segment Information for disaggregated revenue information.
Excise Taxes
Ameren Missouri and Ameren Illinois collect from their customers excise taxes, including municipal and state excise taxes and gross receipts taxes that are levied on the sale or distribution of natural gas and electricity. The following table presents the excise taxes recorded on a gross basis in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” on the statements of income for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | Nine Months | | Three Months | |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2021 | | 2020 | |
| Ameren Missouri | Ameren Missouri | $ | 45 | | | $ | 49 | | | $ | 111 | | | $ | 118 | | Ameren Missouri | $ | 31 | | | $ | 30 | | |
| Ameren Illinois | Ameren Illinois | 26 | | | 27 | | | 87 | | | 91 | | Ameren Illinois | 39 | | | 35 | | |
| Ameren | Ameren | $ | 71 | | | $ | 76 | | | $ | 198 | | | $ | 209 | | Ameren | $ | 70 | | | $ | 65 | | |
Earnings per Share
The following table reconciles the basic weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | Nine Months | | | | Three Months |
| | 2020 | | 2019 | | 2020 | | 2019 | | | | 2021 | | 2020 |
| | Weighted-average Common Shares Outstanding – Basic | Weighted-average Common Shares Outstanding – Basic | 247.1 | | | 245.9 | | | 246.8 | | | 245.5 | | Weighted-average Common Shares Outstanding – Basic | | | 254.4 | | | 246.4 | |
| Assumed settlement of performance share units and restricted stock units | Assumed settlement of performance share units and restricted stock units | 1.5 | | | 1.4 | | | 1.2 | | | 1.4 | | Assumed settlement of performance share units and restricted stock units | | | 1.5 | | | 1.1 | |
| Dilutive effect of forward sale agreement | Dilutive effect of forward sale agreement | 0.6 | | | 0.2 | | | 0.4 | | | 0.1 | | Dilutive effect of forward sale agreement | | | 0 | | | 0.6 | |
Weighted-average Common Shares Outstanding – Diluted(a) | Weighted-average Common Shares Outstanding – Diluted(a) | 249.2 | | | 247.5 | | | 248.4 | | | 247.0 | | Weighted-average Common Shares Outstanding – Diluted(a) | | | 255.9 | | | 248.1 | |
|
(a)There were 0 potentially dilutive securities excluded from the earnings per diluted share calculations for the three and nine months ended September 30, 2020March 31, 2021 and 2019.2020.
NOTE 14 – SEGMENT INFORMATION
The following tables present revenues, net income (loss) attributable to common shareholders, and capital expenditures by segment at Ameren and Ameren Illinois for the three and nine months ended September 30, 2020March 31, 2021 and 2019.2020. Ameren, Ameren Missouri, and Ameren Illinois management review segment capital expenditure information rather than any individual or total asset amount. For additional information about our segments, see Note 16 – Segment Information under Part II, Item 8, of the Form 10-K.
Ameren
| | | Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | Other | | Intersegment Eliminations | | Ameren | | | Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | Other | | Intersegment Eliminations | | Ameren | |
| | Three Months 2021: | | Three Months 2021: | |
| External revenues | | External revenues | $ | 695 | | | $ | 411 | | | $ | 347 | | | $ | 113 | | | $ | — | | | $ | — | | | $ | 1,566 | | |
| Intersegment revenues | | Intersegment revenues | 9 | | | 0 | | | 0 | | | 17 | | | — | | | (26) | | | — | | |
| Net income attributable to Ameren common shareholders | | Net income attributable to Ameren common shareholders | 47 | | | 46 | | | 75 | | | 47 | | (a) | 18 | | | — | | | 233 | | |
| Capital expenditures | | Capital expenditures | 534 | | (b) | 157 | | | 48 | | | 141 | | | 1 | | | 6 | | | 887 | | (b) |
| Three Months 2020: | Three Months 2020: | | Three Months 2020: | |
| External revenues | External revenues | $ | 990 | | | $ | 390 | | | $ | 122 | | | $ | 126 | | | $ | 0 | | | $ | 0 | | | $ | 1,628 | | | External revenues | $ | 670 | | | $ | 389 | | | $ | 271 | | | $ | 110 | | | $ | — | | | $ | — | | | $ | 1,440 | | |
| Intersegment revenues | Intersegment revenues | 11 | | | 1 | | | 0 | | | 15 | | (a) | 0 | | | (27) | | | 0 | | | Intersegment revenues | 10 | | | 1 | | | 0 | | | 13 | | | — | | | (24) | | | — | | |
| Net income (loss) attributable to Ameren common shareholders | Net income (loss) attributable to Ameren common shareholders | 297 | | | 34 | | | 2 | | | 62 | | (b) | (28) | | | 0 | | | 367 | | | Net income (loss) attributable to Ameren common shareholders | (10) | | | 37 | | | 55 | | | 47 | | (a) | 17 | | | — | | | 146 | | |
| Capital expenditures | Capital expenditures | 262 | | | 129 | | | 81 | | | 185 | | | 2 | | | (3) | | | 656 | | | Capital expenditures | 278 | | | 123 | | | 61 | | | 170 | | | 3 | | | 1 | | | 636 | | |
| Three Months 2019: | | |
| External revenues | $ | 1,050 | | | $ | 374 | | | $ | 107 | | | $ | 109 | | | $ | 0 | | | $ | 0 | | | $ | 1,640 | | | |
| Intersegment revenues | 9 | | | 15 | | | 5 | | | 19 | | (a) | 0 | | | (29) | | | 19 | | (c) | |
| Net income (loss) attributable to Ameren common shareholders | 300 | | | 32 | | | (1) | | | 53 | | (b) | (20) | | | 0 | | | 364 | | | |
| Capital expenditures | 256 | | | 139 | | | 113 | | | 129 | | | (7) | | | 6 | | | 636 | | | |
| Nine Months 2020: | | |
| External revenues | $ | 2,442 | | | $ | 1,131 | | | $ | 533 | | | $ | 360 | | | $ | 0 | | | $ | 0 | | | $ | 4,466 | | | |
| Intersegment revenues | 31 | | | 2 | | | 0 | | | 40 | | (a) | 0 | | | (73) | | | 0 | | | |
| Net income (loss) attributable to Ameren common shareholders | 439 | | | 107 | | | 66 | | | 168 | | (b) | (24) | | | 0 | | | 756 | | | |
| Capital expenditures | 778 | | | 391 | | | 221 | | | 490 | | | 4 | | | 0 | | | 1,884 | | | |
| Nine Months 2019: | | |
| External revenues | $ | 2,591 | | | $ | 1,118 | | | $ | 563 | | | $ | 303 | | | $ | 0 | | | $ | 0 | | | $ | 4,575 | | | |
| Intersegment revenues | 24 | | | 17 | | | 5 | | | 48 | | (a) | 0 | | | (75) | | | 19 | | (c) | |
| Net income (loss) attributable to Ameren common shareholders | 446 | | | 105 | | | 57 | | | 139 | | (b) | (13) | | | 0 | | | 734 | | | |
| Capital expenditures | 751 | | | 390 | | | 241 | | | 377 | | | 3 | | | (1) | | | 1,761 | | | |
(a)Ameren Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution.
(b)Ameren Transmission earnings reflect an allocation of financing costs from Ameren (parent).
(c)(b)Intersegment revenuesIncludes $193 million at Ameren include $14 million and $5 million of revenue from Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively,Missouri for wind generation expenditures for the three and nine months ended September 30, 2019, for a software licensing agreement with Ameren Missouri. Under authoritative accounting guidance for rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation. See Note 8 – Related-party Transactions under Part I, Item 1, of this report for additional information.March 31, 2021.
Ameren Illinois
| | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Intersegment Eliminations | | Ameren Illinois | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Intersegment Eliminations | | Ameren Illinois |
| | Three Months 2021: | | Three Months 2021: | |
| External revenues | | External revenues | $ | 411 | | | $ | 347 | | | $ | 65 | | | $ | — | | | $ | 823 | |
| Intersegment revenues | | Intersegment revenues | 0 | | | 0 | | | 16 | | | (16) | | | — | |
| Net income available to common shareholder | | Net income available to common shareholder | 46 | | | 75 | | | 28 | | | — | | | 149 | |
| Capital expenditures | | Capital expenditures | 157 | | | 48 | | | 132 | | | — | | | 337 | |
| Three Months 2020: | Three Months 2020: | | Three Months 2020: | |
| External revenues | External revenues | $ | 391 | | | $ | 122 | | | $ | 76 | | | $ | 0 | | | $ | 589 | | External revenues | $ | 390 | | | $ | 271 | | | $ | 62 | | | $ | — | | | $ | 723 | |
| Intersegment revenues | Intersegment revenues | 0 | | | 0 | | | 15 | | (a) | (15) | | | 0 | | Intersegment revenues | 0 | | | 0 | | | 12 | | | (12) | | | — | |
| Net income available to common shareholder | Net income available to common shareholder | 34 | | | 2 | | | 41 | | | 0 | | | 77 | | Net income available to common shareholder | 37 | | | 55 | | | 28 | | | — | | | 120 | |
| Capital expenditures | Capital expenditures | 129 | | | 81 | | | 160 | | | 0 | | | 370 | | Capital expenditures | 123 | | | 61 | | | 140 | | | — | | | 324 | |
| Three Months 2019: | | |
| External revenues | $ | 389 | | | $ | 112 | | | $ | 63 | | | $ | 0 | | | $ | 564 | | |
| Intersegment revenues | 0 | | | 0 | | | 18 | | (a) | (18) | | | 0 | | |
| Net income (loss) available to common shareholder | 32 | | | (1) | | | 34 | | | 0 | | | 65 | | |
| Capital expenditures | 139 | | | 113 | | | 92 | | | 0 | | | 344 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Intersegment Eliminations | | Ameren Illinois |
| Nine Months 2020: | | | | | | | | | |
| External revenues | $ | 1,133 | | | $ | 533 | | | $ | 213 | | | $ | 0 | | | $ | 1,879 | |
| Intersegment revenues | 0 | | | 0 | | | 39 | | (a) | (39) | | | 0 | |
| Net income available to common shareholder | 107 | | | 66 | | | 107 | | | 0 | | | 280 | |
| Capital expenditures | 391 | | | 221 | | | 419 | | | 0 | | | 1,031 | |
| Nine Months 2019: | | | | | | | | | |
| External revenues | $ | 1,135 | | | $ | 568 | | | $ | 170 | | | $ | 0 | | | $ | 1,873 | |
| Intersegment revenues | 0 | | | 0 | | | 47 | | (a) | (47) | | | 0 | |
| Net income available to common shareholder | 105 | | | 57 | | | 85 | | | 0 | | | 247 | |
| Capital expenditures | 390 | | | 241 | | | 269 | | | 0 | | | 900 | |
(a)Ameren Illinois Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution.
The following tables present disaggregated revenues by segment at Ameren and Ameren Illinois for the three and nine months ended September 30, 2020March 31, 2021 and 2019.2020. Economic factors affect the nature, timing, amount, and uncertainty of revenues and cash flows in a similar manner across customer classes. Revenues from alternative revenue programs have a similar distribution among customer classes as revenues from contracts with customers. Other revenues not associated with contracts with customers are presented in the Other customer classification, along with electric transmission and off-system revenues.
Ameren
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | | | Intersegment Eliminations | | Ameren | |
| Three Months 2020: | | | | | | | | | | | | | | |
| Residential | $ | 455 | | | $ | 234 | | | $ | 0 | | | $ | 0 | | | | | $ | 0 | | | $ | 689 | | |
| Commercial | 343 | | | 127 | | | 0 | | | 0 | | | | | 0 | | | 470 | | |
| Industrial | 87 | | | 26 | | | 0 | | | 0 | | | | | 0 | | | 113 | | |
| Other | 99 | | | 4 | |
| 0 | | | 141 | | | | | (27) | | | 217 | | |
| Total electric revenues | $ | 984 | | | $ | 391 | | | $ | 0 | | | $ | 141 | | | | | $ | (27) | | | $ | 1,489 | | |
| Residential | $ | 8 | | | $ | 0 | | | $ | 68 | | | $ | 0 | | | | | $ | 0 | | | $ | 76 | | |
| Commercial | 3 | | | 0 | | | 18 | | | 0 | | | | | 0 | | | 21 | | |
| Industrial | 1 | | | 0 | | | 5 | | | 0 | | | | | 0 | | | 6 | | |
| Other | 5 | | | 0 | | | 31 | |
| 0 | | | | | 0 | | | 36 | | |
| Total gas revenues | $ | 17 | | | $ | 0 | | | $ | 122 | | | $ | 0 | | | | | $ | 0 | | | $ | 139 | | |
Total revenues(a) | $ | 1,001 | | | $ | 391 | | | $ | 122 | | | $ | 141 | | | | | $ | (27) | | | $ | 1,628 | | |
| Three Months 2019: | | | | | | | | | | | | | | |
| Residential | $ | 489 | | | $ | 224 | | | $ | 0 | | | $ | 0 | | | | | $ | 0 | | | $ | 713 | | |
| Commercial | 394 | | | 123 | | | 0 | | | 0 | | | | | 0 | | | 517 | | |
| Industrial | 94 | | | 27 | | | 0 | | | 0 | | | | | 0 | | | 121 | | |
| Other | 63 | |
| 15 | | (b) | 0 | | | 128 | | | | | (29) | | | 177 | |
|
| Total electric revenues | $ | 1,040 | | | $ | 389 | | | $ | 0 | | | $ | 128 | | | | | $ | (29) | | | $ | 1,528 | | |
| Residential | $ | 8 | | | $ | 0 | | | $ | 65 | | | $ | 0 | | | | | $ | 0 | | | $ | 73 | | |
| Commercial | 4 | | | 0 | | | 17 | | | 0 | | | | | 0 | | | 21 | | |
| Industrial | 1 | | | 0 | | | 2 | | | 0 | | | | | 0 | | | 3 | | |
| Other | 6 | | | 0 | | | 28 | | (b) | 0 | | | | | 0 | | | 34 | | |
| Total gas revenues | $ | 19 | | | $ | 0 | | | $ | 112 | | | $ | 0 | | | | | $ | 0 | | | $ | 131 | | |
Total revenues(a) | $ | 1,059 | | | $ | 389 | | | $ | 112 | | | $ | 128 | | | | | $ | (29) | | | $ | 1,659 | | |
| | | Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | | Intersegment Eliminations | | Ameren | | | Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | | Intersegment Eliminations | | Ameren | |
| Nine Months 2020: | | | | |
| | Three Months 2021: | | Three Months 2021: | | | |
| Residential | Residential | $ | 1,111 | | | $ | 664 | | | $ | 0 | | | $ | 0 | | | | $ | 0 | | | $ | 1,775 | | | Residential | $ | 312 | | | $ | 229 | | | $ | 0 | | | $ | 0 | | | | $ | 0 | | | $ | 541 | | |
| Commercial | Commercial | 828 | | | 365 | | | 0 | | | 0 | | | | 0 | | | 1,193 | | | Commercial | 216 | | | 132 | | | 0 | | | 0 | | | | 0 | | | 348 | | |
| Industrial | Industrial | 207 | | | 91 | | | 0 | | | 0 | | | | 0 | | | 298 | | | Industrial | 52 | | | 34 | | | 0 | | | 0 | | | | 0 | | | 86 | | |
| Other | Other | 240 | | | 13 | | | 0 | | | 400 | | | | (73) | | | 580 | | | Other | 61 | | | 16 | | | 0 | | | 130 | | | | (26) | | | 181 | | |
| Total electric revenues | Total electric revenues | $ | 2,386 | | | $ | 1,133 | | | $ | 0 | | | $ | 400 | | | | $ | (73) | | | $ | 3,846 | | | Total electric revenues | $ | 641 | | | $ | 411 | | | $ | 0 | | | $ | 130 | | | | $ | (26) | | | $ | 1,156 | | |
| Residential | Residential | $ | 52 | | | $ | 0 | | | $ | 375 | | | $ | 0 | | | | $ | 0 | | | $ | 427 | | | Residential | $ | 34 | | | $ | 0 | | | $ | 251 | | | $ | 0 | | | | $ | 0 | | | $ | 285 | | |
| Commercial | Commercial | 20 | | | 0 | | | 94 | | | 0 | | | | 0 | | | 114 | | | Commercial | 15 | | | 0 | | | 64 | | | 0 | | | | 0 | | | 79 | | |
| Industrial | Industrial | 3 | | | 0 | | | 11 | | | 0 | | | | 0 | | | 14 | | | Industrial | 1 | | | 0 | | | 14 | | | 0 | | | | 0 | | | 15 | | |
| Other | Other | 12 | | | 0 | | | 53 | | | 0 | | | | 0 | | | 65 | | | Other | 13 | | | 0 | | | 18 | | | 0 | | | | 0 | | | 31 | | |
| Total natural gas revenues | Total natural gas revenues | $ | 87 | | | $ | 0 | | | $ | 533 | | | $ | 0 | | | | $ | 0 | | | $ | 620 | | | Total natural gas revenues | $ | 63 | | | $ | 0 | | | $ | 347 | | | $ | 0 | | | | $ | 0 | | | $ | 410 | | |
Total revenues(a) | Total revenues(a) | $ | 2,473 | | | $ | 1,133 | | | $ | 533 | | | $ | 400 | | | | $ | (73) | | | $ | 4,466 | | | Total revenues(a) | $ | 704 | | | $ | 411 | | | $ | 347 | | | $ | 130 | | | | $ | (26) | | | $ | 1,566 | | |
| Nine Months 2019: | | | | |
| Three Months 2020: | | Three Months 2020: | | | |
| Residential | Residential | $ | 1,134 | | | $ | 640 | | | $ | 0 | | | $ | 0 | | | | $ | 0 | | | $ | 1,774 | | | Residential | $ | 297 | | | $ | 220 | | | $ | 0 | | | $ | 0 | | | | $ | — | | | $ | 517 | | |
| Commercial | Commercial | 943 | | | 370 | | | 0 | | | 0 | | | | 0 | | | 1,313 | | | Commercial | 221 | | | 126 | | | 0 | | | 0 | | | | 0 | | | 347 | | |
| Industrial | Industrial | 226 | | | 94 | | | 0 | | | 0 | | | | 0 | | | 320 | | | Industrial | 53 | | | 35 | | | 0 | | | 0 | | | | 0 | | | 88 | | |
| Other | Other | 214 | | | 31 | | (b) | 0 | | | 351 | | | | (75) | | | 521 | | | Other | 60 | | | 9 | | | 0 | | | 123 | | | | (24) | | | 168 | | |
| Total electric revenues | Total electric revenues | $ | 2,517 | | | $ | 1,135 | | | $ | 0 | | | $ | 351 | | | | $ | (75) | | | $ | 3,928 | | | Total electric revenues | $ | 631 | | | $ | 390 | | | $ | 0 | | | $ | 123 | | | | $ | (24) | | | $ | 1,120 | | |
| Residential | Residential | $ | 56 | | | $ | 0 | | | $ | 399 | | | $ | 0 | | | | $ | 0 | | | $ | 455 | | | Residential | $ | 33 | | | $ | 0 | | | $ | 213 | | | $ | 0 | | | | $ | 0 | | | $ | 246 | | |
| Commercial | Commercial | 24 | | | 0 | | | 105 | | | 0 | | | | 0 | | | 129 | | | Commercial | 13 | | | 0 | | | 54 | | | 0 | | | | 0 | | | 67 | | |
| Industrial | Industrial | 3 | | | 0 | | | 9 | | | 0 | | | | 0 | | | 12 | | | Industrial | 1 | | | 0 | | | 3 | | | 0 | | | | 0 | | | 4 | | |
| Other | Other | 15 | | | 0 | | | 55 | | (b) | 0 | | | | 0 | | | 70 | | | Other | 2 | | | 0 | | | 1 | | | 0 | | | | 0 | | | 3 | | |
| Total natural gas revenues | Total natural gas revenues | $ | 98 | | | $ | 0 | | | $ | 568 | | | $ | 0 | | | | $ | 0 | | | $ | 666 | | | Total natural gas revenues | $ | 49 | | | $ | 0 | | | $ | 271 | | | $ | 0 | | | | $ | 0 | | | $ | 320 | | |
Total revenues(a) | Total revenues(a) | $ | 2,615 | | | $ | 1,135 | | | $ | 568 | | | $ | 351 | | | | $ | (75) | | | $ | 4,594 | | | Total revenues(a) | $ | 680 | | | $ | 390 | | | $ | 271 | | | $ | 123 | | | | $ | (24) | | | $ | 1,440 | | |
(a)The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | Ameren |
| Three Months 2020: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 1 | | | $ | (110) | | | $ | 3 | | | $ | 4 | | | $ | (102) | |
| Other revenues not from contracts with customers | 6 | | | 5 | | | 0 | | | 0 | | | 11 | |
| | | | | | | | | |
| Three Months 2019: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 26 | | | $ | (145) | | | $ | 1 | | | $ | (12) | | | $ | (130) | |
| Other revenues not from contracts with customers | 5 | | | 1 | | | 1 | | | 0 | | | 7 | |
| | | | | | | | | |
| Nine Months 2020: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | (8) | | | $ | (59) | | | $ | 17 | | | $ | 34 | | | $ | (16) | |
| Other revenues not from contracts with customers | 21 | | | 6 | | | 1 | | | 0 | | | 28 | |
| | | | | | | | | |
| Nine Months 2019: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | 41 | | | $ | (111) | | | $ | 2 | | | $ | (25) | | | $ | (93) | |
| Other revenues not from contracts with customers | 14 | | | 5 | | | 2 | | | 0 | | | 21 | |
| | | | | | | | | |
(b)Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the three and nine months ended September 30, 2019, for a software licensing agreement with Ameren Missouri. See Note 8 – Related-party Transactions for additional information. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Missouri | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Transmission | | Ameren |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Three Months 2021: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | (10) | | | $ | 61 | | | $ | 3 | | | $ | (1) | | | $ | 53 | |
| Other revenues not from contracts with customers | (2) | | | 3 | | | 1 | | | 0 | | | 2 | |
| | | | | | | | | |
| Three Months 2020: | | | | | | | | | |
| Revenues from alternative revenue programs | $ | (3) | | | $ | 46 | | | $ | 11 | | | $ | 12 | | | $ | 66 | |
| Other revenues not from contracts with customers | 8 | | | 1 | | | 1 | | | 0 | | | 10 | |
| | | | | | | | | |
Ameren Illinois
| | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Intersegment Eliminations | | Ameren Illinois | | | Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Intersegment Eliminations | | Ameren Illinois | |
| | Three Months 2021: | | Three Months 2021: | |
| Residential | | Residential | $ | 229 | | | $ | 251 | | | $ | 0 | | | $ | 0 | | | $ | 480 | | |
| Commercial | | Commercial | 132 | | | 64 | | | 0 | | | 0 | | | 196 | | |
| Industrial | | Industrial | 34 | | | 14 | | | 0 | | | 0 | | | 48 | | |
| Other | | Other | 16 | | | 18 | | | 81 | | | (16) | | | 99 | | |
Total revenues(a) | | Total revenues(a) | $ | 411 | | | $ | 347 | | | $ | 81 | | | $ | (16) | | | $ | 823 | | |
| Three Months 2020: | Three Months 2020: | | Three Months 2020: | |
| Residential | Residential | $ | 234 | | | $ | 68 | | | $ | 0 | | | $ | 0 | | | $ | 302 | | | Residential | $ | 220 | | | $ | 213 | | | $ | 0 | | | $ | 0 | | | $ | 433 | | |
| Commercial | Commercial | 127 | | | 18 | | | 0 | | | 0 | | | 145 | | | Commercial | 126 | | | 54 | | | 0 | | | 0 | | | 180 | | |
| Industrial | Industrial | 26 | | | 5 | | | 0 | | | 0 | | | 31 | | | Industrial | 35 | | | 3 | | | 0 | | | 0 | | | 38 | | |
| Other | Other | 4 | |
| 31 | |
| 91 | | | (15) | | | 111 | | | Other | 9 | | | 1 | | | 74 | | | (12) | | | 72 | | |
Total revenues(a) | Total revenues(a) | $ | 391 | | | $ | 122 | | | $ | 91 | | | $ | (15) | | | $ | 589 | | | Total revenues(a) | $ | 390 | | | $ | 271 | | | $ | 74 | | | $ | (12) | | | $ | 723 | | |
| Three Months 2019: | | |
| Residential | $ | 224 | | | $ | 65 | | | $ | 0 | | | $ | 0 | | | $ | 289 | | | |
| Commercial | 123 | | | 17 | | | 0 | | | 0 | | | 140 | | | |
| Industrial | 27 | | | 2 | | | 0 | | | 0 | | | 29 | | | |
| Other | 15 | | (b) | 28 | | (b) | 81 | | | (18) | | | 106 | | | |
Total revenues(a) | $ | 389 | | | $ | 112 | | | $ | 81 | | | $ | (18) | | | $ | 564 | | | |
| Nine Months 2020: | | |
| Residential | $ | 664 | | | $ | 375 | | | $ | 0 | | | $ | 0 | | | $ | 1,039 | | | |
| Commercial | 365 | | | 94 | | | 0 | | | 0 | | | 459 | | | |
| Industrial | 91 | | | 11 | | | 0 | | | 0 | | | 102 | | | |
| Other | 13 | | | 53 | | | 252 | | | (39) | | | 279 | | | |
Total revenues(a) | $ | 1,133 | | | $ | 533 | | | $ | 252 | | | $ | (39) | | | $ | 1,879 | | | |
| Nine Months 2019: | | |
| Residential | $ | 640 | | | $ | 399 | | | $ | 0 | | | $ | 0 | | | $ | 1,039 | | | |
| Commercial | 370 | | | 105 | | | 0 | | | 0 | | | 475 | | | |
| Industrial | 94 | | | 9 | | | 0 | | | 0 | | | 103 | | | |
| Other | 31 | | (b) | 55 | | (b) | 217 | | | (47) | | | 256 | | | |
Total revenues(a) | $ | 1,135 | | | $ | 568 | | | $ | 217 | | | $ | (47) | | | $ | 1,873 | | | |
(a)The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the Ameren Illinois segments for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Ameren Illinois |
| Three Months 2020: | | | | | | | |
| Revenues from alternative revenue programs | $ | (110) | | | $ | 3 | | | $ | 5 | | | $ | (102) | |
| Other revenues not from contracts with customers | 5 | | | 0 | | | 0 | | | 5 | |
| | | | | | | |
| Three Months 2019: | | | | | | | |
| Revenues from alternative revenue programs | $ | (145) | | | $ | 1 | | | $ | (12) | | | $ | (156) | |
| Other revenues not from contracts with customers | 1 | | | 1 | | | 0 | | | 2 | |
| | | | | | | |
| Nine Months 2020: | | | | | | | |
| Revenues from alternative revenue programs | $ | (59) | | | $ | 17 | | | $ | 29 | | | $ | (13) | |
| Other revenues not from contracts with customers | 6 | | | 1 | | | 0 | | | 7 | |
| | | | | | | |
| Nine Months 2019: | | | | | | | |
| Revenues from alternative revenue programs | $ | (111) | | | $ | 2 | | | $ | (26) | | | $ | (135) | |
| Other revenues not from contracts with customers | 5 | | | 2 | | | 0 | | | 7 | |
| | | | | | | |
(b)Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the three and nine months ended September 30, 2019, for a software licensing agreement with Ameren Missouri. See Note 8 – Related-party Transactions for additional information. | | | | | | | | | | | | | | | | | | | | | | | |
| Ameren Illinois Electric Distribution | | Ameren Illinois Natural Gas | | Ameren Illinois Transmission | | Ameren Illinois |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
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| Three Months 2021: | | | | | | | |
| Revenues from alternative revenue programs | $ | 61 | | | $ | 3 | | | $ | (1) | | | $ | 63 | |
| Other revenues not from contracts with customers | 3 | | | 1 | | | 0 | | | 4 | |
| | | | | | | |
| Three Months 2020: | | | | | | | |
| Revenues from alternative revenue programs | $ | 46 | | | $ | 11 | | | $ | 10 | | | $ | 67 | |
| Other revenues not from contracts with customers | 1 | | | 1 | | | 0 | | | 2 | |
| | | | | | | |
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the financial statements and Risk Factors contained in this Form 10-Q, as well as Management’s Discussion and Analysis of Financial Condition and Results of Operations and Risk Factors contained in the Form 10-K. We intend for this discussion to provide the reader with information that will assist in understanding our financial statements, the changes in certain key items in those financial statements, and the primary factors that accounted for those changes, as well as how certain accounting principles affect our financial statements. The discussion also provides information about the financial results of our business segments to provide a better understanding of how those segments and their results affect the financial condition and results of operations of Ameren as a whole. Also see the Glossary of Terms and Abbreviations at the front of this report and in the Form 10-K.
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Ameren has other subsidiaries that conduct other activities, such as providing shared services.
•Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
•Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois.
•ATXI operates a FERC rate-regulated electric transmission business in the MISO.
Ameren’s financial statements are prepared on a consolidated basis and therefore include the accounts of its majority-owned subsidiaries. All intercompany transactions have been eliminated, except as disclosed in Note 8 – Related-party Transactions.eliminated. Ameren Missouri and Ameren Illinois have no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.
In addition to presenting results of operations and earnings amounts in total, we present certain information in cents per share. These amounts reflect factors that directly affect Ameren’s earnings. We believe this per share information helps readers to understand the impact of these factors on Ameren’s earnings per share.
OVERVIEW
Net income attributable to Ameren common shareholdersshareholders in the three months ended September 30, 2020,March 31, 2021, was $367$233 million, or $1.47$0.91 per diluted share, compared with $364$146 million, or $1.47$0.59 per diluted share, in the year-ago period. Net income attributable to Ameren common shareholders in the nine months ended September 30, 2020, was $756 million, or $3.04 per diluted share, compared with $734 million, or $2.97 per diluted share, in the year-ago period. Net income for the three and nine months ended September 30, 2020,March 31, 2021, compared to the year-ago periods,period, was favorably affected by the results of Ameren Missouri’s March 2020 electric rate order, and infrastructure investments that drove higher earnings at Ameren Transmission and Ameren Illinois Electric Distribution.Distribution, and increased earnings at Ameren Illinois Natural Gas as a result of a change in rate design, which concentrates more revenues in the winter heating season due to an increase in volumetric rates and a decrease in fixed customer rates, and higher delivery service rates. Earnings for the three and nine months ended September 30, 2020,March 31, 2021, compared to the year-ago periods,period, were also favorably affected by lower other operations and maintenance expenses not subject to riders or regulatory tracking mechanisms, primarily due to lower electric system infrastructure maintenance expenses as a resultchanges in the value of decreased system load,company owned life insurance and disciplined cost management,management; increased Ameren Missouri electric retail sales, primarily resulting from colder winter temperatures experienced in 2021; and the deferral of projectsincreased income tax benefit at Ameren (parent) and Ameren Missouri due to future periods.timing differences associated with certain income tax benefits, which is not expected to materially impact full year results. Net income for the three and nine months ended September 30, 2020, compared to the year-ago periods, was unfavorably affected by lower revenues due to reduced MEEIA performance incentives; decreased electric retail sales at Ameren Missouri due to milder summer temperatures in 2020 and due, in part, to the COVID-19 pandemic; a lower recognized ROE at Ameren Illinois Electric Distribution; and higher net financing costs, primarily at Ameren (parent). Net income for the nine months ended September 30, 2020,March 31, 2021, compared to the year-ago period, was favorablyunfavorably affected by the result of the March 2021 FERC order, the absence in 2020 of expensesprimarily related to the Callaway Energy Center’s 2019 scheduled refuelinghistorical recovery of materials and maintenance outage,supplies inventories, increasedwhich decreased Ameren Transmission earnings resulting fromearnings; the May 2020 FERC order addressing the allowed base ROE,effect of dilution; and increased Ameren Illinois Natural Gas earnings from investments. Earnings for the nine months ended September 30, 2020, compared to the year-ago period, were unfavorably affected by decreased income tax benefitshigher financing costs at Ameren (parent) related to stock-based compensation..
Ameren’s strategic plan includes investing and operating its utilities in a manner consistent with existing regulatory frameworks, enhancing those frameworks, and advocating for responsible energy and economic policies, as well as creating and capitalizing on opportunities for investment for the benefit of its customers, shareholders, and the environment. Ameren remains focused on disciplined cost management and strategic capital allocation. Ameren believes it has constructive regulatory frameworks for investment at all of its utility businesses and invested $1.9$0.9 billion in thoseits rate-regulated businesses in the ninethree months ended September 30, 2020.March 31, 2021.
The COVID-19 pandemic continues to beaffect our results of operations, financial position, and liquidity, but we expect a rapidly evolving situation.gradual improvement in sales volumes in 2021, compared to 2020. In the first ninethree months of 2020, we experienced a net decrease in2021, our sales volumes were comparable to the same period in 2020, excluding the estimated effects of weather and customer energy-efficiency programs. However, we experienced an increase in our accounts receivable balances that were past due or that were a part of a deferred payment arrangement, and a decline in our cash collections from customers. The continued effect of the COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. Shelter-in-place orders began taking effect in our service territories in mid-March 2020. These orders generally required individuals to remain at home and precluded or limited the operation of businesses that were deemed nonessential. In early 2020, Ameren began implementing its business continuity plans, and continues to take measures to mitigate the risk of COVID-19 transmission. Actions included restricting travel for employees, implementing work-from-home policies, securing and supplying personal protective equipment, and implementing work practices to ensure the safety of our employees and customers, while maintaining social distancing. While our business operations were deemed essential and were not directly impacted by the shelter-in-place orders, approximately 65% of our workforce transitioned to remote working arrangements in mid-March 2020. In early June 2020, a small portion of our workforce began the process of returning to our work locations under a phased approach and approximately 50% of our workforce continues to work remotely. In mid-May 2020, shelter-in-place orders effective in our service territories began to be relaxed, with fewergeneral, restrictions on social activities and nonessential businesses beginning to reopen.implemented in our service territories in 2020 have been relaxed. However,
certain restrictions remain in place that limit individual activities and the operation of nonessential businesses. Additionalbusinesses and additional restrictions may be imposed in the future. We continue to assess the impacts the COVID-19 pandemic is having on our businesses, including impacts on electric and natural gas sales volumes, liquidity, bad debt expense, and supply chain operations. For further discussion of these and other matters, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report, and Results of Operations, Liquidity and Capital Resources, and Outlook sections below. In addition, for information regarding Ameren Missouri’s and Ameren Illinois’ suspension and subsequent reinstatement of customer disconnection activities and late fee charges for nonpayment, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.
In January 2021, Ameren Missouri acquired an up-to 300-MW wind generation project located in northwestern Missouri and partially placed it in service as the Atchison Renewable Energy Center. As of the date of this filing, Ameren Missouri has placed approximately half of the project in service, representing a purchase price of approximately $250 million, including an immaterial amount of transaction costs. Ameren Missouri expects the remaining MWs of the project to be in service by the end of September 2021. The Atchison Renewable Energy Center will support Ameren Missouri’s compliance with the Missouri renewable energy standard.
In February 2020,2021, Ameren Missouri filed an update to its Smart Energy Plan with the MoPSC, which includes a five-year capital investment overview with a detailed one-year plan for 2020.2021. The plan is designed to upgrade Ameren Missouri’s electric infrastructure and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $7.6$8.4 billion over the five-year period from 20202021 through 2024,2025, with expenditures largely eligible for recoveryrecoverable under the PISA and the RESRAM. These investments exclude incremental renewable generation investment opportunities of 950 megawatts by 2024, which are included in Ameren Missouri's 2020 IRP discussed below. The planned investments beyond 2023 included in the five-year range above2024 and 2025 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA.
In February 2020, the MoPSC issued an order approving a stipulation and agreement allowing Ameren Missouri to defer and amortize maintenance expenses related to scheduled refueling and maintenance outages at its Callaway Energy Center. Maintenance expenses associated with the fall 2020 refueling and maintenance outage are being deferred, as incurred, as a regulatory asset, and will be amortized after completion of the outage. Maintenance expenses will be amortized over the period between refueling and maintenance outages, which is approximately 18 months. Deferring and amortizing these expenses allows the timing of expense recognition to more closely align with revenues and mitigates future earnings volatility between outage and non-outage years.PISA through December 2028.
In March 2020, the MoPSC issued an order in2021, Ameren Missouri’s July 2019 electric service regulatory rate review, approving nonunanimous stipulation and agreements. The order resulted in a decrease of $32 million to Ameren Missouri's annual revenue requirement for electric retail service, which reflects infrastructure investments as of December 31, 2019. The order also provided for the continued use of the FAC and trackers for pension and postretirement benefits, uncertain income tax positions, and certain excess deferred income taxes that the MoPSC previously authorized in earlier electric rate orders. In addition, the order required Ameren Missouri to donate $8 million to low-income assistance programs, which was reflected in results of operations in the first quarter of 2020.The new rates became effective on April 1, 2020.
In August 2020, the MoPSC issued an order approving a unanimous stipulation and agreement with respect to the 2022 program year of Ameren Missouri’s six-year MEEIA 2019 program and related performance incentives. The order also approved Ameren Missouri’s energy savings results for the first year of the MEEIA 2019 program. As a result of this order and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $6 million in the third quarter of 2020.
In September 2020, Ameren Missouri filed its 2020 IRP with the MoPSC. In connection with the 2020 IRP filing, Ameren established a goal of achieving net-zero carbon emissions by 2050. Ameren is also targeting a 50% CO2 emission reduction by 2030 and an 85% reduction by 2040 from the 2005 level. The plan targets cleaner and more diverse sources of energy generation, including solar, wind, hydro, and nuclear power, and supports increased investment in new energy technologies. The plan, which is subject to review by the MoPSC, also includes expanding renewable sources by adding 3,100 megawatts of renewable generation by the end of 2030 and a total of 5,400 megawatts of renewable generation by 2040. These amounts include the 700 megawatts of wind generation projects discussed below, which are expected to be substantially complete in 2020 and fully in-service in early 2021, and will support Ameren Missouri’s compliance with the state of Missouri’s requirement of achieving 15% of native load sales from renewable energy sources by 2021, subject to customer rate increase limitations. Based on current and projected market prices for energy and for wind and solar generation technologies, among other factors, Ameren Missouri expects its ownership of these renewable resources would represent the lowest-cost option for customers. The plan also includes advancing the retirement dates of the Sioux and Rush Island coal-fired energy centers to 2028 and 2039, respectively, which are subject to the approval of a change in the assets’ depreciable lives by the MoPSC in a future regulatory rate review, the continued implementation of customer energy-efficiency programs, and the expectation that Ameren Missouri will seek an extension of the operating license for the Callaway Energy Center beyond its current 2044 expiration date. Additionally, the plan includes retiring the Meramec and Labadie coal-fired energy centers at the end of their useful lives, or by 2022 and 2042, respectively.
In October 2020, Ameren Missouri filed requests with the MoPSC for accounting authority orders related to its electric and natural gas services. The orders would allow Ameren Missouri to accumulate certain costs incurred related to the COVID-19 pandemic and forgone customer late fee revenues from March 2020 to June 2021, for potential recovery in future electric and natural gas service regulatory rate reviews. These costs would be net of any cost savings Ameren Missouri realizes as a result of the COVID-19 pandemic. The orders would also allow Ameren Missouri to accumulate bad debt write-offs incurred from March 2020 to September 2021 due to the COVID-19 pandemic, for potential recovery in future electric and natural gas service regulatory rate reviews. The requests include an estimated $9 million of costs incurred, net of savings, and forgone customer late fee revenues related to the COVID-19 pandemic from March 2020 through September
2020. The requests did not seek accumulation for potential recovery of forgone revenues associated with decreased sales volumes related to the COVID-19 pandemic. The MoPSC is under no deadline to issue orders, and Ameren Missouri cannot predict the ultimate outcome of these regulatory proceedings.
Construction on the new wind generation facilities continues to progress. Delays to the original construction schedule have occurred in 2020 due to changes in supply and construction activities. During the third quarter of 2020, all remaining wind turbine deliveries for the up-to 400-megawatt project were completed. Based on the construction schedule, Ameren Missouri expects this project to be placed in-service by the end of 2020. At this time, due to manufacturing, shipping, and other supply chain issues in 2020, and, based on an updated construction schedule from the developer, Ameren Missouri expects the up-to 300-megawatt project to be partially placed in-service by the end of 2020, and the remaining portion of the project, representing approximately $200 million of investment, to be placed in-service in the first quarter of 2021. Ameren Missouri and the developer of the up-to 300-megawatt project continue to monitor the impact to this project's schedule. In May 2020, the IRS issued guidance that extended the in-service date criteria to December 31, 2021, for qualifying for federal production tax credits. As a result of this extension, Ameren does not anticipate that delays in the completion of the wind generation facilities will affect Ameren’s ability to realize anticipated federal production tax credits.
In February 2020, Ameren Illinois filed a request with the ICCMoPSC seeking approval to increase its annual revenues for natural gas delivery service. In September 2020, Ameren Illinois filed a revised request seeking to increase its annual revenues for natural gas deliveryelectric service by $97 million, which includes an estimated $46 million of annual revenues that would otherwise be recovered under the QIP and other riders.$299 million. The electric rate increase request is based on a 10.5%9.9% ROE, a capital structure composed of 54.1%51.9% common equity, and a rate base of $2.1 billion. Ameren Illinois used$10.0 billion and a 2021 future test year in this proceeding. In Octoberended December 31, 2020, with certain pro-forma adjustments expected through an anticipated true-up date of September 30, 2021. The MoPSC proceeding relating to the ICC staff recommended an increaseproposed electric service rate changes will take place over a period of up to annual revenues for natural gas delivery service of $69 million, based on11 months, with a 9.3% ROE, a capital structure composed of 50.4% common equity, and a rate base of $2.1 billion. A decision by the ICC in this proceeding is required by January 2021, with new rates expected to be effective in February 2021. Ameren Illinois cannot predict the level of any delivery service rate change the ICC may approve, nor whether any rate change that may eventually be approved will be sufficient to enable Ameren Illinois to earn a reasonable return on investments when the rate changes go into effect.
In April 2020, Ameren Illinois filed its annual electric distribution service formula rate update with the ICC, requesting a reduction of $45 million in its rates. In September 2020, the ICC staff submitted its revised calculation of the revenue requirement included in Ameren Illinois’ update filing, recommending a $49 million decrease in Ameren Illinois’ electric distribution service rates. An ICC decision in this proceeding isMoPSC expected by December 2020, withFebruary 2022 and new rates effective January 2021.
In May 2020, in connection with customer complaint cases filed with the FERC relating to the allowed base ROE, the FERC issued an order addressing the requests for rehearing, which set the allowed base ROE at 10.02%, superseding the 9.88% previously ordered, and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The May 2020 order also denied rehearing of the FERC's dismissal of the February 2015 complaint case. In July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the May 2020 order to the United States Court of Appeals for the District of Columbia Circuit challenging the refunds required for the period from September 2016 to May 2020. The court is under no deadline to address the appeal.
For more information regarding Ameren Missouri’sby March 2020 electric rate order, the expected acquisition of wind generation facilities by Ameren Missouri, Ameren Illinois’ electric distribution service formula rate update, and legal proceedings related to the FERC allowed base ROE, see2022. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.report for additional information.
In March 2021, Ameren Missouri filed a request with the MoPSC seeking approval to increase its annual revenues for natural gas delivery service by $9 million. The natural gas rate increase request is based on a 9.8% ROE, a capital structure composed of 51.9% common equity, a rate base of $310 million, and a test year ended December 31, 2020, with certain pro-forma adjustments expected through an anticipated true-up date of September 30, 2021. The MoPSC proceeding relating to the proposed natural gas delivery service rate changes will take place over a period of up to 11 months with a decision by the MoPSC expected by February 2022 and new rates effective by March 2022.
In March 2021, the MoPSC issued orders approving nonunanimous stipulation and agreements related to Ameren Missouri’s electric and natural gas service accounting authority order requests. The orders allowed Ameren Missouri to accumulate $9 million of certain costs incurred related to the COVID-19 pandemic, net of cost savings, as well as forgone customer late fee and reconnection fee revenues from March 2020 to March 2021, for potential recovery in the electric and natural gas service regulatory rate reviews discussed above. As of March 31, 2021, Ameren Missouri deferred $5 million as a regulatory asset related to the accounting authority orders. If approved for recovery, Ameren Missouri would recognize the remaining $4 million associated with forgone customer late fee and reconnection fee revenue when billed to customers.
In March 2021, the ICC issued an order approving Ameren Illinois’ requested tariff to reconcile its electric distribution service revenue requirement for a period of up to two years after the final customer rate update under performance-based formula ratemaking. To utilize the reconciliation, the ICC-approved tariff requires Ameren Illinois to file a traditional regulatory rate review for its electric distribution service, which may be based on a future test year, by the end of March in the year following the last year in which an annual performance-based formula rate update was permitted. Pursuant to this order, and without legislative change or Ameren Illinois’ election to no longer use performance-based formula ratemaking, Ameren Illinois’ 2022 and 2023 revenues would reflect each year’s actual costs, year-end rate base, and 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 revenue requirement adjustment will be collected from, or refunded to, customers within two years from the end of the reconciled year.
In March 2021, Ameren Illinois filed with the ICC an energy-efficiency plan which includes annual investments in electric energy-efficiency programs up to approximately $100 million per year from 2022 through 2025. The ICC has the ability to reduce the amount of 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 performance-based formula ratemaking framework. A decision by the ICC in this proceeding is expected by September 2021.
In April 2021, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC, requesting an increase of $64 million in its rates. This update reflects an increase to the annual performance-based formula rate based on 2020 actual costs, an increase to include the 2020 revenue requirement reconciliation adjustment, and an increase for the conclusion of the 2019 revenue requirement reconciliation adjustment, which will be fully refunded to customers in 2021, consistent with the ICC’s December 2020 annual update filing order. It also reflects an increase based on expected net plant additions for 2021. An ICC decision in this proceeding is expected by December 2021, with new rates effective January 2022.
RESULTS OF OPERATIONS
Our results of operations and financial position are affected by many factors. Economic conditions, including those resulting from the COVID-19 pandemic discussed below, energy-efficiency investments by our customers and by us, technological advances, distributed generation, and the actions of key customers can significantly affect the demand for our services. Ameren and Ameren Missouri results are also affected by seasonal fluctuations in winter heating and summer cooling demands, as well as by non-nuclear energy center maintenance outages. Additionally, fluctuations in interest rates and conditions in the capital and credit markets affect our cost of borrowing, and our pension and postretirement benefits costs. Almost all of Ameren’s revenues are subject to state or federal regulation. This regulation has a material impact on the rates we charge customers for our services. Our results of operations, financial position, and liquidity are affected by our ability to align our overall spending, both operating and capital, with the frameworks established by our regulators. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for additional information regarding Ameren Missouri’s, Ameren Illinois’, and ATXI’s regulatory mechanisms.
We continue to assess the impacts of the COVID-19 pandemic on our businesses, including impacts on electric and natural gas sales volumes, supply chain operations, and bad debt expense. Ameren Missouri and Ameren Illinois suspended customer disconnections and late fee charges for nonpayment in mid-March 2020 and resumed these activities in the third quarter of 2020. For additional information, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.Regarding uncollectible accounts receivable, Ameren Illinois’ electric distribution and natural gas distribution businesses have bad debt riders, which provide for recovery of bad debt write-offs, net of any subsequent recoveries. Pursuant to a June 2020 ICC order, Ameren Illinois’ electric bad debt rider provides for the recovery of bad debt
expense in 2020. Ameren Missouri does not have a bad debt rider or regulatory tracking mechanismtracker, and thus its earnings are exposed to increases in bad debt expense. In October 2020,expense, absent regulatory relief. However, Ameren Missouri filed requests with the MoPSC for accounting authority orders relateddoes not expect a material impact to costs incurred, net of savings, and forgone customer late fee revenues resultingearnings from the COVID-19 pandemic.increases in bad debt expense. As of September 30, 2020,March 31, 2021, accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement represented 26%27%, 18%19%, and 35%32%, or $151$137 million, $49$33 million, and $102$104 million, of Ameren’s, Ameren Missouri’s, and Ameren Illinois’
customer trade receivables before allowance for doubtful accounts, respectively. As of September 30, 2019,March 31, 2020, these percentages were 13%21%, 9%16%, and 18%25%, or $65$99 million, $23$29 million, and $42$70 million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively. Ameren Missouri's electric sales volumes have been, and continue to be, affected by the COVID-19 pandemic. In the three and nine months ended September 30, 2020,March 31, 2021, compared to the same periodsperiod in 2019,2020, Ameren Missouri experienced a reduction in commercial and industrial electric sales volumes, partially offset by increased electric sales volumes to higher margin residential customers, excluding the estimated effects of weather and customer energy-efficiency programs. While the impacts of the COVID-19 pandemic are difficult to predict, Ameren Missouri expects the net reduction in sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs, to continue in the fourth quarter of 2020, compared to the same period in 2019. The COVID-19 pandemic may continue to affect Ameren Missouri’s total electric sales volumes and sales volumes by customer class beyond 2020. Assuming a ratable change in Ameren Missouri’s electric sales volumes by month, a 1% change for the calendar year 2020 to residential, commercial, and industrial customers would affect earnings per diluted share by approximately 3 cents, 2 cents, and a half-cent, respectively. The actual change in earnings per diluted share will be affected by the timing of sales volume changes due to seasonal customer rates. Based on Ameren Missouri’s current projections, and assuming no significant additional restrictions are placed on individuals and businesses in our service territories, the net decline in electric sales volumes for October 1 through December 31, 2020, compared to the same period in 2019, excluding the estimated effects of weather and customer energy-efficiency programs, is expected to result in a decline in earnings per diluted share of approximately 1 cent. The following table provides the approximate increases and (decreases) in Ameren Missouri electric sales volumes by customer class for the three and nine months ended September 30, 2020, and the estimated changes for the calendar year 2020,March 31, 2021, compared to the same periodsperiod in 2019,2020, excluding the estimated effects of weather and customer energy-efficiency programs:
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | Calendar Year (a) |
| | | | | | QTD YoY | | YTD YoY | |
| Residential | | | | | | 2.0 | % | | 3.5 | % | | 3.5 | % |
| Commercial | | | | | | (7.5) | % | | (7.5) | % | | (6.5) | % |
| Industrial | | | | | | (0.5) | % | | (4.0) | % | | (3.0) | % |
| Total | | | | | | (2.5) | % | | (2.5) | % | | (2.0) | % |
| | | | | | | | | | |
(a) Based on actual results from January 1 through September 30, | | | | | | | | | | | | | | | | | |
| | | | | | Three months ended March 31, 2021, versus same period in 2020 and Ameren Missouri’s projection for October 1 through December 31, 2020, compared to the same periods in 2019.Ameren Illinois also experienced decreases in electric and natural gas sales volumes in the three and nine months ended September 30, 2020. However, Ameren Illinois’ electric distribution and transmission businesses have formula ratemaking frameworks, which provide for recovery of their revenue requirements independent of sales volumes, and Ameren Illinois' natural gas distribution business has a VBA, which provides for recovery of the natural gas distribution service revenue requirement associated with sales volumes for residential and small nonresidential customers. Additionally, ATXI’s electric transmission business has a formula ratemaking framework, which provides for recovery of its revenue requirement independent of sales volumes. None of Ameren’s businesses have experienced significant disruptions to their supply chain operations. However, see Note 2 – Rate and Regulatory Mattersunder Part I, Item 1, of this report for information regarding the impact of supply chain disruptions related to Ameren Missouri’s acquisition of an up-to 300-megawatt wind generation facility.
| | | |
| Ameren Missouri Customer Class | | | | | | | | | |
| Residential | | | | | | | | 2.7 | % | | | |
| Commercial | | | | | | | | (2.8) | % | | | |
| Industrial | | | | | | | | (1.2) | % | | | |
| Total | | | | | | | | (0.1) | % | | | |
| | | | | | | | | | | |
Ameren Missouri principally uses coal and enriched uranium for fuel in its electric operations and purchases natural gas for its customers. Ameren Illinois purchases power and natural gas for its customers. The prices for these commodities can fluctuate significantly because of the global economic and political environment, weather, supply, demand, and many other factors. We have natural gas cost recovery mechanisms for our Illinois and Missouri natural gas distribution businesses, a purchased power cost recovery mechanism for Ameren Illinois’ electric distribution business, and a FAC for Ameren Missouri’s electric business.
We employ various risk management strategies to reduce our exposure to commodity risk and other risks inherent in our business. The reliability of Ameren Missouri’s energy centers and our transmission and distribution systems, and the level and timing of operations and maintenance costs and capital investment, are key factors that we seek to manage in order to optimize our results of operations, financial position, and liquidity.
Earnings Summary
The following table presents a summary of Ameren’s earnings for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Three Months | | Nine Months | | Three Months |
| | 2020 | | 2019 | | 2020 | | 2019 | | 2021 | | 2020 |
| Net income attributable to Ameren common shareholders | Net income attributable to Ameren common shareholders | $ | 367 | | | $ | 364 | | | $ | 756 | | | $ | 734 | | Net income attributable to Ameren common shareholders | | $ | 233 | | | $ | 146 | |
Earnings per common share – diluted | Earnings per common share – diluted | 1.47 | | | 1.47 | | | 3.04 | | | 2.97 | | Earnings per common share – diluted | | 0.91 | | | 0.59 | |
Net income attributable to Ameren common shareholders increased $3$87 million with comparable earnings per diluted share, in the three months ended September 30, 2020,March 31, 2021, compared with the year-ago period. The increase was due to net income increases of $20 million, $9 million, $3and $1 million and$2 million at Ameren Transmission, Ameren Illinois Natural Gas, and Ameren Illinois Electric Distribution, respectively. These increases were partially offset by a net income decrease of $3 million at Ameren Missouri and an $8 million increase in the net loss for activity not reported as part of a segment, primarily at Ameren (parent).
Net, respectively. Additionally, Ameren Missouri had net income attributableof $47 million, compared to Ameren common shareholders increased $22a net loss of $10 million or 7 cents per diluted share, in the nine months ended September 30, 2020, compared with the year-ago period. The increase was due to net income increases of $29 million, $9 million, and $2 million at Ameren Transmission, Ameren Illinois Natural Gas, and Ameren Illinois Electric Distribution, respectively. These increases were partially offset by a net income decrease of $7 million at Ameren Missouri and an $11 million increasesame period in the net loss for activity not reported as part of a segment, primarily at Ameren (parent).2020.
Earnings per diluted share were favorably affected in the three and nine months ended September 30, 2020,March 31, 2021, compared to the year-ago periods period(except where a specific period is referenced), by:
•lowerthe results of the March 2020 MoPSC electric rate order, as discussed in Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K, which reduced the base level of expenses at Ameren Missouri, partially offset by lower base rates, net of recovery for amounts associated with the reduction in sales volumes resulting from MEEIA programs and recoverable depreciation under the PISA at Ameren Missouri pursuant to the March 2020 MoPSC electric rate order as discussed in Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report (8 cents and 15(10 cents per share, respectively);
•increased Ameren Transmission and Ameren Illinois Electric Distribution earnings due to additional rate base investments, including energy-efficiency investments at Ameren Illinois (3 cents and 11 cents per share, respectively)share);
•decreased other operations and maintenance expenses related to the absence of a scheduled refueling and maintenance outage at the Callaway Energy Center, which last occurred in the second quarter of 2019 and which costs previously were expensed as incurred, as compared with the deferral of expenses for the fall 2020 refueling and maintenance outage under the February 2020 MoPSC order (10 cents per share for the nine months ended September 30, 2020);
•decreased other operations and maintenance expensesexpense not subject to riders or regulatory tracking mechanisms, excluding decreasedand trackers, primarily due to changes in the cash surrender value of company-owned life insurance and disciplined cost management, partially offset by 2 cents per share due to amortization of costs associated with the Callaway Energy Center’s scheduled refueling and maintenance outage, primarily due to lower electric system infrastructure maintenance expenses as a result of decreased system load, disciplined cost management, and the deferral of projects to future periods, and changes completed in the cash surrender value of company-owned life insurance, which increased in the three months ended September 30, 2020 but decreased in the nine months ended September 30, 2020 (4 cents and 5(6 cents per share, respectively)share);
•increased rate base investments and a higher recognized ROE, which increased earnings at Ameren Transmission earnings resulting fromand Ameren Illinois Electric Distribution (5 cents per share);
•increased income tax benefit at Ameren (parent), primarily due to increased interim period income tax benefits in 2021 related to wind generation facilities, and at Ameren Missouri primarily due to year-over-year timing differences associated with the May 2020 FERC order addressing the allowed base ROE for FERC regulated transmission rate base under the MISO tariffrecognition of excess deferred income taxes, both of which are not expected to materially impact full year results (4 cents per shareshare);
•the impact of weather on electric retail sales at Ameren Missouri, primarily resulting from colder winter temperatures experienced in 2021 (estimated at 4 cents per share);
•a change in rate design pursuant to the ICC's January 2021 natural gas rate order that concentrates more revenues in the winter heating season due to an increase in volumetric rates, which increased margins at Ameren Illinois Natural Gas for the ninethree months ended September 30, 2020)March 31, 2021, but is not expected to materially impact full year results (4 cents per share);
•higher base rates pursuant to the ICC's January 2021 natural gas rate order, which increased margins at Ameren Illinois Natural Gas (3 cents per share); and
•increased other income, net, at Ameren Illinois Natural Gas earnings from investmentsMissouri due to the absence of charitable donations made in qualifying infrastructure recovered under2020 pursuant to the QIP rider (1 cent and 3March 2020 electric rate order (2 cents per share, respectively)share).
Earnings per diluted share were unfavorably affected in the three and nine months ended September 30, 2020,March 31, 2021, compared to the year-ago periods (except where a specific period, is referenced), by:
•lower MEEIA performance incentives recognized at Ameren Missouri (3 cents and 9 cents per share, respectively);
•decreased electric retail sales, excluding the estimated effects of weather, at Ameren Missouri due to decreased sales volumes and demand charge revenue from commercial and industrial customers, partially offset by increased sales volumes to higher margin residential customers. Demand was affected, in part, by the COVID-19 pandemic (2 cents and 8 cents per share, respectively);
•decreased electric retail sales at Ameren Missouri due to weather, primarily resulting from milder summer temperatures experienced in 2020 (estimated at 5 cents and 6 cents per share, respectively);
•decreased Ameren Illinois Electric Distribution earnings under performance-based formula ratemaking because of a lower recognized ROE driven by lower annual average monthly yields on 30-year United States Treasury bonds (1 cent and 5 cents per share, respectively);
•increased net financing costs primarily at Ameren (parent), primarily because of its April 2020 debt issuance (3 cents and 5 cents per share, respectively);
•lower margins at Ameren Missouri including decreased revenues from customer late fees and reconnection fees, and transmission service charges due, in part, to the COVID-19 pandemic (1 cent and 3 cents per share, respectively);
•decreased income tax benefits at Ameren (parent) related to stock-based compensation (3 cents per share for the nine months ended September 30, 2020);
•increased charitable donations at Ameren Missouri pursuant to its March 2020 electric rate order (2 cents per share for the nine months ended September 30, 2020);
•increased depreciation and amortization expenses not subject to riders or regulatory tracking mechanisms at Ameren Missouri and Ameren Illinois Natural Gas, primarily due to additional property, plant, and equipment investments (1 cent and 2 cents per share, respectively); and
•increased weighted-average basic common shares outstanding (1 cent and 2the effect of dilution (4 cents per share, respectively)share);
•the result of the March 2021 FERC order, primarily related to the historical recovery of materials and supplies inventories, which decreased Ameren Transmission earnings (3 cents per share); and
•increased net financing costs at Ameren (parent), primarily due to higher long-term debt balances (2 cents per share).
The cents per share information presented is based on the weighted-average basic common shares outstanding in the three and nine months ended September 30, 2019,March 31, 2020, and does not reflect any change in earnings per share resulting from dilution, unless otherwise noted. Amounts other than variances related to income taxes have been presented net of income taxes using Ameren’s 20202021 statutory tax rate of 26%. For additional details regarding the Ameren Companies’ results of operations, including explanations of Electric and Natural Gas Margins, Other Operations and Maintenance Expenses, Depreciation and Amortization Expenses, Taxes Other Than Income Taxes, Other Income, Net, Interest Charges, and Income Taxes, see the major headings below.
Below is Ameren’s table of income statement components by segment for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Ameren
Missouri | | Ameren
Illinois
Electric
Distribution | | Ameren
Illinois
Natural Gas | | Ameren Transmission | | Other /
Intersegment
Eliminations | | Ameren | | Ameren
Missouri | | Ameren
Illinois
Electric
Distribution | | Ameren
Illinois
Natural Gas | | Ameren Transmission | | Other /
Intersegment
Eliminations | | Ameren |
| Three Months 2020: | | |
| | Three Months 2021: | | Three Months 2021: | |
| Electric margins | Electric margins | $ | 795 | | | $ | 279 | | | $ | — | | | $ | 141 | | | $ | (7) | | | $ | 1,208 | | Electric margins | $ | 488 | | | $ | 289 | | | $ | — | | | $ | 130 | | | $ | (7) | | | $ | 900 | |
| Natural gas margins | Natural gas margins | 12 | | | — | | | 93 | | | — | | | — | | | 105 | | Natural gas margins | 32 | | | — | | | 213 | | | — | | | — | | | 245 | |
| | Other operations and maintenance expenses | Other operations and maintenance expenses | (221) | | | (133) | | | (52) | | | (14) | | | 2 | | | (418) | | Other operations and maintenance expenses | (225) | | | (125) | | | (56) | | | (16) | | | 2 | | | (420) | |
| | Depreciation and amortization expenses | Depreciation and amortization expenses | (154) | | | (71) | | | (21) | | | (25) | | | (2) | | | (273) | | Depreciation and amortization expenses | (156) | | | (75) | | | (22) | | | (28) | | | — | | | (281) | |
| Taxes other than income taxes | Taxes other than income taxes | (92) | | | (21) | | | (11) | | | (2) | | | (2) | | | (128) | | Taxes other than income taxes | (77) | | | (20) | | | (25) | | | (2) | | | (4) | | | (128) | |
| Other income, net | Other income, net | 26 | | | 9 | | | 4 | | | 4 | | | 5 | | | 48 | | Other income, net | 23 | | | 8 | | | 3 | | | 3 | | | 9 | | | 46 | |
| Interest charges | Interest charges | (50) | | | (19) | | | (10) | | | (19) | | | (12) | | | (110) | | Interest charges | (39) | | | (18) | | | (10) | | | (23) | | | (10) | | | (100) | |
| Income taxes | (18) | | | (10) | | | (1) | | | (22) | | | (12) | | | (63) | | |
| Income (taxes) benefit | | Income (taxes) benefit | 2 | | | (12) | | | (28) | | | (17) | | | 28 | | | (27) | |
| | Net income (loss) | 298 | | | 34 | | | 2 | | | 63 | | | (28) | | | 369 | | |
| Net income | | Net income | 48 | | | 47 | | | 75 | | | 47 | | | 18 | | | 235 | |
Noncontrolling interests – preferred stock dividends | Noncontrolling interests – preferred stock dividends | (1) | | | — | | | — | | | (1) | | | — | | | (2) | | Noncontrolling interests – preferred stock dividends | (1) | | | (1) | | | — | | | — | | | — | | | (2) | |
| Net income (loss) attributable to Ameren common shareholders | $ | 297 | | | $ | 34 | | | $ | 2 | | | $ | 62 | | | $ | (28) | | | $ | 367 | | |
| Three Months 2019: | | |
| Electric margins | $ | 844 | | | $ | 270 | | | $ | — | | | $ | 128 | | | $ | (9) | | | $ | 1,233 | | |
| Natural gas margins | 13 | | | — | | | 87 | | | — | | | — | | | 100 | | |
| | Other operations and maintenance expenses | (242) | | | (128) | | | (52) | | | (15) | | | 3 | | | (434) | | |
| | Depreciation and amortization expenses | (138) | | | (68) | | | (20) | | | (21) | | | (1) | | | (248) | | |
| Taxes other than income taxes | (96) | | | (22) | | | (10) | | | (1) | | | (2) | | | (131) | | |
| Other income, net | 15 | | | 9 | | | 3 | | | 2 | | | 5 | | | 34 | | |
| Interest charges | (44) | | | (19) | | | (9) | | | (20) | | | (4) | | | (96) | | |
| Income taxes | (51) | | | (10) | | | — | | | (19) | | | (12) | | | (92) | | |
| | Net income (loss) | 301 | | | 32 | | | (1) | | | 54 | | | (20) | | | 366 | | |
Noncontrolling interests – preferred stock dividends | (1) | | | — | | | — | | | (1) | | | — | | | (2) | | |
| Net income (loss) attributable to Ameren common shareholders | $ | 300 | | | $ | 32 | | | $ | (1) | | | $ | 53 | | | $ | (20) | | | $ | 364 | | |
| Nine Months 2020: | | |
| Net income attributable to Ameren common shareholders | | Net income attributable to Ameren common shareholders | $ | 47 | | | $ | 46 | | | $ | 75 | | | $ | 47 | | | $ | 18 | | | $ | 233 | |
| Three Months 2020: | | Three Months 2020: | |
| Electric margins | Electric margins | $ | 1,862 | | | $ | 823 | | | $ | — | | | $ | 400 | | | $ | (22) | | | $ | 3,063 | | Electric margins | $ | 452 | | | $ | 280 | | | $ | — | | | $ | 123 | | | $ | (9) | | | $ | 846 | |
| Natural gas margins | Natural gas margins | 58 | | | — | | | 379 | | | — | | | — | | | 437 | | Natural gas margins | 31 | | | — | | | 182 | | | — | | | — | | | 213 | |
| | Other operations and maintenance expenses | Other operations and maintenance expenses | (662) | | | (381) | | | (161) | | | (43) | | | 7 | | | (1,240) | | Other operations and maintenance expenses | (239) | | | (130) | | | (57) | | | (14) | | | 2 | | | (438) | |
| | Depreciation and amortization expenses | Depreciation and amortization expenses | (448) | | | (213) | | | (62) | | | (72) | | | (4) | | | (799) | | Depreciation and amortization expenses | (139) | | | (71) | | | (21) | | | (24) | | | — | | | (255) | |
| Taxes other than income taxes | Taxes other than income taxes | (254) | | | (59) | | | (46) | | | (6) | | | (7) | | | (372) | | Taxes other than income taxes | (79) | | | (19) | | | (22) | | | (2) | | | (3) | | | (125) | |
| Other income, net | Other income, net | 55 | | | 25 | | | 11 | | | 9 | | | 17 | | | 117 | | Other income, net | 4 | | | 7 | | | 2 | | | 2 | | | 6 | | | 21 | |
| Interest charges | Interest charges | (140) | | | (55) | | | (30) | | | (58) | | | (28) | | | (311) | | Interest charges | (40) | | | (18) | | | (10) | | | (21) | | | (4) | | | (93) | |
| Income (taxes) benefit | Income (taxes) benefit | (29) | | | (32) | | | (24) | | | (61) | | | 12 | | | (134) | | Income (taxes) benefit | 1 | | | (11) | | | (19) | | | (17) | | | 25 | | | (21) | |
| | Net income (loss) | Net income (loss) | 442 | | | 108 | | | 67 | | | 169 | | | (25) | | | 761 | | Net income (loss) | (9) | | | 38 | | | 55 | | | 47 | | | 17 | | | 148 | |
Noncontrolling interests – preferred stock dividends | Noncontrolling interests – preferred stock dividends | (3) | | | (1) | | | (1) | | | (1) | | | 1 | | | (5) | | Noncontrolling interests – preferred stock dividends | (1) | | | (1) | | | — | | | — | | | — | | | (2) | |
| Net income (loss) attributable to Ameren common shareholders | Net income (loss) attributable to Ameren common shareholders | $ | 439 | | | $ | 107 | | | $ | 66 | | | $ | 168 | | | $ | (24) | | | $ | 756 | | Net income (loss) attributable to Ameren common shareholders | $ | (10) | | | $ | 37 | | | $ | 55 | | | $ | 47 | | | $ | 17 | | | $ | 146 | |
| Nine Months 2019: | | |
| Electric margins | $ | 1,948 | | | $ | 804 | | | $ | — | | | $ | 351 | | | $ | (24) | | | $ | 3,079 | | |
| Natural gas margins | 57 | | | — | | | 373 | | | — | | | — | | | 430 | | |
| | Other operations and maintenance expenses | (720) | | | (373) | | | (170) | | | (44) | | | 6 | | | (1,301) | | |
| | Depreciation and amortization expenses | (417) | | | (204) | | | (59) | | | (62) | | | (3) | | | (745) | | |
| Taxes other than income taxes | (256) | | | (61) | | | (47) | | | (3) | | | (8) | | | (375) | | |
| Other income, net | 43 | | | 25 | | | 9 | | | 6 | | | 16 | | | 99 | | |
| Interest charges | (136) | | | (54) | | | (28) | | | (58) | | | (14) | | | (290) | | |
| Income (taxes) benefit | (70) | | | (31) | | | (20) | | | (50) | | | 13 | | | (158) | | |
| | Net income (loss) | 449 | | | 106 | | | 58 | | | 140 | | | (14) | | | 739 | | |
Noncontrolling interests – preferred stock dividends | (3) | | | (1) | | | (1) | | | (1) | | | 1 | | | (5) | | |
| Net income (loss) attributable to Ameren common shareholders | $ | 446 | | | $ | 105 | | | $ | 57 | | | $ | 139 | | | $ | (13) | | | $ | 734 | | |
Below is Ameren Illinois’ table of income statement components by segment for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | Ameren
Illinois
Electric
Distribution | | Ameren
Illinois
Natural Gas | | Ameren
Illinois Transmission | | | Ameren Illinois | |
| Three Months 2020: | | | | |
| Electric and natural gas margins | $ | 279 | | | $ | 93 | | | $ | 91 | | | | $ | 463 | | |
| | Other operations and maintenance expenses | (133) | | | (52) | | | (12) | | | | (197) | | |
| Depreciation and amortization expenses | (71) | | | (21) | | | (17) | | | | (109) | | |
| Taxes other than income taxes | (21) | | | (11) | | | (1) | | | | (33) | | |
| Other income, net | 9 | | | 4 | | | 4 | | | | 17 | | |
| Interest charges | (19) | | | (10) | | | (10) | | | | (39) | | |
| Income taxes | (10) | | | (1) | | | (14) | | | | (25) | | |
| | Net income attributable to common shareholder | $ | 34 | | | $ | 2 | | | $ | 41 | | | | $ | 77 | | |
| Three Months 2019: | | | | |
| Electric and natural gas margins | $ | 270 | | | $ | 87 | | | $ | 81 | | | | $ | 438 | | |
| | Other operations and maintenance expenses | (128) | | | (52) | | | (13) | | | | (193) | | |
| Depreciation and amortization expenses | (68) | | | (20) | | | (14) | | | | (102) | | |
| Taxes other than income taxes | (22) | | | (10) | | | (1) | | | | (33) | | |
| Other income, net | 9 | | | 3 | | | 1 | | | | 13 | | |
| Interest charges | (19) | | | (9) | | | (10) | | | | (38) | | |
| Income taxes | (10) | | | — | | | (10) | | | | (20) | | |
| | | | Ameren
Illinois
Electric
Distribution | | Ameren
Illinois
Natural Gas | | Ameren
Illinois Transmission | | | Ameren Illinois |
| | Net income (loss) attributable to common shareholder | $ | 32 | | | $ | (1) | | | $ | 34 | | | | $ | 65 | | |
| Nine Months 2020: | | | | |
| | Three Months 2021: | | Three Months 2021: | | | |
| Electric and natural gas margins | Electric and natural gas margins | $ | 823 | | | $ | 379 | | | $ | 252 | | | | $ | 1,454 | | Electric and natural gas margins | $ | 289 | | | $ | 213 | | | $ | 81 | | | | $ | 583 | |
| | Other operations and maintenance expenses | Other operations and maintenance expenses | (381) | | | (161) | | | (36) | | | | (578) | | Other operations and maintenance expenses | (125) | | | (56) | | | (13) | | | | (194) | |
| Depreciation and amortization expenses | Depreciation and amortization expenses | (213) | | | (62) | | | (48) | | | | (323) | | Depreciation and amortization expenses | (75) | | | (22) | | | (18) | | | | (115) | |
| Taxes other than income taxes | Taxes other than income taxes | (59) | | | (46) | | | (2) | | | | (107) | | Taxes other than income taxes | (20) | | | (25) | | | (1) | | | | (46) | |
| Other income, net | Other income, net | 25 | | | 11 | | | 9 | | | | 45 | | Other income, net | 8 | | | 3 | | | 3 | | | | 14 | |
| Interest charges | Interest charges | (55) | | | (30) | | | (31) | | | | (116) | | Interest charges | (18) | | | (10) | | | (14) | | | | (42) | |
| Income taxes | Income taxes | (32) | | | (24) | | | (37) | | | | (93) | | Income taxes | (12) | | | (28) | | | (10) | | | | (50) | |
| | Net income | Net income | 108 | | | 67 | | | 107 | | | | 282 | | Net income | 47 | | | 75 | | | 28 | | | | 150 | |
| Preferred stock dividends | Preferred stock dividends | (1) | | | (1) | | | — | | | | (2) | | Preferred stock dividends | (1) | | | — | | | — | | | | (1) | |
| Net income attributable to common shareholder | Net income attributable to common shareholder | $ | 107 | | | $ | 66 | | | $ | 107 | | | | $ | 280 | | Net income attributable to common shareholder | $ | 46 | | | $ | 75 | | | $ | 28 | | | | $ | 149 | |
| Nine Months 2019: | | | | |
| Three Months 2020: | | Three Months 2020: | | | |
| Electric and natural gas margins | Electric and natural gas margins | $ | 804 | | | $ | 373 | | | $ | 217 | | | | $ | 1,394 | | Electric and natural gas margins | $ | 280 | | | $ | 182 | | | $ | 74 | | | | $ | 536 | |
| | Other operations and maintenance expenses | Other operations and maintenance expenses | (373) | | | (170) | | | (37) | | | | (580) | | Other operations and maintenance expenses | (130) | | | (57) | | | (12) | | | | (199) | |
| Depreciation and amortization expenses | Depreciation and amortization expenses | (204) | | | (59) | | | (41) | | | | (304) | | Depreciation and amortization expenses | (71) | | | (21) | | | (15) | | | | (107) | |
| Taxes other than income taxes | Taxes other than income taxes | (61) | | | (47) | | | (2) | | | | (110) | | Taxes other than income taxes | (19) | | | (22) | | | (1) | | | | (42) | |
| Other income, net | Other income, net | 25 | | | 9 | | | 5 | | | | 39 | | Other income, net | 7 | | | 2 | | | 2 | | | | 11 | |
| Interest charges | Interest charges | (54) | | | (28) | | | (29) | | | | (111) | | Interest charges | (18) | | | (10) | | | (11) | | | | (39) | |
| Income taxes | Income taxes | (31) | | | (20) | | | (28) | | | | (79) | | Income taxes | (11) | | | (19) | | | (9) | | | | (39) | |
| | Net income | Net income | 106 | | | 58 | | | 85 | | | | 249 | | Net income | 38 | | | 55 | | | 28 | | | | 121 | |
| Preferred stock dividends | Preferred stock dividends | (1) | | | (1) | | | — | | | | (2) | | Preferred stock dividends | (1) | | | — | | | — | | | | (1) | |
| | Net income attributable to common shareholder | Net income attributable to common shareholder | $ | 105 | | | $ | 57 | | | $ | 85 | | | | $ | 247 | | Net income attributable to common shareholder | $ | 37 | | | $ | 55 | | | $ | 28 | | | | $ | 120 | |
Electric and Natural Gas Margins
Electric margins are defined as electric revenues less fuel and purchased power costs. Natural gas margins are defined as natural gas revenues less natural gas purchased for resale. We consider electric and natural gas margins useful measures to analyze the change in profitability of our electric and natural gas operations between periods. We have included the analysis below to complement the financial information we provide in accordance with GAAP. However, these margins may not be a presentation defined under GAAP, and they may not be comparable to other companies’ presentations or more useful than the GAAP information we provide elsewhere in this report.
Electric Margins
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment(a) | | Increase (Decrease) by Segment |
| | | Overall Ameren DecreaseIncrease of $25$54 Million (QTD YoY) | | Overall Ameren Decrease of $16 Million (YTD YoY) | |
| | | | |
(a)Includes other/intersegment eliminations of $(7) million and $(9) million in the three months ended September 30, 2020,March 31, 2021 and 2019, respectively. Also includes other/intersegment eliminations of $(22) million and $(24) million in the nine months ended September 30, 2020,and 2019, respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Electric Distribution | | Ameren Transmission | | | Other/Intersegment Eliminations | |
Natural Gas Margins
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment | | Increase (Decrease) by Segment |
| | | Overall Ameren Increase of $5$32 Million (QTD YoY) | | Overall Ameren Increase of $7 Million (YTD YoY) | |
| | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | |
The following tablestable present the favorable (unfavorable) variations by Ameren segment for electric and natural gas margins for the three and nine months ended September 30, 2020,March 31, 2021, compared with the year-ago periods:period:
| | | Three Months | Three Months | Ameren Missouri | | Ameren Illinois
Electric Distribution | | Ameren Illinois
Natural Gas | | Ameren Transmission(a) | | Other /Intersegment Eliminations | | Ameren | | Three Months | Ameren Missouri | | Ameren Illinois
Electric Distribution | | Ameren Illinois
Natural Gas | | Ameren Transmission(a) | | Other /Intersegment Eliminations | | Ameren | |
| Electric revenue change: | Electric revenue change: | | | Electric revenue change: | | |
Effect of weather (estimate)(b) | Effect of weather (estimate)(b) | $ | (23) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (23) | | | Effect of weather (estimate)(b) | $ | 18 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 18 | | |
Base rates (estimate)(c) | Base rates (estimate)(c) | (34) | | | 1 | | | — | | | 13 | | | — | | | (20) | | | Base rates (estimate)(c) | (6) | | | 3 | | | — | | | 7 | | | — | | | 4 | | |
| | Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA) | Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA) | (7) | | | — | | | — | | | — | | | — | | | (7) | | | Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA) | (3) | | | — | | | — | | | — | | | — | | | (3) | | |
| Customer demand charges | (4) | | | — | | | — | | | — | | | — | | | (4) | | | |
| MEEIA 2013, MEEIA 2016, and MEEIA 2019 performance incentives | (11) | | | — | | | — | | | — | | | — | | | (11) | | | |
| Off-system sales | 33 | | | — | | | — | | | — | | | — | | | 33 | | | |
| | Off-system sales, capacity and FAC revenues, net | | Off-system sales, capacity and FAC revenues, net | (4) | | | — | | | — | | | — | | | — | | | (4) | | |
| Energy-efficiency program investments | Energy-efficiency program investments | — | | | 2 | | | — | | | — | | | — | | | 2 | | | Energy-efficiency program investments | — | | | 3 | | | — | | | — | | | — | | | 3 | | |
| Other | Other | — | | | 3 | | | — | | | — | | | 2 | | | 5 | | | Other | (4) | | | 4 | | | — | | | — | | | (2) | | | (2) | | |
Cost recovery mechanisms – offset in fuel and purchased power(d) | Cost recovery mechanisms – offset in fuel and purchased power(d) | — | | | (6) | | | — | | | — | | | — | | | (6) | | | Cost recovery mechanisms – offset in fuel and purchased power(d) | 3 | | | 12 | | | — | | | — | | | — | | | 15 | | |
Other cost recovery mechanisms(e) | Other cost recovery mechanisms(e) | (10) | | | 2 | | | — | | | — | | | — | | | (8) | | | Other cost recovery mechanisms(e) | 6 | | | (1) | | | — | | | — | | | — | | | 5 | | |
| Total electric revenue change | Total electric revenue change | $ | (56) | | | $ | 2 | | | $ | — | | | $ | 13 | | | $ | 2 | | | $ | (39) | | | Total electric revenue change | $ | 10 | | | $ | 21 | | | $ | — | | | $ | 7 | | | $ | (2) | | | $ | 36 | | |
| Fuel and purchased power change: | Fuel and purchased power change: | | | Fuel and purchased power change: | | |
| Energy costs (excluding the estimated effect of weather) | $ | (29) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (29) | | | |
| Effect of weather (estimate)(b) | Effect of weather (estimate)(b) | 5 | | | — | | | — | | | — | | | — | | | 5 | | | Effect of weather (estimate)(b) | $ | (5) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (5) | | |
| Effect of lower net energy costs included in base rates | Effect of lower net energy costs included in base rates | 32 | | | — | | | — | | | — | | | — | | | 32 | | | Effect of lower net energy costs included in base rates | 36 | | | — | | | — | | | — | | | — | | | 36 | | |
| Transmission services charges | (1) | | | — | | | — | | | — | | | — | | | (1) | | | |
| | Other | Other | — | | | 1 | | | — | | | — | | | — | | | 1 | | | Other | (2) | | | — | | | — | | | — | | | 4 | | | 2 | | |
Cost recovery mechanisms – offset in electric revenue(d) | Cost recovery mechanisms – offset in electric revenue(d) | — | | | 6 | | | — | | | — | | | — | | | 6 | | | Cost recovery mechanisms – offset in electric revenue(d) | (3) | | | (12) | | | — | | | — | | | — | | | (15) | | |
| Total fuel and purchased power change | Total fuel and purchased power change | $ | 7 | | | $ | 7 | | | $ | — | | | $ | — | | | $ | — | | | $ | 14 | | | Total fuel and purchased power change | $ | 26 | | | $ | (12) | | | $ | — | | | $ | — | | | $ | 4 | | | $ | 18 | | |
| Net change in electric margins | Net change in electric margins | $ | (49) | | | $ | 9 | | | $ | — | | | $ | 13 | | | $ | 2 | | | $ | (25) | | | Net change in electric margins | $ | 36 | | | $ | 9 | | | $ | — | | | $ | 7 | | | $ | 2 | | | $ | 54 | | |
| Natural gas revenue change: | Natural gas revenue change: | | | Natural gas revenue change: | | |
Effect of weather (estimate)(b) | | Effect of weather (estimate)(b) | $ | (3) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (3) | | |
| Base rates (estimate) | | Base rates (estimate) | — | | | — | | | 12 | | | — | | | — | | | 12 | | |
| Change in rate design | | Change in rate design | — | | | — | | | 12 | | | — | | | — | | | 12 | | |
| | QIP rider | $ | — | | | $ | — | | | $ | 6 | | | $ | — | | | $ | — | | | $ | 6 | | | |
| Software licensing agreement | — | | | — | | | (5) | | | — | | | — | | | (5) | | | |
| Other | Other | (1) | | | — | | | 4 | | | — | | | — | | | 3 | | | Other | — | | | — | | | 3 | | | — | | | — | | | 3 | | |
Cost recovery mechanisms – offset in natural gas purchased for resale(d) | Cost recovery mechanisms – offset in natural gas purchased for resale(d) | (1) | | | — | | | 4 | | | — | | | — | | | 3 | | | Cost recovery mechanisms – offset in natural gas purchased for resale(d) | 17 | | | — | | | 45 | | | — | | | — | | | 62 | | |
Other cost recovery mechanisms(e) | Other cost recovery mechanisms(e) | — | | | — | | | 1 | | | — | | | — | | | 1 | | | Other cost recovery mechanisms(e) | — | | | — | | | 4 | | | — | | | — | | | 4 | | |
| Total natural gas revenue change | Total natural gas revenue change | $ | (2) | | | $ | — | | | $ | 10 | | | $ | — | | | $ | — | | | $ | 8 | | | Total natural gas revenue change | $ | 14 | | | $ | — | | | $ | 76 | | | $ | — | | | $ | — | | | $ | 90 | | |
| Natural gas purchased for resale change: | Natural gas purchased for resale change: | | | Natural gas purchased for resale change: | | |
| Effect of weather (estimate)(b) | | Effect of weather (estimate)(b) | $ | 4 | | | $ | — | | | $ | — | | | $ | — | | | — | | | $ | 4 | | |
| Cost recovery mechanisms – offset in natural gas revenue(d) | Cost recovery mechanisms – offset in natural gas revenue(d) | $ | 1 | | | $ | — | | | $ | (4) | | | $ | — | | | $ | — | | | $ | (3) | | | Cost recovery mechanisms – offset in natural gas revenue(d) | (17) | | | — | | | (45) | | | — | | | — | | | (62) | | |
| Total natural gas purchased for resale change | Total natural gas purchased for resale change | $ | 1 | | | $ | — | | | $ | (4) | | | $ | — | | | $ | — | | | $ | (3) | | | Total natural gas purchased for resale change | $ | (13) | | | $ | — | | | $ | (45) | | | $ | — | | | $ | — | | | $ | (58) | | |
| Net change in natural gas margins | Net change in natural gas margins | $ | (1) | | | $ | — | | | $ | 6 | | | $ | — | | | $ | — | | | $ | 5 | | | Net change in natural gas margins | $ | 1 | | | $ | — | | | $ | 31 | | | $ | — | | | $ | — | | | $ | 32 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | |
| Nine Months | Ameren Missouri | | Ameren Illinois
Electric Distribution | | Ameren Illinois
Natural Gas | | Ameren Transmission(a) | | Other /Intersegment Eliminations | | Ameren | | | | | |
| Electric revenue change: | | | | | | | | | | | | | | | | |
Effect of weather (estimate)(b) | $ | (29) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (29) | | | | | | |
Base rates (estimate)(c) | (51) | | | 5 | | | — | | | 49 | | | — | | | 3 | | | | | | |
| | | | | | | | | | | | | | | | |
| Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA) | (33) | | | — | | | — | | | — | | | — | | | (33) | | | | | | |
| Customer demand charges | (5) | | | — | | | — | | | — | | | — | | | (5) | | | | | | |
| MEEIA 2013, MEEIA 2016, and MEEIA 2019 performance incentives | (32) | | | — | | | — | | | — | | | — | | | (32) | | | | | | |
| Off-system sales | 33 | | | — | | | — | | | — | | | — | | | 33 | | | | | | |
| Customer late fees and reconnection fees | (4) | | | — | | | — | | | — | | | — | | | (4) | | | | | | |
| Energy-efficiency program investments | — | | | 8 | | | — | | | — | | | — | | | 8 | | | | | | |
| Other | (3) | | | 4 | | | — | | | — | | | 2 | | | 3 | | | | | | |
Cost recovery mechanisms – offset in fuel and purchased power(d) | (1) | | | (20) | | | — | | | — | | | — | | | (21) | | | | | | |
Other cost recovery mechanisms(e) | (6) | | | 1 | | | — | | | — | | | — | | | (5) | | | | | | |
| Total electric revenue change | $ | (131) | | | $ | (2) | | | $ | — | | | $ | 49 | | | $ | 2 | | | $ | (82) | | | | | | |
| Fuel and purchased power change: | | | | | | | | | | | | | | | | |
| Energy costs (excluding the estimated effect of weather) | $ | (21) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (21) | | | | | | |
Effect of weather (estimate)(b) | 9 | | | — | | | — | | | — | | | — | | | 9 | | | | | | |
| Effect of lower net energy costs included in base rates | 61 | | | — | | | — | | | — | | | — | | | 61 | | | | | | |
| Transmission services charges | (3) | | | — | | | — | | | — | | | — | | | (3) | | | | | | |
| Other | (2) | | | 1 | | | — | | | — | | | — | | | (1) | | | | | | |
Cost recovery mechanisms – offset in electric revenue(d) | 1 | | | 20 | | | — | | | — | | | — | | | 21 | | | | | | |
| Total fuel and purchased power change | $ | 45 | | | $ | 21 | | | $ | — | | | $ | — | | | $ | — | | | $ | 66 | | | | | | |
| Net change in electric margins | $ | (86) | | | $ | 19 | | | $ | — | | | $ | 49 | | | $ | 2 | | | $ | (16) | | | | | | |
| Natural gas revenue change: | | | | | | | | | | | | | | | | |
Effect of weather (estimate)(b) | $ | (2) | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | (2) | | | | | | |
| | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
| QIP rider | — | | | — | | | 16 | | | — | | | — | | | 16 | | | | | | |
| Software licensing agreement | — | | | — | | | (5) | | | — | | | — | | | (5) | | | | | | |
| Other | 2 | | | — | | | 2 | | | — | | | — | | | 4 | | | | | | |
Cost recovery mechanisms – offset in natural gas purchased for resale(d) | (11) | | | — | | | (41) | | | — | | | — | | | (52) | | | | | | |
Other cost recovery mechanisms(e) | — | | | — | | | (7) | | | — | | | — | | | (7) | | | | | | |
| Total natural gas revenue change | $ | (11) | | | $ | — | | | $ | (35) | | | $ | — | | | $ | — | | | $ | (46) | | | | | | |
| Natural gas purchased for resale change: | | | | | | | | | | | | | | | | |
Effect of weather (estimate)(b) | $ | 1 | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 1 | | | | | | |
Cost recovery mechanisms – offset in natural gas revenue(d) | 11 | | | — | | | 41 | | | — | | | — | | | 52 | | | | | | |
| Total natural gas purchased for resale change | $ | 12 | | | $ | — | | | $ | 41 | | | $ | — | | | $ | — | | | $ | 53 | | | | | | |
| Net change in natural gas margins | $ | 1 | | | $ | — | | | $ | 6 | | | $ | — | | | $ | — | | | $ | 7 | | | | | | |
| | | | | | | | | | | | | | | | |
(a)Includes an increase in transmission margins of $10 million and $35$7 million at Ameren Illinois for the three and nine months ended September 30, 2020,March 31, 2021, compared with the year-ago periods.period.
(b)Represents the estimated variation resulting primarily from changes in cooling and heating degree-days on electric and natural gas demand compared with the year-ago periods;period; this variation is based on temperature readings from the National Oceanic and Atmospheric Administration weather stations at local airports in our service territories.
(c)For Ameren Illinois Electric Distribution and Ameren Transmission, base rates include increases or decreases to operating revenues related to the revenue requirement reconciliation adjustment under formula rates. For Ameren Missouri, base rates exclude an increase of $23 million and $35$7 million for the recovery of lost electric margins for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, resulting from the MEEIA 2016 and 2019 customer energy-efficiency programs. This amount is included in the “sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA)” line item.
(d)Electric and natural gas revenue changes are offset by corresponding changes in “Fuel,” “Purchased power,” and “Natural gas purchased for resale” on the statement of income, resulting in no change to electric and natural gas margins.
(e)Offsetting expense increases or decreases are reflected in “Other operations and maintenance,” “Depreciation and amortization,” or in “Taxes other than income taxes,” within the “Operating Expenses” section and "Income Taxes" in the statement of income. These items have no overall impact on earnings.
Ameren
Ameren’s electric margins decreased $25increased $54 million, or 2%, and $16 million, or 1%6%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, primarily because of decreasedincreased margins at Ameren Missouri, partially offset by increased margins at Ameren Transmission and Ameren Illinois Electric Distribution, and Ameren Transmission, as discussed below.
Ameren’s natural gas margins increased $5$32 million, or 5%, and $7 million, or 2%15%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, primarily because of increased margins at Ameren Illinois Natural Gas, as discussed below.
Ameren Transmission
Ameren Transmission’s margins increased $13$7 million, or 10%, and $49 million, or 14%6%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods.period. Base rate revenues were favorably affected by increased capital investment, as evidenced by a 13%11% increase in rate base used to calculate the revenue requirement,requirement, partially offset by the March 2021 FERC order, which required refunds related to historical recovery of materials and an increasesupplies inventories. See Transmission Formula Rate Revisions in the allowed ROE resulting from the May 2020 FERC order. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for additional information regarding the March 2021 FERC complaint cases.order.
Ameren Missouri
Ameren Missouri’s electric margins decreased $49increased $36 million, or 6%, and $86 million, or 4%8%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year ago periods.period.
The following items had a favorable effect on Ameren Missouri’s electric margins between periods:
•The March 2020 MoPSC electric rate order that resulted in lower net energy costs included in base rates partially offset by lower electric base rates increased margins $30 million. The change in electric base rates is the sum of the change in base rates (estimate) (-$6 million) and the effect of lower net energy costs included in base rates (+$36 million) in the table above.
•Winter temperatures were colder as heating degree days increased 12%. The aggregate effect of weather increased margins an estimated $13 million. The change in margins due to weather is the sum of the effect of weather (estimate) on electric revenues (+$18 million) and the effect of weather (estimate) on fuel and purchased power (-$5 million) in the table above.
The following items had an unfavorable effect on Ameren Missouri’s electric margins for the three and nine months ended September 30, 2020, compared with the year-ago periods (except when a specific period is referenced):between periods:
•The aggregate effectabsence of changesthe Callaway Energy Center generation and the extremely cold weather in customer usage, excludingmid-February 2021 drove net energy costs higher than those reflected in base rates, which reduced margins by $4 million, resulting from Ameren Missouri’s 5% exposure to net energy cost variances under the FAC. The change in net energy costs is the sum of the revenue change in “Off-system sales, capacity and FAC revenues, net” (-$4 million) in the table above, and the change in “energy costs” (comparable between periods).
•Excluding the estimated effects of weather and the MEEIA customer energy-efficiency programs, decreased electric revenues decreased an estimated $11 million and $38 million, respectively.$3 million. The decrease was primarily due to a reduction in sales volumes (-$18 million and -$37 million, respectively) and decreased revenues from customer demand charges (-$4 million and -$5 million, respectively), both of which were unfavorably affected by the COVID-19 pandemic. An increase in the average retail price per kilowatthour due to changes in customer usage patterns partially offset the decreases by +$11 million and +$4 million, respectively. shifts in commercial and industrial usage between rate classes. While the MEEIA customer energy-efficiency programs reduced retail sales volumes, the recovery of lost electric margins under the MEEIA ensured that electric margins were not affected.
•The absence of revenues associated with MEEIA 2013 and 2016 performance incentives in 2020, partially offset by revenues from the MEEIA 2019 performance incentive, decreased revenues $11 million and $32 million, respectively. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for information regarding the MEEIA performance incentives.
•Summer temperatures were milder as cooling degree days decreased 14% and 8%, respectively, and winter temperatures were warmer as heating degree days decreased 9% for the nine months ended September 30, 2020. The aggregate effect of weather decreased margins an estimated $18 million and $20 million, respectively. The change in margins due to weather is the sum of the effect of weather (estimate) on electric revenues (-$23 million and -$29 million, respectively) and the effect of weather (estimate) on fuel and purchased power (+$5 million and +$9 million, respectively) in the table above.
•The COVID-19 pandemic caused the suspension of customer late fees and disconnections, which decreased revenues $4 million for the nine months ended September 30, 2020. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for information on the suspension of customer late fees and disconnections.
The following items had a favorable effect on Ameren Missouri’s electric margins for the three and nine months ended September 30, 2020, compared with the year-ago periods (except when a specific period is referenced):
•Lower net energy costs increased margins $4 million and $12 million, respectively, as a result of decreased sales volumes, which were reduced by the COVID-19 pandemic. The change in net energy costs is the sum of the effect of revenue change in off-system sales (+$33 million and +$33 million, respectively), and the effect of the change in energy costs (-$29 million and -$21 million, respectively) in the table above.
•Lower net energy costs included in base rates partially offset by lower electric base rates as a result of the March 2020 MoPSC electric rate order, with new rates effective April 1, 2020, increased margins $10 million for the nine months ended September 30, 2020. The change in electric base rates is the sum of the change in base rates (estimate) (-$51 million) and the effect of lower net energy costs included in base rates (+$61 million) in the table above.
Ameren Missouri’s natural gas margins were comparable between periods.
Purchased gas costs increased $17 million, primarily resulting from the significant increase in customer demand and prices for natural gas experienced in mid-February 2021 due to the extremely cold weather. The increased purchased gas costs are fully offset by an increase in natural gas revenues under the PGA rider, resulting in no impact to margin. The increase in purchased gas cost is reflected in “cost recovery mechanisms - offset in natural gas revenue” and the associated recoverability from customers is reflected in “cost recovery mechanisms - offset in natural gas purchased for resale”.Ameren Illinois
Ameren Illinois’ electric margins increased $19 million, or 5%, and $54$16 million, or 5%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, driven by increased margins at Ameren Illinois TransmissionElectric Distribution and Ameren Illinois Electric Distribution.Transmission. Ameren Illinois Natural Gas’ margins increased $6$31 million, or 7%17%, and $6 million or 2%, respectively, for the three and nine months ended September 30, 2020, compared with the year-agobetween periods.
Ameren Illinois Electric Distribution
Ameren Illinois Electric Distribution’s margins increased $9 million, or 3%, and $19 million, or 2%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods.period. Purchased power costs increased $12 million, primarily resulting from the significant increase in customer demand and prices for electricity experienced in mid-February 2021 due to the extremely cold weather. The increased purchased power costs are fully offset by an increase in electric revenues under the cost recovery mechanisms for purchased power, resulting in no impact to margin. The increase in purchased power cost is reflected in “cost recovery mechanisms - offset in electric revenue” and the associated recoverability
from customers is reflected in “cost recovery mechanisms - offset in fuel and purchased power”. The following items had a favorable effect on Ameren Illinois Electric Distribution’s margins for the three and nine months ended September 30, 2020, compared with the year-ago periods (except when a specific period is referenced):between periods:
•Margins increased due to a higher recoverable non-purchased power expensesrecognized ROE (+$10 million) and increased capital investment (+$84 million), as evidenced by a 8% an increase in rate base used to calculate the revenue requirement, partially offset by a lower recognized ROE (-$13 million), as evidenced by a decrease of 10072 basis points in the estimated annual average of the monthly yields of the 30-year United States Treasury bonds, under performance-based formula ratemaking forand increased capital investment (+$2 million), as evidenced by a 6% increase in rate base used to calculate the nine months ended September 30, 2020.revenue requirement, partially offset by lower recoverable non-purchased power expenses (-$3 million). The sum of these changes collectively increased margins $5 million for the nine months ended September 30, 2020.$3 million.
•Revenues increased $2$3 million and $8 million, respectively, due to recovery of increased energy-efficiency program investments under performance-based formula ratemaking.
Ameren Illinois Natural Gas
Ameren Illinois Natural Gas’ margins increased $6$31 million, or 7%, and $6 million or 2%17%, for the three and nine months ended September 30, 2020, respectively, compared with the year-ago periods. Revenues increased from QIP recoveries due to additional investment in qualified natural gas infrastructure increased margins $6 million and $16 million, for the three and nine months ended September 30, 2020, respectively, compared with the year-ago periods. The absence of revenues from a 2019 software licensing agreement with Ameren Missouri decreased margins $5 million for the three and nine months ended September 30, 2020March 31, 2021, compared with the year-ago periods. See Note 8period. Purchased gas costs increased $45 million, primarily resulting from the significant increase in customer demand and prices for natural gas experienced in mid-February 2021 due to the extremely cold weather. The increased purchased gas costs are fully offset by an increase in natural gas revenues under the PGA rider, resulting in no impact to margin. The increase in purchased gas cost is reflected in “cost recovery mechanisms - Related-party Transactions under Part I, Item 1,offset in natural gas revenue” and the associated recoverability from customers is reflected in “cost recovery mechanisms - offset in natural gas purchased for resale”. The following items had a favorable effect on Ameren Illinois Natural Gas’ margins between periods:
•Revenues increased $12 million due to higher natural gas base rates as a result of this report for additional information.the January 2021 natural gas rate order.
•The implementation of a change in rate design pursuant to the January 2021 natural gas rate order, which increased margins $12 million. This change in rate design concentrates more revenues in the winter heating season due to an increase in volumetric rates and a decrease in fixed customer rates. As such, the change is not expected to materially affect annual earnings comparisons.
Ameren Illinois Transmission
Ameren Illinois Transmission’s margins increased $10$7 million, or 12%, and $35 million, or 16%9%, for the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods.period. Margins were favorably affected by increased capital investment, as evidenced by a 18%17% increase in rate base used to calculate the revenue requirement, partially offset by the March 2021 FERC order, which required refunds related to historical recovery of materials and an increasesupplies inventories. See Transmission Formula Rate Revisions in the allowed ROE resulting from the May 2020 FERC order. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for additional information regarding the March 2021 FERC complaint cases.order.
Other Operations and Maintenance Expenses
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment(a) | | Increase (Decrease) by Segment |
| | | Overall Ameren Decrease of $16$18 Million (QTD YoY) | | Overall Ameren Decrease of $61 Million (YTD YoY) | |
| | | | |
(a)Includes $14 million and $15 million of other operations and maintenance at Ameren Transmission in the three months ended September 30, 2020 and 2019, respectively. Includes other/intersegment eliminations of $(2) million and $(3)$(2) million in the three months ended September 30, 2020,March 31, 2021 and 2019, respectively. Also includes other/intersegment eliminations of $(7) million and $(6) million in the nine months ended September 30, 2020,and 2019, respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | | Other/Intersegment Eliminations |
| | | | | | | | | |
| | Ameren Illinois Electric Distribution | | Ameren Transmission | | | | |
Ameren
Other operations and maintenance expenses decreased $16 million and $61$18 million in the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, due to changes discussed below.
Ameren Transmission
Other operations and maintenance expenses were comparable between periods.
Ameren Missouri
Other operations and maintenance expenses decreased $21The $14 million and $58 milliondecrease in the three and nine months ended September 30, 2020, respectively, compared with the year-ago periods. The following items decreased other operations and maintenance expenses in the three and nine months ended September 30, 2020,March 31, 2021, compared with the year-ago periods (except where a specific period, is referenced):
•Callaway Energy Center refueling operations and maintenance costs decreased $34 million in the nine months ended September 30, 2020, primarily because of the refueling and maintenance outage that was completed in May 2019. The 2019 outage costs were expensed as incurred. Costs for the current year’s fall refueling and maintenance outage are being deferred as a regulatory asset pursuant to the February 2020 MoPSC order.
•Energy center maintenance costs, other than those associated with the Callaway refueling and maintenance outage, decreased $6 million and $21 million, respectively, primarily due to lower electric system infrastructure maintenance expenses as a result of decreased system load, disciplined cost management, and the deferral of projects to future periods.
•Transmission and distribution expenditures decreased $6 million and $11 million, respectively, primarily due to increased labor directed towards capital projects versus operations and maintenance-oriented projects. The decrease in the three months ended September 30, 2020, was partially offset by increased storm costs in the current year period.
•Amortization of solar rebate costs incurred prior to the RESRAM decreased $5 million and $9 million, respectively, as a result of the March 2020 MoPSC electric rate order.following items:
•The cash surrender value of company-owned life insurance increased $4$8 million, in the three months ended September 30, 2020,primarily because of favorableunfavorable market returns in the current-yearyear-ago period.
•Customer energy-efficiency programAmortization of costs, primarily solar rebate costs incurred prior to the RESRAM, decreased $3$6 million inpursuant to the three months ended September 30,March 2020 becauseMoPSC electric rate order.
•Deferral to a regulatory asset of increased participation in$5 million of certain costs incurred related to the MEEIA 2019 programs inCOVID-19 pandemic, pursuant to the third quarter of 2019.March 2021 MoPSC orders.
•Transmission and distribution expenditures decreased $5 million, primarily resulting from less maintenance due to recent capital improvements and disciplined cost management.
The following items partially offset the above decreases in other operations and maintenance expenses in the three and nine months ended September 30, 2020, compared with the year-ago periods (except where a specific period is referenced):between periods:
•Solar rebateEnergy center maintenance costs recoverable underincreased $8 million, primarily because of the RESRAM resultedamortization of Callaway refueling and maintenance costs deferred as a regulatory asset in increased expenses of $3 million and $7 million, respectively.the year-ago period, pursuant to the February 2020 MoPSC order.
•Technology-related expendituresCustomer energy-efficiency program costs increased $6 million because of increased participation in the nine months ended September 30, 2020, primarily due to costs associated with the implementation of cloud computing technology.
•The cash surrender value of company-owned life insurance decreased $5 millionMEEIA programs in the nine months ended September 30, 2020, because of less favorable market returns in the current-year period, compared with the year-agocurrent period.
Ameren Illinois
Other operations and maintenance expenses increased $4 million and decreased $2$5 million in the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, as discussed below. Other operations and maintenance expenses were comparable between periods at Ameren Illinois Natural Gas and Ameren Illinois Transmission.
Ameren Illinois Electric Distribution
Other operations and maintenance expenses increaseddecreased $5 million and $8 million in the three and nine months ended September 30, 2020, respectively, compared with the year-ago periods. The following items increased other operation and maintenance expenses in the three and nine months ended September 30, 2020, compared with the year-ago periods (except where a specific period is referenced):
•Amortization of regulatory assets associated with energy-efficiency program investments under performance-based formula ratemaking increased $5 million in the nine months ended September 30, 2020.
•Labor and benefits increased $4 million and $5 million, respectively, including an increase in power restoration assistance provided to other utilities.
•The cash surrender value of company-owned life insurance decreased $2 million in the nine months ended September 30, 2020, because of less favorable market returns in the current-year period, compared with the year-ago period.
•Environmental remediation rider costs increased $2 million in the three months ended September 30, 2020, due to timing of projects.
The following items partially offset the above increases in other operations and maintenance expenses in the three and nine months ended September 30, 2020 compared with the year-ago periods (except where a specific period is referenced):
•Meter reading costs decreased $4 million in the nine months ended September 30, 2020, as Ameren Illinois Electric Distribution completed deployment of automated smart meters in 2019.
•The cash surrender value of company-owned life insurance increased $2 million in the three months ended September 30, 2020, resulting from favorable market returns in the current-year period.
Ameren Illinois Natural Gas
Other operations and maintenance expenses were comparable between the three months ended September 30, 2020, and the year-ago period. Other operations and maintenance expenses decreased $9 million in the nine months ended September 30, 2020,March 31, 2021, compared with the year-ago period, primarily because of a $4 million reductionincrease in energy-efficiency rider coststhe cash surrender value of company-owned life insurance due to unfavorable market returns in the deferralyear-ago period. Other operations and maintenance expenses also decreased because of projects to future periods and a $3 million reduction in meter reading costs as Ameren Illinois Natural Gas completed deploymentdistribution expenditures, resulting from disciplined cost management and timing of automated smart metersexpenditures. These decreases were partially offset by a $2 million increase in 2019.the amortization of energy-efficiency program investments under performance-based ratemaking.
Depreciation and Amortization Expenses
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment(a) | | Increase (Decrease) by Segment |
| | | Overall Ameren Increase of $25$26 Million (QTD YoY) | | Overall Ameren Increase of $54 Million (YTD YoY) | |
| | | | |
(a)Includes $25 million and $21 million of depreciation and amortization expense at Ameren Transmission in the three months ended September 30, 2020 and 2019, respectively. Includes other/intersegment eliminations of $2$— million and $1$— million in the three months ended September 30, 2020,March 31, 2021 and 2019, respectively. Also includes other/intersegment eliminations of $4 million and $3 million in the nine months ended September 30, 2020,and 2019, respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | | Other/Intersegment Eliminations |
| | | | | | | | | |
| | Ameren Illinois Electric Distribution | | Ameren Transmission | | | | |
Depreciation and amortization expenses increased $25$26 million, $16$17 million, and $7$8 million in the three months ended September 30, 2020, and $54 million, $31 million, and $19 million in the nine months ended September 30, 2020,March 31, 2021, compared with the year-ago periods,period, at Ameren, Ameren Missouri, and Ameren Illinois, respectively, primarily because of additional property, plant, and equipment investments across their respective segments. Ameren’s and Ameren Missouri’s depreciation and amortization expenses reflectreflected a deferral to a regulatory asset of depreciation and amortization expenses pursuant to the PISA. As a result of the March 2020 MoPSC electric rate order, the deferral to a regulatory assetPISA and RESRAM. The PISA and RESRAM deferrals of depreciation and amortization expenses related to PISA-eligible assets placed in-service through December 31, 2019, ceased as of April 1, 2020, as the associated depreciation and amortization expenses were then reflected in customer rates. The PISA deferral of depreciation and amortization expenses was $3$19 million and $7$13 million for the three months ended September 30,March 31, 2021 and 2020, and 2019, respectively, and $17 million and $14 million for the nine months ended September 30, 2020 and 2019, respectively.
Taxes Other Than Income Taxes
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment(a) | | Increase (Decrease) by Segment |
| | | Overall Ameren DecreaseIncrease of $3 Million (QTD YoY) | | Overall Ameren Decrease of
$3 Million (YTD YoY)
| |
| | | | |
(a)Includes $2 million $1 million, $6 million, and $3$2 million at Ameren Transmission in the three months ended September 30,March 31, 2021 and 2020, thethree months ended September 30, 2019, the nine months ended September 30, 2020, and the nine months ended September 30, 2019, respectively, and other/intersegment eliminations of $2 million, $2 million, $7$4 million and $8$3 million in the three months ended September 30,March 31, 2021 and 2020, thethree months ended September 30, 2019, the nine months ended September 30, 2020, and the nine months ended September 30, 2019, respectively.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | | Other/Intersegment Eliminations |
| | | | | | | | | |
| | Ameren Illinois Electric Distribution | | Ameren Transmission | | | | |
Taxes other than income taxes decreasedincreased $3 million in the three months ended September 30, 2020,March 31, 2021, compared with the year-ago period, primarily due tobecause of a decrease$3 million increase in excise taxes at Ameren MissouriIllinois Natural Gas, as a result of reduced sales, as discussed in the Electric and Natural Gas Margins section above. Taxes other than income taxes decreased $3 million in the nine months ended September 30, 2020, compared with the year-ago period, primarily due to a $7 million decrease in excise taxes at Ameren Missouri and a $2 million reduction in the electric distribution tax at Ameren Illinois Electric Distribution, both as a result of reducedincreased sales. These decreases were partially offset by property tax increases of $4 million and $3 million at Ameren Missouri and Ameren Transmission, respectively, resulting from higher assessed values.
Other Income, Net
| | | | | | | | | | | | | | | | |
| | | |
| Total by Segment(a)
| | Increase (Decrease) by Segment | |
| Total by Segment | | | | Overall Ameren Increase of $14$25 Million (QTD YoY) | | Overall Ameren Increase of $18 Million (YTD YoY) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | | Other/Intersegment Eliminations |
| | | | | | | | | |
| | Ameren Illinois Electric Distribution | | Ameren Transmission | | | | |
(a)Includes $4 million and $2 million of other income, net, at Ameren Transmission in the three months ended September 30, 2020 and 2019, respectively.
Other income, net, increased $14$25 million in the three months ended September 30, 2020,March 31, 2021, compared with the year-ago period, primarily due tobecause of a $9 million increase in the non-service cost components of net periodic benefit income at Ameren Missouri partiallyand an $8 million decrease in charitable donations due to changesthe absence of charitable donations made in the base level of pension and postretirement costs as a result of the March 2020 MoPSC electric rate order. Additionally, other income, net, increased due to a $3 million increase in the equity portion of allowance for funds used during construction at Ameren Transmission, primarily due to lower short-term borrowings in the current-year period. Other income, net, increased $18 million in the nine months ended September 30, 2020, compared with the year-ago period. An increase of $19 million in the non-service cost components of net periodic benefit income at Ameren Missouri was partially offset by a $6 million increase in donations, primarily due to charitable donations madeperiod pursuant to the March 2020 MoPSC electric rate order. Additionally, otherOther income, net, also increased due to a $3 million increase in thefor activity not reported as part of a segment primarily because of increased income from equity portion of allowance for funds used during construction at Ameren Transmission. See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report for additional information regarding the Ameren Missouri's March 2020 electric rate order.investments.
See Note 5 – Other Income, Net, under Part I, Item 1, of this report for additional information.
Interest Charges
| | | | | | | | | | | | | | | | |
| | | | | Increase (Decrease) by Segment | |
| Total by Segment | | Increase (Decrease) by Segment |
| | | Overall Ameren Increase of $14$7 Million (QTD YoY) | | Overall Ameren Increase of $21 Million (YTD YoY) | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Ameren Missouri | | | Ameren Illinois Natural Gas | | | Other/Intersegment Eliminations |
| | | | | | | | | |
| | Ameren Illinois Electric Distribution | | Ameren Transmission | | | | |
(a)Includes other/intersegment eliminations of $12Interest charges increased $7 million and $4 million of other income, net, in the three months ended September 30, 2020 and 2019, respectively.
Interest charges increased $14 million and $21 million in the three and nine months ended September 30, 2020, respectively,March 31, 2021, compared with the year-ago periods,period, primarily due to a long-term debt issuance at Ameren (parent) in April 2020, which increased interest charges by $7 million and $14 million, respectively, and a long-term debt issuance at Ameren Missouri in March 2020, which increased interest charges by $3 million and $7 million, respectively. Lower PISA deferrals also resulted in increased interest charges at Ameren Missouri in the three months ended September 30, 2020.million. Interest charges at Ameren and Ameren Missouri reflectreflected a deferral to a regulatory asset of interest charges pursuant to PISA. As a result of the March 2020 MoPSC electric rate order, the deferral to a regulatory asset of amounts related to PISA-eligible assets placed in-service through December 31, 2019, ceased as of April 1, 2020, as the return on those PISA assets was then reflected in customer rates.and RESRAM. The PISA deferraland RESRAM deferrals of interest charges was less than $1were $15 million and $4$9 million for the three months ended September 30,March 31, 2021 and 2020, and 2019, respectively, and $9 million for each of the nine months ended September 30, 2020 and 2019.respectively.
Income Taxes
The following table presents effective income tax rates for the three and nine months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | | | Three Months(a) | | Nine Months(a) | | | | Three Months(a) | |
| | | | 2020 | | 2019 | | 2020 | | 2019 | | | | 2021 | | 2020 | |
| Ameren | Ameren | | | 15 | % | | 20 | % | | 15 | % | | 18 | % | Ameren | | | 10 | % | | 12 | % | |
| Ameren Missouri | Ameren Missouri | | | 6 | % | | 14 | % | | 6 | % | | 13 | % | Ameren Missouri | | | (4) | % | | 8 | % | |
| Ameren Illinois | Ameren Illinois | | | 24 | % | | 24 | % | | 25 | % | | 24 | % | Ameren Illinois | | | 25 | % | | 24 | % | |
| Ameren Illinois Electric Distribution | Ameren Illinois Electric Distribution | | | 21 | % | | 23 | % | | 23 | % | | 23 | % | Ameren Illinois Electric Distribution | | | 22 | % | | 22 | % | |
| Ameren Illinois Natural Gas | Ameren Illinois Natural Gas | | | (b) | | (b) | | 26 | % | | 26 | % | Ameren Illinois Natural Gas | | | 27 | % | | 26 | % | |
| Ameren Illinois Transmission | Ameren Illinois Transmission | | | 25 | % | | 24 | % | | 26 | % | | 25 | % | Ameren Illinois Transmission | | | 25 | % | | 24 | % | |
| Ameren Transmission | Ameren Transmission | | | 26 | % | | 25 | % | | 27 | % | | 26 | % | Ameren Transmission | | | 27 | % | | 26 | % | |
|
(a)Estimate of the annual effective income tax rate adjusted to reflect the tax effect of items discrete to the three and nine months ended September 30, 2020March 31, 2021 and 2019.
(b)Not meaningful because of the insignificant amount of income before income taxes.2020.
See Note 12 – Income Taxes under Part I, Item 1, of this report for a reconciliation of the federal statutory corporate income tax rate to the effective income tax rate for the Ameren Companies.
The effective income tax rate was lower at Ameren Illinois Electric Distribution in the three months ended September 30, 2020, compared with the year-ago period, primarily because of lower amortization of excess deferred taxes and lower tax benefits from certain depreciation differences on property-related items largely attributable to the allowance for equity funds used during construction.
LIQUIDITY AND CAPITAL RESOURCES
Collections from our tariff-based revenues are our principal source of cash provided by operating activities. A diversified retail customer mix, primarily consisting of rate-regulated residential, commercial, and industrial customers, provides us with a reasonably predictable source of cash. In addition to using cash provided by operating activities, we use available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings to support normal operations and temporary capital requirements. We may reduce our short-term borrowings with cash provided by operations or, at our
discretion, with long-term borrowings, or, in the case of Ameren Missouri and Ameren Illinois, with capital contributions from Ameren (parent). We expect to make significant capital expenditures over the next five years, supported by a combination of long-term debt and equity, as we invest in our electric and natural gas utility infrastructure to support overall system reliability, grid modernization, renewable energy targets requirements, environmental compliance, and other improvements. As part of its plan to fund thesethe cash flow requirements for capital expenditures, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2024.2025. Ameren expects these issuances to provide equity of about $100 million annually. Ameren also plansIn addition to issue incrementalthe issuance of common equity to fund ashares in connection with the 2021 settlement of the remaining portion of Ameren Missouri’s wind generation investments through the physical settlement of the forward sale agreement, entered into in August 2019 relating to 7.5 million shares of common stock. Additionally, Ameren plans to issue incremental equity of about $150 million annuallyin 2021 and about $300 million each year from 20212022 to 2024. Incremental renewable generation investment opportunities included in2025. Ameren Missouri’s 2020 IRP may result in the need for additional equity. For additional information about the forward sale agreement, see Note 4 – Long-Term Debtexpects to establish an at-the-market equity program that will allow Ameren to meet equity needs through 2023, subject to market conditions and Equity Financings under Part I, Item 1, of this report.other factors. Ameren expects its equity to total capitalization to be about 45% through the period ending December 2024,31, 2025, with the long-term intent to support solid investment-grade credit ratings. See Long-term Debt and Equity below and Note 4 – Long-term Debt and Equity Financings under Part I, Item 1, of this report for additional information on the 2021 settlement of the remaining portion of the forward sale agreement.
The use of cash provided by operating activities and short-term borrowings to fund capital expenditures and other long-term investments at the Ameren Companies frequently results in a working capital deficit, defined as current liabilities exceeding current assets, as was the case at September 30, 2020,March 31, 2021, for Ameren and Ameren Illinois. With the credit capacity available under the Credit Agreements, and cash and cash equivalents, Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, had net available liquidity of $2.0$1.4 billion at September 30, 2020. As a result of capital market volatility, due, in part, to the COVID-19 pandemic, and to increase net available liquidity, Ameren (parent) accelerated a debt issuance to April 2020, which had been planned for later in 2020, and used a portion of the proceeds to repay $350 million of senior unsecured notes held by Ameren (parent) in October 2020. Additionally, Ameren expects to receive between $540 million and $550 million upon settlement of the forward sale agreement, which can be settled at Ameren’s discretion on or prior to March 31, 2021. See Credit Facility Borrowings and Liquidity and Long-term Debt and Equity below for additional information.
The following table presents net cash provided by (used in) operating, investing, and financing activities for the ninethree months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Net Cash Provided By
Operating Activities | | Net Cash Used In
Investing Activities | | Net Cash Provided by (Used in)
Financing Activities | | Net Cash Provided By (Used In)
Operating Activities | | Net Cash Used In
Investing Activities | | Net Cash Provided By
Financing Activities |
| | 2020 | | 2019 | | Variance | | 2020 | | 2019 | | Variance | | 2020 | | 2019 | | Variance | | 2021 | | 2020 | | Variance | | 2021 | | 2020 | | Variance | | 2021 | | 2020 | | Variance |
| Ameren | Ameren | $ | 1,329 | | | $ | 1,668 | | | $ | (339) | | | $ | (1,981) | | | $ | (1,798) | | | $ | (183) | | | $ | 644 | | | $ | 178 | | | $ | 466 | | Ameren | $ | (35) | | | $ | 290 | | | $ | (325) | | | $ | (889) | | | $ | (684) | | | $ | (205) | | | $ | 795 | | | $ | 421 | | | $ | 374 | |
| | Ameren Missouri | Ameren Missouri | 709 | | | 840 | | | (131) | | | (877) | | | (785) | | | (92) | | | 139 | | | (49) | | | 188 | | Ameren Missouri | (51) | | | 41 | | | (92) | | | (398) | | | (328) | | | (70) | | | 316 | | | 272 | | | 44 | |
| Ameren Illinois | Ameren Illinois | 515 | | | 706 | | | (191) | | | (1,030) | | | (903) | | | (127) | | | 537 | | | 234 | | | 303 | | Ameren Illinois | 13 | | | 232 | | | (219) | | | (337) | | | (323) | | | (14) | | | 326 | | | 106 | | | 220 | |
Cash Flows from Operating Activities
Our cash provided by operating activities is affected by fluctuations of trade accounts receivable, inventories, and accounts and wages payable, among other things, as well as the unique regulatory environment for each of our businesses. Substantially all expenditures related to fuel, purchased power, and natural gas purchased for resale are recovered from customers through rate adjustment mechanisms, which may be adjusted without a traditional rate proceeding. Similar regulatory mechanisms exist for certain other operating expenses that can also affect the timing of cash provided by operating activities. The timing of cash payments for costs recoverable under our regulatory mechanisms differs from the recovery period of those costs. Additionally, the seasonality of our electric and natural gas businesses, primarily caused by seasonal customer rates and changes in customer demand due to weather, significantly affects the amount and timing of our cash provided by operating activities.
Ameren
Ameren’s cash provided by operating activities decreased $325 million in the first three months of 2021, compared with the year-ago period. The following items contributed to the decrease:
Our customers’ payment•A $309 million decrease resulting from increased purchases in natural gas for our services has been adversely affected byresale and purchased power costs as a result of the COVID-19 pandemic, resultingsignificant increase in a decreasecustomer demand and prices for natural gas and electricity experienced in mid-February 2021 due to our cash flow from operations.For information regarding Ameren Missouri’sextremely cold weather, which are recovered under the PGA, FAC, and Ameren Illinois’ suspensionpurchased power rider; a net decrease attributable to other regulatory recovery mechanisms; and subsequent reinstatement ofa decrease in customer disconnection activities and late fee charges for nonpayment, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report. In addition, see Results of Operations above for more information on Ameren’s,collections at Ameren Missouri’s, and Ameren Illinois’Illinois, primarily due to an increase in accounts receivable balances, which reflected an increase in amounts that were 30 days or greater past due or that were a part of a deferred payment arrangement. These items were partially offset by increased customer collections resulting from base rate increases related to sales volumes and PISA at Ameren Missouri and increased natural gas revenues at Ameren Illinois as a result of the January 2021 rate order.
•A $26 million increase in interest payments, primarily due to an increase in the average outstanding debt at Ameren (parent) and Ameren Missouri.
•A $16 million increase in major storm restoration costs at Ameren Illinois due to a January 2021 storm.
•A $9 million increase in property tax payments at Ameren Missouri primarily due to higher assessed property tax values.
•A $7 million decrease in net collateral activity with counterparties, primarily resulting from changes in the market prices of power, natural gas, and other fuels.
AmerenThe following items partially offset the decrease in Ameren’s cash from operating activities between periods:
Ameren’s•A $35 million increase resulting from a decrease in coal inventory levels at Ameren Missouri due to increased consumption levels, compared with the year-ago period.
•An $11 million decrease in payments to settle ARO liabilities, primarily related to the closure of Ameren Missouri’s CCR storage facilities.
Ameren Missouri
Ameren Missouri’s cash provided by operating activities decreased $339$92 million in the first ninethree months of 2020,2021, compared with the year-ago period. The following items contributed to the decrease:
•A $281$111 million decrease resulting from increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, which are recovered under the PGA and FAC and a net decrease attributable to other regulatory recovery mechanisms. These items were partially offset by increased customer collections resulting from base rate increases related to sales volumes and PISA.
•A $10 million increase in interest payments, primarily due to an increase in the average outstanding debt.
•A $9 million increase in property tax payments primarily due to higher assessed property tax values.
•An $8 million decrease in net collateral activity with counterparties, primarily resulting from changes in the market prices of power, natural gas, and other fuels.
The following items partially offset the decrease in Ameren Missouri’s cash from operating activities between periods:
•A $35 million increase resulting from a decrease in coal inventory levels due to increased consumption levels, compared with the year-ago period.
•An $11 million decrease in payments to settle ARO liabilities, primarily related to the closure of CCR storage facilities.
Ameren Illinois
Ameren Illinois’ cash provided by operating activities decreased $219 million in the first three months of 2021, compared with the year-ago period. The following items contributed to the decrease:
•A $202 million decrease resulting from increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, which are recovered under the PGA and purchased power rider; a net decrease attributable to other regulatory recovery mechanisms; and a decrease in customer collections, primarily due to an increase in accounts receivable balances, which reflected an increase in amounts that were 30 days or greater past due or that were a part of a deferred payment arrangement, a decrease in sales volumes and a net decrease attributable to regulatory recovery mechanisms,arrangement. These items were partially offset by decreased fuel and purchased power costs at Ameren Missouri and decreased purchased power costs and volumes andincreased natural gas costs at Ameren Illinois.revenues as a result of the January 2021 rate order.
•A $40 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased to mitigate against any potential supply disruptions.
•A $32 million increase in payments to settle ARO liabilities, primarily related to Ameren Missouri’s CCR storage facilities.
•A $27 million increase in pension and postretirement benefit plan contributions.
•A $25 million decrease in net collateral activity with counterparties, primarily resulting from changes in the market prices of power and natural gas, changes in contracted commodity volumes, and decreases resulting from Ameren Illinois’ renewable energy contracts entered into pursuant to the FEJA.
•A $19 million increase in interest payments, primarily due to an increase in the average outstanding debt at Ameren (parent) and Ameren Illinois.
•A $17 million decrease, primarily resulting from increased coal inventory levels as less coal was purchased in 2019 due to delivery disruptions that occurred from flooding.
•A $14 million increase in property tax payments at Ameren Missouri due to higher property tax values in 2019, compared with 2018. Property tax payments in a given year are based on the preceding year’s property tax values.
•Refunds paid in 2020 of $13 million associated with the November 2013 FERC complaint case, as discussed in Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.
The following items partially offset the decrease in Ameren’s cash from operating activities between periods:
•A $28 million decrease in non-Callaway Energy Center maintenance costs at Ameren Missouri, primarily due to lower electric system infrastructure maintenance expenses as a result of decreased system load, disciplined cost management, the deferral of projects to future periods, and lower storm costs.
•A $27 million decrease in payments for the employer portion of Social Security taxes as a result of a payment deferral allowed under the Coronavirus Aid, Relief, and Economic Security Act. Half of this deferral will be paid at the end of 2021 and the remaining half will be paid at the end of 2022.
•A $22 million decrease in payments for nuclear refueling and maintenance outages at Ameren Missouri’s Callaway Energy Center, as the current year refueling and maintenance outage began in October 2020, while the prior year refueling and maintenance outage was completed in the second quarter of 2019.
Ameren Missouri
Ameren Missouri’s cash provided by operating activities decreased $131 million in the first nine months of 2020, compared with the year-ago period. The following items contributed to the decrease:
•A $147 million decrease resulting from decreased customer collections, primarily due to an increase in accounts receivable balances, a decrease in electric sales volumes, and a net decrease attributable to regulatory recovery mechanisms, partially offset by decreased fuel and purchased power costs.
•A $32 million increase in payments to settle ARO liabilities, primarily related to CCR storage facilities.
•A $23 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased to mitigate against any potential supply disruptions.
•A $17 million decrease, primarily resulting from increased coal inventory levels as less coal was purchased in 2019 due to delivery disruptions that occurred from flooding in 2019.
•A net $16 million increase in collateral posted with counterparties, primarily resulting from changes in the market prices of power and natural gas and changes in contracted commodity volumes.
•A $14 million increase in property tax paymentsmajor storm restoration costs due to higher property tax values in 2019, compared with 2018. Property tax payments in a given year are based on the preceding year’s property tax values.
•A $14 million increase in pension and postretirement benefit plan contributions.
The following items partially offset the decrease in Ameren Missouri’s cash from operating activities between periods:
•A $43 million decrease in income tax payments to Ameren (parent) pursuant to the tax allocation agreement, primarily due to the timing
of payments and lower taxable income in 2020.
•A $28 million decrease in non-Callaway Energy Center maintenance costs, primarily due to lower electric system infrastructure maintenance expenses as a result of decreased system load, disciplined cost management, the deferral of projects to future periods, and lower storm costs.
•A $22 million decrease in payments for nuclear refueling and maintenance outages at the Callaway Energy Center, as the current year refueling and maintenance outage began in October 2020, while the prior year refueling and maintenance outage was completed in the second quarter of 2019.
•A $12 million decrease in payments for the employer portion of Social Security taxes as a result of a payment deferral allowed under the Coronavirus Aid, Relief, and Economic Security Act. Half of this deferral will be paid at the end ofJanuary 2021 and the remaining half will be paid at the end of 2022.
Ameren Illinois
Ameren Illinois’ cash provided by operating activities decreased $191 million in the first nine months of 2020, compared with the year-ago period. The following items contributed to the decrease:
•A $136 million decrease resulting from decreased customer collections, primarily due to an increase in accounts receivable balances, which reflected an increase in amounts that were 30 days or greater past due or that were a part of a deferred payment arrangement, a decrease in sales volumes, and a net decrease attributable to regulatory recovery mechanisms, partially offset by decreased purchased power costs and volumes and natural gas costs.
•A $32 million increase in income tax payments to Ameren (parent) pursuant to the tax allocation agreement, primarily due to the timing of payments in 2020.
•A $17 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased to mitigate against any potential supply disruptions.
•An $11 million increase in interest payments, primarily due to an increase in the average outstanding debt.
•Refunds paid in 2020 of $9 million associated with the November 2013 FERC complaint case, as discussed in Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.
•A net $9 million decrease in collateral received from counterparties, primarily resulting from changes in the market prices of power and natural gas, changes in contracted commodity volumes, and decreases resulting from renewable energy contracts entered into pursuant to the FEJA.
•A $7 million increase in pension and postretirement benefit plan contributions.
The decrease in Ameren Illinois’ cash from operating activities between periods was partially offset by a $10 million decrease in payments for the employer portion of Social Security taxes as a result of a payment deferral allowed under the Coronavirus Aid, Relief, and Economic Security Act. Half of this deferral will be paid at the end of 2021 and the remaining half will be paid at the end of 2022.storm.
Cash Flows from Investing Activities
Ameren’s cash used in investing activities increased $183$205 million during the first ninethree months of 2020,2021, compared with the year-ago period, primarily as a result of a $123$193 million increase in cash paid for the acquisition of wind generation assets and a $58 million increase in capital expenditures. Partially offsetting capital expenditureexpenditures, which were driven by increases at Ameren Missouri and Ameren Illinois, discussed below, ATXI's capital expenditures decreased $37 million,partially offset by a decrease at ATXI primarily as a result of decreased Illinois Rivers transmission line expenditures, on the Mark Twain project as the projectit was placed in service in 2019. CashDecember 2020. The increase in Ameren’s cash used in investing activities also increased $35was partially offset by a $34 million decrease due to the timing of nuclear fuel expenditures and $26a $13 million decrease due to net investment activity in the nuclear decommissioning trust fund at Ameren Missouri during the first nine months of 2020, compared with the year-ago period.Missouri.
Ameren Missouri’s cash used in investing activities increased $92$70 million during the first ninethree months of 2020,2021, compared with the year-ago period, primarily as a result of a $35$193 million increase in cash paid for the acquisition of wind generation assets and a $63 million increase in capital expenditures, primarily related to electric delivery infrastructure upgrades, electric distribution system reliability projects, and generator repairs to the Callaway Energy Center. The increase in Ameren Missouri’s cash used in investing activities was partially offset by a $139 million decrease in net money pool advances, a $34 million decrease due to the timing of nuclear fuel expenditures, a $27 million increase in capital expenditures, and a $26$13 million increasedecrease due to net investment activity in the nuclear decommissioning trust fund compared with the year-ago period. Ameren Missouri's increase in capital expenditures was primarily related to electric delivery infrastructure upgrades and electric transmission system reliability projects.fund.
Ameren Illinois’ cash used in investing activities increased $127$14 million during the first ninethree months of 2020,2021, compared with the year-ago period, primarily due to a $131 millionan increase in capital expenditures, primarily related to electric transmission system reliabilitysoftware and communication network projects.
Cash Flows from Financing Activities
Cash provided by, or used in, financing activities is a result of our financing needs, which depend on the level of cash provided by operating activities, the level of cash used in investing activities, the level of dividends, and our long-term debt maturities, among other things. As a result of capital market volatility, due, in part, to the COVID-19 pandemic, and to increase net available liquidity, Ameren (parent) accelerated a debt issuance to April 2020, which had been planned for later in 2020, and used a portion of the proceeds to repay $350 million
of senior unsecured notes held by Ameren (parent) in October 2020.
Ameren’s cash provided by consolidated financing activities increased $466$374 million during the first ninethree months of 2020,2021, compared with the year-ago period. During the first ninethree months of 2020,2021, Ameren utilized proceeds from the issuance of $1,263$450 million of long-term debt for general corporate purposes, including to repay then-outstanding short-term debt, and to fund, in part, investing activities. Ameren also utilized net proceeds from commercial paper issuances of $399 million and cash on hand to fund operating activities, including short-termincreased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. In addition, Ameren received cash proceeds of $113 million from the settlement of the remaining portion of the forward sale agreement of common stock that were used to fund a portion of Ameren Missouri’s wind generation investments. In comparison, during the first three months of 2020, Ameren utilized proceeds of $640 million from a long-term debt incurred in connection with the repaymentissuance, credit facility borrowings, and net commercial paper issuances to repay at maturity of long-term debt of $85 million and to fund, in part, investing activities. During the first ninethree months of 2020, Ameren repaid net short-term debt of $168 million. In comparison, during the first nine months of 2019, Ameren utilized proceeds from the issuance of $900 million of long-term debt to repay then-outstanding short-term debt, including short-term debt incurred in connection with the repayment at maturity of long-term debt of $329 million. During 2019, Ameren repaid net short-term debt of $53 million, and used cash provided by financing activities to fund, in part, investing activities. During the first nine months of 2020,2021, Ameren paid common stock dividends of $367$140 million, compared with $350$122 million in dividend payments in the year-ago period.
Ameren Missouri’s cash provided by financing activities provided cash of $139increased $44 million during the first ninethree months of 2020,2021, compared to using cash of $49 million during the year-ago period. During the first ninethree months of 2021, Ameren Missouri utilized net proceeds from commercial paper issuances of $204 million and cash on hand to fund operating activities, including increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. Additionally, Ameren Missouri utilized a $113 million capital contribution from Ameren (parent) to fund, in part, its wind generation expenditures. In comparison, during the first three months of 2020, Ameren Missouri utilized net proceeds from the issuance of $465 million ofin long-term debt to repay then-outstanding short-term debt,commercial paper issuances, including short-term debt incurred in connection with the repayment at maturity of long-term debt of $85 million. During the first nine months ofIn 2020, Ameren Missouri repaid net short-term debt of $234$104 million and used cash provided by financing activities to fund, in part, investing activities. In comparison, during the first nine months of 2019, Ameren Missouri utilized net proceeds from the issuance of $450 million in long-term debt to repay then-outstanding short-term debt, including short-term debt incurred in connection with the repayment at maturity of long-term debt of $329 million, and net commercial paper issuances of $89 million to fund, in part, investing activities. During the first nine months of 2020, Ameren Missouri did not pay common stock dividends, compared with $250 million in dividend payments in the year-ago period, due to an expected increase in investing cash needs, including the anticipated acquisition of wind generation facilities.
Ameren Illinois’ cash provided by financing activities increased $303$220 million during the first ninethree months of 2020,2021, compared with the year-ago period. During the first ninethree months of 2020, Ameren Illinois received $350 million in capital contributions from Ameren (parent), and utilized net proceeds from commercial paper issuance of $189 million to fund, in part, investing activities. In comparison, during the first nine months of 2019,2021, Ameren Illinois utilized net proceeds from commercial paper issuances of $237$323 million to fund operating activities, including increased purchases in natural gas for resale and purchased power costs as a result of the significant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, and to fund, in part, investing activities. Ameren Illinois received a $40 million capital contribution from Ameren (parent), the first three months of 2021, compared to a $100 million capital contribution in the year-ago period. In addition, Ameren Illinois repaid $19 million of money pool borrowings and redeemed $13 million of preferred stock in the current year period.
See Long-term Debt and Equity in this section for additional information on maturities and issuances of long-term debt.debt, issuances of common stock, and redemptions of preferred stock.
Credit Facility Borrowings and Liquidity
The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report for additional information on credit agreements, commercial paper issuances, Ameren’s money pool arrangements and related borrowings, and relevant interest rates.
The following table presents Ameren’s consolidated liquidity as of September 30, 2020:March 31, 2021:
| | | | | | | | | |
| | | | | |
Ameren (parent) and Ameren Missouri: | | | | | |
Missouri Credit Agreement – borrowing capacity | | | | | $ | 1,200 | |
| | | | | |
| Less: Ameren (parent) commercial paper outstanding | | | | | 19233 | |
| Less: Ameren Missouri commercial paper outstanding | | | | | 204 | |
| | | | | |
| Less: Ameren Missouri letters of credit | | | | | 3 | |
| Missouri Credit Agreement – subtotal | | | | | 1,178760 | |
| Ameren (parent) and Ameren Illinois: | | | | | |
Illinois Credit Agreement – borrowing capacity | | | | | 1,100 | |
| | | | | |
| Less: Ameren (parent) commercial paper outstanding | | | | | 11129 | |
| Less: Ameren Illinois commercial paper outstanding | | | | | 242323 | |
| | | | | |
| Less: Ameren Illinois letters of credit | | | | | 21 | |
Illinois Credit Agreement – subtotal | | | | | 845647 | |
| Subtotal | | | | | $ | 2,0231,407 | |
| Add: Cash and cash equivalents | | | | | 6 | |
| Net Available Liquidity | | | | | $ | 2,0291,413 | |
The Credit Agreements, among other things, provide $2.3 billion of credit until maturity in December 2024. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report for additional information on the Credit Agreements. During the ninethree months ended September 30, 2020,March 31, 2021, Ameren (parent), Ameren Missouri, and Ameren Illinois each borrowed under the Credit Agreements and issued commercial paper. Borrowings under the Credit Agreements and commercial paper issuances are based upon available interest rates at that time of the borrowing or issuance. As a result of volatility in the capital markets, the Ameren Companies borrowed under the Credit Agreements in certain instances in the first quarter of 2020 rather than issuing commercial paper.
Ameren has a money pool agreement with and among its utility subsidiaries to coordinate and to provide for certain short-term cash and working capital requirements. As short-term capital needs arise, and based on availability of funding sources, Ameren Missouri and Ameren Illinois will access funds from the utility money pool, the Credit Agreements, or the commercial paper programs depending on which option has the lowest interest rates.
The issuance of short-term debt securities by Ameren’s utility subsidiaries is subject to FERC approval under the Federal Power Act. In March 2020, the FERC issued an orderorders authorizing Ameren Missouri and Ameren Illinois to each issue up to $1 billion of short-term debt securities which expires inthrough March 2022. In2022 and September 2020, the FERC issued an order authorizing Ameren Illinois to issue up to $1 billion of short-term debt securities, which expires in September 2022.2022, respectively. In July 2019, the FERC issued an order authorizing ATXI to issue up to $300 million of short-term debt securities, which expires in July 2021.
The Ameren Companies continually evaluate the adequacy and appropriateness of their liquidity arrangements for changing business conditions. When business conditions warrant, changes may be made to existing credit agreements or to other borrowing arrangements, or other arrangements may be made.
Long-term Debt and Equity
The following table presents Ameren’s issuances (net of any issuance premiums or discounts) of long-term debt and equity, as well as redemptions and maturities of long-term debt and redemptions of preferred stock for the ninethree months ended September 30, 2020March 31, 2021 and 2019:2020:
| | | Month Issued, Redeemed, or Matured | | 2020 | | 2019 | | | Month Issued, Redeemed, or Matured | | 2021 | | 2020 | |
| Issuances of Long-term Debt | Issuances of Long-term Debt | | Issuances of Long-term Debt | |
| Ameren: | Ameren: | | Ameren: | |
| 3.50% Senior unsecured notes due 2031 | April | | $ | 798 | | | $ | — | | | |
| 2.50% Senior unsecured notes due 2024 | September | | — | | | 450 | | | |
| 1.75% Senior unsecured notes due 2028 | | 1.75% Senior unsecured notes due 2028 | March | | $ | 450 | | | $ | — | | |
| | Ameren Missouri: | Ameren Missouri: | | Ameren Missouri: | |
| 2.95% First mortgage bonds due 2030 | 2.95% First mortgage bonds due 2030 | March | | $ | 465 | | | $ | — | | | 2.95% First mortgage bonds due 2030 | March | | $ | — | | | $ | 465 | | |
| 3.50% First mortgage bonds due 2029 | March | | — | | | 450 | | | |
| | | Total Ameren long-term debt issuances | Total Ameren long-term debt issuances | | $ | 1,263 | | | $ | 900 | | | Total Ameren long-term debt issuances | | $ | 450 | | | $ | 465 | | |
| Issuances of Common Stock | Issuances of Common Stock | | Issuances of Common Stock | |
| Ameren: | Ameren: | | Ameren: | |
| DRPlus and 401(k) | Various | | $ | 37 | | (a) (b) | $ | 54 | | (a) (b) | |
| Total common stock issuances | | $ | 37 | | | $ | 54 | | | |
DRPlus and 401(k) (a) | | DRPlus and 401(k) (a) | Various | | $ | 12 | | | $ | 13 | | |
Forward sale agreement (b) | | Forward sale agreement (b) | February | | 113 | | | — | | |
Total common stock issuances (c) | | Total common stock issuances (c) | | $ | 125 | | | $ | 13 | | |
| Total Ameren long-term debt and common stock issuances | Total Ameren long-term debt and common stock issuances | | $ | 1,300 | | | $ | 954 | | | Total Ameren long-term debt and common stock issuances | | $ | 575 | | | $ | 478 | | |
| Redemptions and Maturities of Long-term Debt | | |
| Maturities of Long-term Debt | | Maturities of Long-term Debt | |
| Ameren Missouri: | Ameren Missouri: | | Ameren Missouri: | |
| 5.00% Senior secured notes due 2020 | 5.00% Senior secured notes due 2020 | February | | $ | 85 | | | $ | — | | | 5.00% Senior secured notes due 2020 | February | | $ | — | | | $ | 85 | | |
| 6.70% Senior secured notes due 2019 | February | | — | | | 329 | | | |
| | | Total Ameren long-term debt maturities | | Total Ameren long-term debt maturities | | $ | — | | | $ | 85 | | |
| Redemptions of Preferred Stock | | Redemptions of Preferred Stock | |
| Ameren Illinois: | Ameren Illinois: | | Ameren Illinois: | |
| 5.70% First mortgage bond due 2024 | September | | — | | | (c) | | |
| Total Ameren long-term debt redemptions and maturities | | $ | 85 | | | $ | 329 | | | |
| 6.625% Series | | 6.625% Series | March | | $ | 12 | | | $ | — | | |
| 7.75% Series | | 7.75% Series | March | | 1 | | | — | | |
| Total Ameren Illinois preferred stock redemptions | | Total Ameren Illinois preferred stock redemptions | | $ | 13 | | | $ | — | | |
| Total Ameren long-term debt maturities and preferred stock redemptions | | Total Ameren long-term debt maturities and preferred stock redemptions | | $ | 13 | | | $ | 85 | | |
(a)Ameren issued a total of 0.50.1 million and 0.70.2 million shares of common stock under its DRPlus and 401(k) plan in the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, respectively.
(b)Ameren issued 1.6 million shares of common stock to settle the remainder of the forward sale agreement.
(c)Excludes 0.5 million and 0.80.5 million shares of common stock valued at $38$33 million and $54$38 million issued for no cash consideration in connection with stock-based compensation for the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, respectively.
(c)Less than $1 million
In October 2020, Ameren, Ameren Missouri, and Ameren Illinois filed a Form S-3 shelf registration statement with the SEC, registering the issuance of an unspecified amount of certain types of securities. This registration statement became effective immediately upon filing and expires in October 2023.
See Note 4 – Long-Term Debt and Equity Financings under Part I, Item 1, of this report for additional information, including proceeds from issuances of long-term debt, the use of those proceeds and Ameren’s forward equity sale agreement relating to 7.5 million shares of common stock, Ameren Missouri's October 2020 issuance of $550 million in first mortgage bonds, Ameren (parent)'s October 2020 redemption of $350 million of senior unsecured notes, and Ameren (parent)’s capital contributions to Ameren Illinois.agreement.
Indebtedness Provisions and Other Covenants
At March 31, 2021, the Ameren Companies were in compliance with the provisions and covenants contained in their credit agreements, indentures, and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report and Note 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for a discussion of provisions (and applicable cross-default
provisions) and covenants contained in our credit agreements, in ATXI’s note purchase agreement, and in certain of the Ameren Companies’ indentures and articles of incorporation.
At September 30, 2020, the Ameren Companies were in compliance with the provisions and covenants contained in their credit agreements, indentures, and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement.
We consider access to short-term and long-term capital markets to be a significant source of funding for capital requirements not satisfied by cash provided by our operating activities. Inability to raise capital on reasonable terms, particularly during times of uncertainty in the capital markets, could negatively affect our ability to maintain and expand our businesses. After assessing its current operating performance, liquidity, and credit ratings (see Credit Ratings below), Ameren, Ameren Missouri, and Ameren Illinois each believes that it will continue to have access to the capital markets on reasonable terms. However, events beyond Ameren’s, Ameren Missouri’s, and Ameren Illinois’ control may create uncertainty in the capital markets or make access to the capital markets uncertain or limited. Such events could increase our cost of capital and adversely affect our ability to access the capital markets.
Dividends
The amount and timing of dividends payable on Ameren’s common stock are within the sole discretion of Ameren’s board of directors. Ameren’s board of directors has not set specific targets or payout parameters when declaring common stock dividends, but it considers various factors, including Ameren’s overall payout ratio, payout ratios of our peers, projected cash flow and potential future cash flow requirements, historical earnings and cash flow, projected earnings, impacts of regulatory orders or legislation, and other key business
considerations. Ameren expects its dividend payout ratio to be between 55% and 70% of annual earnings over the next few years. On October 9, 2020,May 7, 2021, Ameren’s board of directors declared a quarterly common stock dividend of 51.555 cents per share payable on December 31, 2020,June 30, 2021, to shareholders of record on DecemberJune 9, 2020, resulting in an annualized equivalent dividend rate of $2.06 per share. The previous annualized equivalent dividend rate, based on the common stock dividend declared and paid in the third quarter of 2020, was $1.98 per share.2021.
See Note 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for additional discussion of covenants and provisions contained in certain of the Ameren Companies’ financial agreements and articles of incorporation that would restrict the Ameren Companies’ payment of dividends in certain circumstances. At September 30, 2020,March 31, 2021, none of these circumstances existed at Ameren, Ameren Missouri, or Ameren Illinois and, as a result, these companies were not restricted from paying dividends.
The following table presents common stock dividends declared and paid by Ameren Corporation to its common shareholders and by Ameren subsidiaries to their parent, Ameren Corporation, for the ninethree months ended September 30,March 31, 2021 and 2020 and 2019:
| | | Nine Months | | Three Months |
| | 2020 | | 2019 | | 2021 | | 2020 |
| Ameren | Ameren | $ | 367 | | | $ | 350 | | Ameren | $ | 140 | | | $ | 122 | |
| Ameren Missouri | — | | | 250 | | |
| | | ATXI | ATXI | — | | | 15 | | ATXI | 25 | | | — | |
Commitments
For a listingAs of ourMarch 31, 2021, there have been no material changes other than in the ordinary course of business related to cash requirements arising from contractual obligations provided in Item 7 of the Form 10-K for the year ended December 31, 2020, with the exception of Ameren parent’s debt issuance discussed in Long-Term Debt and commitments, see Other Obligations in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report. See Note 11 – Retirement Benefits under Part I, Item 1, of this report for information regarding expected minimum funding levels for our pension plan.Equity section above.
Off-balance-sheet Arrangements
At September 30, 2020,March 31, 2021, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than the forward sale agreement relating to common stock and variable interest entities. See Note 1 – Summary of Significant Accounting Policies under Part I, Item 1, of this report for further detail concerning variable interest entities. See Note 5 – Long-Term Debt and Equity under Part II, Item 8, of the Form 10-K for further detail concerning the forward sale agreement relating to common stock.
Credit Ratings
Our credit ratings affect our liquidity, our access to the capital markets and credit markets, our cost of borrowing under our credit facilities and our commercial paper programs, and our collateral posting requirements under commodity contracts.
The following table presents the principal credit ratings by Moody’s and S&P, as applicable, effective on the date of this report:
| | | | | | | | | | | | | | |
| | Moody’s | | S&P |
| Ameren: | | | | |
| Issuer/corporate credit rating | | Baa1 | | BBB+ |
| Senior unsecured debt | | Baa1 | | BBB |
| Commercial paper | | P-2 | | A-2 |
| Ameren Missouri: | | | | |
| Issuer/corporate credit rating | | Baa1 | | BBB+ |
| Secured debt | | A2 | | A |
| Senior unsecured debt | | Baa1 | | Not Rated |
| Commercial paper | | P-2 | | A-2 |
| Ameren Illinois: | | | | |
| Issuer/corporate credit rating | | A3 | | BBB+ |
| Secured debt | | A1 | | A |
| Senior unsecured debt | | A3 | | BBB+ |
| Commercial paper | | P-2 | | A-2 |
| ATXI: | | | | |
| Issuer credit rating | | A2 | | Not Rated |
| Senior unsecured debt | | A2 | | Not Rated |
A credit rating is not a recommendation to buy, sell, or hold securities. It should be evaluated independently of any other rating. Ratings are subject to revision or withdrawal at any time by the rating organization.
Collateral Postings
Any weakening of our credit ratings may reduce access to capital and trigger additional collateral postings and prepayments. Such changes may also increase the cost of borrowing, resulting in an adverse effect on earnings. Cash collateral postings and prepayments made with external parties, including postings related to exchange-traded contracts, and cash collateral posted by external parties were immaterial at September 30, 2020.March 31, 2021. A sub-investment-grade issuer or senior unsecured debt rating (below “Baa3” from Moody’s or below “BBB-” from S&P) at September 30, 2020,March 31, 2021, could have resulted in Ameren, Ameren Missouri, or Ameren Illinois being required to post additional collateral or other assurances for certain trade obligations amounting to $167$117 million, $150$104 million, and $17$13 million, respectively.
Changes in commodity prices could trigger additional collateral postings and prepayments. Based on credit ratings at September 30, 2020,March 31, 2021, if market prices were 15% higher or lower than September 30, 2020March 31, 2021 levels in the next 12 months and 20% higher or lower thereafter through the end of the term of the commodity contracts, then Ameren, Ameren Missouri, or Ameren Illinois could be required to post an immaterial amount, compared to each company’s liquidity, of collateral or other assurances for certain trade obligations.
OUTLOOK
Below are some key trends, events, and uncertainties that may reasonably affect our results of operations, financial condition, or liquidity, as well as our ability to achieve strategic and financial objectives, for 20202021 and beyond. The continued effect of the COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. We continue to assess the impacts the COVID-19 pandemic is having on our businesses, including but not limited to impacts on our liquidity; demand for residential, commercial, and industrial electric and natural gas services; more flexiblechanges in deferred payment plansarrangements for customers; the timing and extent to which recovery of incremental costs incurred, net of savings, and forgone customer late fee revenues at Ameren Missouri is allowed by the MoPSC; changes in our ability to disconnect customers for nonpayment; bad debt expense; supply chain operations; the availability of our employees and contractors; counterparty credit; capital construction; infrastructure operations and maintenance; energy-efficiency programs; and pension valuations. For additional information regarding recent rate orders, lawsuits, and pending requests filed with state and federal regulatory commissions, including those discussed below, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K.
Operations
•In the first ninethree months of 2020, we have experienced a net decrease in2021, our sales volumes, which have been, and continue to be, affected by the COVID-19 pandemic, among other things. Further, ourthings, were comparable to the same period in 2020, excluding the estimated effects of weather and customer energy efficiency programs. We expect a gradual improvement in sales volumes in 2021, compared to 2020. Our customers’ payment for services has been adversely affected by the COVID-19 pandemic, which has led to an increase in our accounts receivable balances that are past due or that are a part of a deferred payment arrangement. Because of their regulatory frameworks, Ameren Illinois’ and ATXI’s revenues are largely decoupled from changes in sales volumes. Additionally, Ameren Illinois’ electric distribution and natural gas distribution businesses have bad debt riders, which provide for recovery of bad debt write-offs, net of any subsequent recoveries. Pursuant to a June 2020 ICC order, Ameren Illinois’ electric bad debt rider provides for the recovery of bad debt expense in 2020. Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism and its earnings are exposed to increases in bad debt expense. See the Results of Operations section above for additional information on our accounts receivable balances, Ameren Illinois’ electric and natural gas bad debt riders, and changes in Ameren Missouri’s sales volumes in 2020,the first three months of 2021, compared to 2019.the same period in 2020, and sales volumes expected in 2021, compared to 2020. Additionally, see Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of the Form 10-K for information on Ameren Missouri’s and Ameren Illinois’ reinstatement of customer disconnection and late fee charges for non-payment, requests filed with the MoPSC for accounting authority orders issued by the MoPSC related to Ameren Missouri's electric and natural gas services to allow Ameren Missouri to accumulate certain costs incurred, net of savings, and forgone customer late fee revenues related to the COVID-19 pandemic for consideration of recovery in futurethe current electric and natural gas service regulatory rate reviews, and a June 2020orders issued by the ICC order in a service disconnection moratorium proceeding, which required Ameren Illinois to implement more flexible credit and collection practices and allowed for recovery of costs incurred related to the COVID-19 pandemic and forgone late fees.
•The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on investments in certain property, plant, and equipment placed in service, after September 1, 2018, and not included in base rates. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC, with all approved PISA deferrals added to rate base prospectively and recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the 15% of depreciation expense not recovered under the PISA, and earn a return at the applicable WACC for investments in renewable generation plant placed in service and not recovered under the PISA.service. Accumulated RESRAM deferrals earn carrying costs at short-term interest rates. The PISA and the RESRAM mitigate the effects of regulatory lag between regulatory rate reviews. Those investments not eligible for recovery under the PISA and the remaining 15% of certain property, plant, and equipment placed in service, unless eligible for recovery under the RESRAM, remain subject to regulatory lag. Ameren Missouri recognizes the cost of debt on PISA deferrals in revenue, instead of using the applicable WACC, with the difference recognized in revenues when recovery of such deferrals is reflected in customer rates. As a result of the PISA election, additional provisions of the law apply to Ameren Missouri, including
limitations on electric customer rate increases. Ameren Missouri does not expect to exceed these rate increase limitations in 2021. Both the rate increase limitation and the PISA are effective through December 2023, unless Ameren Missouri requests and the MoPSC approves an extension through December 2028.
•In 2018, the MoPSC issued an order approving Ameren Missouri’s MEEIA 2019 plan. The initial plan includedincludes a portfolio of customer energy-efficiency programs through December 20212022 and low-income customer energy-efficiency programs through December 2024, along with a rate-adjustment mechanism.rider. Ameren Missouri intends to invest $226$290 million over the life of the plan, including $65 million per year throughin 2021 and $70 million in 2022. The plan includes the continued use of the MEEIA rider, which allows Ameren Missouri to collect from, or refund to, customers any difference in actual MEEIA program costs and related lost electric margins and the amounts collected from customers. In addition, the plan includes a performance incentive that provides Ameren Missouri an opportunity to earn additional revenues by achieving certain customer energy-efficiency goals. In AugustIf the target goals were achieved for 2020, the MoPSC issued an order approving a unanimous stipulation and agreement establishing performance incentives for the 2022 program year. The order also approved Ameren Missouri’s energy savings results for the first year of the MEEIA 2019 program. As a result of this order and in accordance with revenue recognition guidance, Ameren Missouri recognizedadditional revenues of $6$10 million would be recognized in the third quarter of 2020. If the2021, and, if target goals are achieved for 2020, 2021 and 2022, additional revenues of $10 million, $13 million, and $11$24 million would be recognized in 2021, 2022, and 2022, respectively.2022. Incremental additional revenues of $3 million, $3 million, and $1 million may be earned for 2020, 2021, and 2022, respectively, and would be recognized in the respective following year if Ameren Missouri exceeds its targeted energy savings goals. Ameren Missouri’s ability to achieve and/or exceed targeted energy savings goals could be affected by the COVID-19 pandemic. For the year ended December 31, 2020, Ameren Missouri recognized $28 million, $11 million, and $37$6 million in revenues related to MEEIA performance incentives in 2016, 2018,incentives.
•In March 2021, Ameren Missouri filed a request with the MoPSC seeking approval to increase its annual revenues for electric service by $299 million. The MoPSC proceeding relating to the proposed electric service rate changes will take place over a period of up to 11 months, with a decision by the MoPSC expected by February 2022 and 2019, respectively.new rates effective by March 2022. Ameren Missouri cannot predict the level of any electric service rate change the MoPSC may approve, or whether any rate change that may eventually be approved will be sufficient for Ameren Missouri to recover its costs and earn a reasonable return on its investments when the rate change goes into effect.
•In March 2020, the MoPSC issued an order in Ameren Missouri’s July 2019 electric service regulatory rate review, resulting in a decrease of $32 million to Ameren Missouri’s annual revenue requirement for electric retail service. The order reduced the annualized base level of net energy costs pursuantalso approved a change in rate design, which will result in winter rates applied to May usage and summer rates applied to September usage beginning in 2021. Previously, blended rates were applied to both months’ usage. The quarterly year-over-year increases/(decreases) to 2021 earnings, compared to the FAC by approximately $115 millionsame periods in 2020, from the base level establishedeffect of the change in the MoPSC’s March 2017 electric rate order. The order also changed the annualized regulatory asset and liability amortization amounts and the base level of expenses for regulatory tracking mechanisms. On an annualized basis, these changes reflectdesign are estimated at approximately$20 millionof increased revenues and approximate decreases in purchased power expenses of$15 million, other operating and maintenance expenses of$60 ($50) million and income tax expenses of $20 million. Additionally, the annual revenue requirement incorporated increases of approximately $50 million for the reduction in sales volumes resulting from MEEIA programssecond and approximately $50 million of depreciation and amortization expense for amounts previously deferred under PISA. The increase in the annual revenue requirement related to the
MEEIA programs is seasonally weighted to the summer. One of the stipulation and agreements approved by the MoPSC’s March 2020 order states that the net impact of the revenue and expense changes noted above reflects a 9.4% to 9.8% ROE on an unspecified percent of common equity applicable to rate base.The new rates, base level of expenses, and amortizations became effective on April 1, 2020.
•Ameren Missouri expects to file for electric and natural gas service regulatory rate reviews in the first half of 2021. Ameren Missouri expects key drivers of the electric service regulatory rate review to include increased infrastructure investments and other costs of service. Electric base rates were last reset on April 1, 2020, and are required to be reset at least every four years to allow for continued use of the FAC. Natural gas base rates were last reset on September 1, 2019.third quarter comparisons, respectively.
•Ameren Illinois and ATXI use a forward-looking rate calculation with an annual revenue requirement reconciliation for each company’s electric transmission business. Based on expected rate base growth and the currently allowed 10.52% ROE, which includes a 50 basis point adder for participation in an RTO, the revenue requirements included in 20202021 rates for Ameren Illinois’ and ATXI’s electric transmission businesses are $313$380 million and $192$200 million, respectively. These revenue requirements represent an increase in Ameren Illinois’ and ATXI’s revenue requirements of $16$67 million and $15$8 million, respectively, from the revenue requirements reflected in 20192020 rates, primarily due to expected rate base growth. These rates will affect Ameren Illinois’ and ATXI’s cash receipts during 2020,2021, but will not determine their respective electric transmission service operating revenues, which will instead be based on 20202021 actual recoverable costs, rate base, and a return on rate base at the applicable WACC as calculated under the FERC formula ratemaking framework.
•There are various legal proceedings pending that could result in a change to theThe allowed base ROE for FERC-regulated transmission rate baserates previously charged under the MISO tariff.tariff is the subject of an appeal filed with the United States Court of Appeals for the District of Columbia Circuit. Depending on the outcome of the appeal, the transmission rates charged during previous periods and the currently effective rates may be subject to change. Additionally, in March 2019, the FERC issued a Notice of Inquiry regarding its transmission incentives policy. In March 2020, the FERC issued a Notice of Proposed Rulemaking on its transmission incentives policy, which addressed many of the issues in the Notice of Inquiry on transmission incentives. The Notice of Proposed Rulemaking included an increased incentive in the allowed base ROE for participation in an RTO to 100 basis points from the current 50 basis points and revised the parameters for awarding incentives, while limiting the overall incentives to a cap of 250 basis points, among other things. In April 2021, the FERC issued a Supplemental Notice of Proposed Rulemaking, which proposes to modify the Notice of Proposed Rulemaking’s incentive for participation in an RTO by limiting this incentive for utilities that join an RTO to 50 basis points and only allowing them to earn the incentive for three years, among other things. If this proposal is included in a final rule, Ameren Illinois and ATXI would no longer be eligible for the 50 basis point RTO incentive adder, prospectively. The FERC is under no deadline to issue a final rule on this matter. Ameren is unable to predict the ultimate impact of any changes to the FERC’s incentives policy, or any further order on base ROE. A 50 basis point change in the FERC-allowed base ROE would affect Ameren’s and Ameren Illinois’ annual net income by an estimated $10$11 million and $6$7 million, respectively, based on each company’s 20202021 projected rate base.
•Ameren Illinois’ electric distribution service performance-based formula ratemaking framework allows Ameren Illinois to reconcile electric distribution service rates to its actual revenue requirement on an annual basis. If a given year’s revenue requirement varies from the amount collected from customers, an adjustment is made to electric operating revenues with an offset to a regulatory asset or liability to
reflect that year’s actual revenue requirement, independent of actual sales volumes. The regulatory balance is then collected from, or refunded to, customers within two years from the end of the year. Unless extended by legislation, the ability to conduct annual updates to performance-based formula ratemaking frameworkrates expires at the end of 2022. If not extended, Ameren Illinois would then be required to establish future rates through a traditional regulatory rate review with the ICC, which would allow the use of a future test year, with the ICC.year. The decoupling provisions extend beyond the end of the formula ratemaking2022 by law, which ensures that Ameren Illinois’ electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes. Ameren Illinois is actively pursuing constructive ratemaking. In March 2021, the ICC issued an order approving Ameren Illinois’ requested tariff to reconcile its electric distribution service revenue requirement for a period of up to two years after the final customer rate update under performance-based formula ratemaking. To utilize the reconciliation, the ICC-approved tariff requires Ameren Illinois to file a traditional regulatory rate review for its electric distribution service, which may be based on a future test year, by the end of March in the year following the last year in which an annual performance-based formula rate update was permitted.
•In 2019,2020, the ICC issued an order in Ameren Illinois’ annual update filing that approved a $7$49 million decrease in Ameren Illinois’ electric distribution service rates beginning in January 2020.2021. Illinois law provides for an annual reconciliation of the electric distribution revenue requirement as is necessary to reflect the actual costs incurred and a return at the applicable WACC on year-end rate base in a given year with the revenue requirement that was reflected in customer rates for that year. Consequently, Ameren Illinois’ 20202021 electric distribution service revenues will be based on its 20202021 actual recoverable costs, 20202021 year-end rate base, and a return at the applicable WACC, as calculated underwith the Illinois performance-based formula ratemaking framework.ROE based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. As of September 30, 2020,March 31, 2021, Ameren Illinois expects its 20202021 electric distribution year-end rate base to be $3.4$3.7 billion. The 2020With or without extension of the formula ratemaking framework, the 2021 revenue requirement reconciliation will be collected from, or refunded to, customers in 2022.2023. A 50 basis point change in the annual average of the monthly yields of the 30-year United States Treasury bonds would result in an estimated $9$10 million change in Ameren’s and Ameren Illinois’ annual net income, based on Ameren Illinois’ 20202021 projected year-end rate base.base, including electric energy-efficiency investments. Ameren Illinois’ allowed ROE for the first ninethree months of 2020 and 20192021 was based on an expectedestimated annual average of the monthly yields of the 30-year United States Treasury bonds of 1.5% and 2.5%, respectively.2.37%.
•In April 2020,2021, Ameren Illinois filed its annual electric distribution service performance-based formula rate update with the ICC, requesting a reductionan increase of $45$64 million in its rates. An ICC decision in this proceeding is expected by December 2020,2021, with new rates effective January 2021.2022. These rates will affect Ameren Illinois' cash receipts during 2021,2022, but will not affect electric distribution service revenues, which will be based on 20212022 actual recoverable costs, 20212022 year-end rate base, and a return at the applicable WACC as calculated under the Illinois performance-based formula ratemaking framework.
•In SeptemberJanuary 2021, the ICC issued an order in Ameren Illinois’ February 2020 Ameren Illinois filed a revised request seekingnatural gas delivery service regulatory rate review, which resulted in an increase to increase its annual revenues for natural gas delivery service by $97 million, which includes an estimated $46 million of annual revenues that would otherwise be recovered$76 million. The new rates became effective in January 2021. As a result of this order, the rate base under the QIP and other riders. A decision by the ICCwas reset to zero. Ameren Illinois used a 2021 future test year in this proceedingproceeding. The order also approved the implementation of a change in rate design, which concentrates more revenues in the winter heating season due to an increase in volumetric rates and a decrease in fixed customer rates. As such, the change in rate design will have an impact on interim period 2021 earnings, compared to 2020, but is required by January 2021, with new ratesnot expected to be effectivematerially affect annual earnings comparisons. The quarterly year-over-year increases/(decreases) to 2021 earnings, compared to the same periods in February 2021. Ameren Illinois cannot predict2020, from the levelcombined effect of any delivery service rate change the ICC may approve, nor whether any rate change that may eventually be approved will be sufficient to enable Ameren Illinois to earn a reasonable return on investments when the rate changes go into effect.increase and the change in rate design are estimated at $17 million, ($7) million, and $7 million for the first quarter, third quarter, and fourth quarter comparisons, respectively.
•AmerenPursuant to Illinois earns a return at the applicable WACC on its electric energy-efficiency program investments.law, 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. Pursuant to the FEJA, Ameren Illinois plans to invest up to approximately $100 million per year in electric energy-efficiency programs through 2024, and will earn a return on those investments.2025. While the ICC has approved a plan consistent with this spending level through 2021, the ICC has the ability to reduce the amount of 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 performance-based formula ratemaking framework. In March 2021, Ameren Illinois filed with the ICC an energy-efficiency plan which includes annual investments in electric energy-efficiency programs up to approximately $100 million per year from 2022 through 2025. A decision by the ICC in this proceeding is expected by September 2021.
•In February 2020,During its return to full power after the MoPSC issued an order approving a stipulation and agreement allowing Ameren Missouri to defer and amortize maintenance expenses related to scheduled refueling and maintenance outages at its Callaway Energy Center. Maintenance expenses associated withcompletion of the fall 2020last refueling and maintenance outage in late December 2020, the Callaway Energy Center experienced a non-nuclear operating issue related to its generator. A thorough investigation of this matter was conducted. Work continues to replace certain key components of the generator in order to return the energy center to service. Ameren Missouri expects generator repairs of approximately $65 million, which are beingexpected to be largely capital expenditures. Due to the long lead time for the manufacture, repair, and installation of the components, the energy center is expected to return to service in July 2021. In April 2021, Ameren Missouri’s insurance claims were accepted by NEIL, which are expected to cover a significant portion of the
capital expenditures and replacement power costs. Replacement power costs of up to $4.5 million weekly are covered by insurance after March 17, 2021. Insurance recoveries related to replacement power costs will be reflected in electric operating revenues and included in net energy costs under the FAC. Insurance recoveries related to the capital expenditures will be reflected as a reduction to property, plant, and equipment. For the duration of the unplanned outage, Ameren Missouri expects an increase to its purchased power expense and a decrease to its off-system sales, with changes to both items recovered through the FAC. Ameren Missouri does not expect a significant increase to other operations and maintenance expense as a result of the unplanned outage. Pursuant to a February 2020 MoPSC order, Ameren Missouri deferred, as incurred, as a regulatory asset, and will be amortized after completiona total of the outage. Maintenance expenses will be amortized over the period between refueling and maintenance outages, which is approximately 18 months. Ameren Missouri's scheduled fall 2020 outage began in early October 2020. Ameren Missouri expects to incur approximately $40$39 million in maintenance expenses related to this outage. During aits scheduled fall 2020 outage, depending onwhich it began to amortize in January 2021. The regulatory asset will be amortized until the availabilitycompletion of its other generation sources and the market prices for power, Ameren Missouri’s purchased power costs may increase and the amount of excess power available for sale may decrease versus non-outage years. Changes in purchased power costs and excess power available for sale are included in the FAC, which results in limited impacts to earnings. Prior to 2020, maintenance expenses fornext refueling and maintenance outages were expensed as incurred.outage, which is scheduled for the spring of 2022.
•Ameren Missouri and Ameren Illinois continue to make infrastructure investments and expect to seek increases to electric and natural gas rates to recover the cost of investments and earn an adequate return. Ameren Missouri and Ameren Illinois will also seek new, or to maintain existing, legislative solutions to address regulatory lag and to support investment in their utility infrastructure for the benefit of their customers. Ameren Missouri and Ameren Illinois continue to face cost recovery pressures, including limited economic growth in their service territories, economic impacts of the COVID-19 pandemic, customer conservation efforts, the impacts of additional customer energy-efficiency programs, and increased customer use of increasingly cost-effective technological advances, including private generation and energy storage. However, over the long-term, we expect the decreased demand to be partially offset by increased demand resulting from increased electrification of the economy for efficiencies and as a means to address economy-wide CO2 emission concerns. IncreasedWe expect that increased investments, including expected future investments for environmental compliance, system reliability improvements, and potential new generation sources, will result in rate base and revenue growth but also higher depreciation and financing costs.
Liquidity and Capital Resources
•Our customers’ payment for our services has been adversely affected by the COVID-19 pandemic, resulting in a decrease to our cash flow from operations. See the Results of Operations section above for additional information on our accounts receivable balances. Further, our liquidity and our capital expenditure plans could be adversely affected by other impacts resulting from the COVID-19 pandemic, including but not limited to potential impacts on our ability to access the capital markets on reasonable terms and when needed, Ameren Missouri’s expected wind generation acquisitions,additions remaining in 2021, and the timing of tax payments and the utilization of tax credits. We expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, however, disruptions to the capital markets and the ability of our suppliers and contractors to perform as required under their contracts could impact the execution of our capital investment strategy. For further discussion on the impacts to our ability to access the capital markets and Ameren Missouri’s expected wind generation acquisitions,additions remaining in 2021, see below.
•In February 2020,2021, Ameren Missouri filed an update to its Smart Energy Plan with the MoPSC, which includes a five-year capital investment overview with a detailed one-year plan for 2020.2021. The plan is designed to upgrade Ameren Missouri’s electric infrastructure and includes investments that will upgrade the grid and accommodate more renewable energy. Investments under the plan are expected to total approximately $7.6$8.4 billion over the five-year period from 20202021 through 2024,2025, with expenditures largely eligible for recoveryrecoverable under the PISA and the RESRAM. These investments exclude incremental renewable generation investment opportunities of 950 megawatts by 2024, which are included in Ameren Missouri's 2020 IRP discussed below. The planned investments beyond 2023 included in the five-year range above2024 and 2025 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA. As a part of its Smart Energy Plan, Ameren Missouri expects to build solar generation facilities, including utility scale facilities and nonresidential customer site facilities. In September 2019, Ameren Missouri filed for certificates of convenience and necessity with the MoPSC to build three solar-plus-storage facilities. In June 2020, Ameren Missouri withdrew its application for the certificates of convenience and necessity following intervenor feedback. Ameren Missouri is evaluating new solar generation facilities as a part of its integrated resource plan, which was filed in September 2020.PISA through December 2028.Also in 2019, the MoPSC approved Ameren Missouri’s Charge Ahead program, which provides incentives for the development of over 1,000 electric vehicle charging stations along highways and at various locations in communities throughout Ameren Missouri’s service territory. The purpose of the program is to promote the development of electric vehicle charging infrastructure that will enable long-distance electric vehicle travel and encourage electrification of the transportation sector.
•In September 2020,connection with Ameren Missouri filed itsMissouri’s 2020 IRP, withAmeren established a goal of achieving net-zero carbon emissions by 2050. Ameren is also targeting a 50% CO2 emission reduction by 2030 and an 85% reduction by 2040 from the 2005 level. The plan, which is subject to review by the MoPSC whichfor compliance with Missouri law, targets cleaner and more diverse sources of energy generation, including solar, wind, hydro, and nuclear power, and supports increased investment in new energy technologies. The plan, which is subject to review by the MoPSC,It also includes expanding renewable sources by adding 3,100 megawattsMWs of renewable generation by the end of 2030 and a total of 5,400 megawattsMWs of renewable generation by 2040. These amounts include 700 MWs related to the 700 megawatts of wind generation projects discussed below,High Prairie and Atchison renewable energy centers, which are expected to be substantially complete in 2020 and fully in-service in early 2021, and will support Ameren Missouri’s compliance with the state of Missouri’s requirement of achieving 15% of native load sales from renewable energy sources by 2021, subject to customer rate increase limitations. Based on current and projected market prices for energy and for wind and solar generation technologies, among other factors, Ameren Missouri expects its ownership of these renewable resources would represent the lowest-cost option for customers.beginning in 2021. The plan also includes advancing the retirement dates of the Sioux and Rush Island coal-fired energy centers to 2028 and 2039, respectively, which are subject to the approval of a change in the assets’ depreciable lives by the MoPSC in a futureAmeren Missouri’s current electric service regulatory rate review, the continued implementation of customer energy-efficiency programs, and the expectation that Ameren Missouri will seek NRC approval for an extension of the operating license for the Callaway Energy Center beyond its current 2044 expiration date. Additionally, the plan includes retiring the Meramec and Labadie coal-fired energy centers at the end of their useful lives (by 2022 and 2042, respectively). Ameren Missouri’s plan could be affected by, among other factors: Ameren Missouri’s ability to obtain a certificate of convenience and necessity from the MoPSC, and any other required approvals for the addition of renewable resources, retirement of energy centers, and new or continued customer energy-efficiency programs; the ability of developers to meet contractual commitments and timely complete projects, which is dependent upon the availability of necessary materials and equipment, including those that are affected by the disruptions in the global supply chain caused by the COVID-19 pandemic, among other things; the availability of federal production and investment tax credits related to renewable energy and Ameren
Missouri’s ability to use such credits; the cost of wind, solar, and other renewable generation and storage technologies; changes in environmental laws or requirements,regulations, including those related to carbon emissions; energy prices and demand; and Ameren Missouri’s ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost.
•In connection with the 2020 IRP filing discussed above, Ameren established a goal of achieving net-zero carbon emissions by 2050. Ameren is also targeting a 50% CO2 emission reduction by 2030 and an 85% reduction by 2040 from the 2005 level. In order to meet these goals, among other things, the 2020 IRP includes retiring Ameren Missouri's Meramec and Labadie coal-fired energy centers at the end of their useful lives and advancing the retirement dates of its Sioux and Rush Island coal-fired energy centers. As indicated in the 2020 IRP, the Meramec, Sioux, Rush Island, and Labadie energy centers are expected to be retired by 2022, 2028, 2039, and 2042, respectively. The next integrated resource plan is expected to be filed in September 2023.
•Consistent with its 2020 IRPIn January 2021, Ameren Missouri acquired an up-to 300-MW wind generation project located in northwestern Missouri and partially placed it in service as the Atchison Renewable Energy Center. As of the date of this filing, Ameren Missouri entered into build-transfer agreements to acquire, after construction,has placed approximately half of the project in service, representing a purchase price of approximately $250 million, including an up-to 300-megawatt wind generation facility and an up-to 400-megawatt wind generation facility in 2019 and 2018, respectively. Delays to the original construction schedule have occurred in 2020 due to changes in supply and construction activities. During the third quarterimmaterial amount of 2020, all remaining wind turbine deliveries for the up-to 400-megawatt project were completed. Based on the construction schedule,transaction costs. Ameren Missouri expects thisthe remaining MWs of the project to be placed in-servicein service by the end of 2020. At this time, due to manufacturing, shipping, and other supply chain issues in 2020, and, based on an updated construction schedule from the developer, Ameren Missouri expects the up-to 300-megawatt project to be partially placed in-service by the end of 2020, and the remaining portion of the project, representing approximately $200 million of investment, to be placed in-service in the first quarter ofSeptember 2021. Ameren Missouri and the developer of the up-to 300-megawatt project continue to monitor the impact to this project's schedule.
•Through 2024,2025, we expect to make significant capital expenditures to improve our electric and natural gas utility infrastructure, with a major portion directed to our transmission and distribution systems. We estimate that we will invest up to $16.6$17.8 billion (Ameren Missouri – up to $8.4$9.3 billion; Ameren Illinois – up to $8.0$8.2 billion; ATXI – up to $0.2 billion) of capital expenditures during the period from 20202021 through 2024.2025. Ameren’s and Ameren Missouri’s estimates include the 700 megawatts300 MWs of wind generation projects discussed above,at the Atchison Renewable Energy Center, but exclude incremental renewable generation investment opportunities of 950 megawatts1,200 MWs by 2024,2025, which are included in Ameren Missouri'sMissouri’s 2020 IRP. As of the date of this filing, no contractual agreements have been entered into, and no regulatory approvals have been requested, related to these opportunities. These planned investments are based on the assumption of continued constructive regulatory frameworks, including an assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA through December 2028.
•Environmental regulations, including those related to CO2 emissions, or other actions taken by the EPA or state regulators, or requirements that may result from the NSR and Clean Air Act Litigation discussed in Note 9 – Commitments and Contingencies under Part I, Item 1, of this report, could result in significant increases in capital expenditures and operating costs. Certain of these regulations are being challenged through litigation, orRegulations enacted by a prior federal administration can be reviewed or recommended for repealand repealed by the EPA, or newand replacement or alternative regulations are being contemplated,can be proposed or adopted by the current federal administration, the EPA and state regulators. The ultimate implementation of any of these regulations, as well as the timing of any such implementation, is uncertain. However, the individual or combined effects of existing and new environmental regulations could result in significant capital expenditures, increased operating costs, or the closure or alteration of some of Ameren Missouri’s coal-fired energy centers. Ameren Missouri’s capital expenditures are subject to MoPSC prudence reviews, which could result in cost disallowances as well as regulatory lag. The cost of Ameren Illinois’ purchased power and natural gas purchased for resale could increase. However, Ameren Illinois expects that these costs would be recovered from customers with no material adverse effect on its results of operations, financial position, or liquidity. Ameren’s and Ameren Missouri’s earnings could benefit from increased investment to comply with environmental regulations if those investments are reflected and recovered on a timely basis in customer rates.
•The Ameren Companies have multiyear credit agreements that cumulatively provide $2.3 billion of credit through December 2024, subject to a 364-day repayment term for Ameren Missouri and Ameren Illinois, with the option to seek incremental commitments to increase the cumulative credit provided to $2.7 billion. See Note 3 – Short-term Debt and Liquidity under Part I, Item 1, of this report and Note 4 – Short-term Debt and Liquidity under Part II, Item 8, in the Form 10-K for additional information regarding the Credit Agreements. Ameren (parent)’s $350 million of senior unsecured notes maturing in November 2020 were repaid in October 2020 using a portion of the proceeds from Ameren (parent)’s April 2020 issuance of $800 million of senior unsecured notes. The Ameren Companies have no material maturities of long-term debt until 2022. Ameren Missouri and Ameren Illinois expectsexpect to issue long-term debt in 2021 and to use the fourth quarter of 2020.proceeds for general corporate purposes, including to repay short-term debt. With the recently completed Ameren Missouri(parent) debt issuance and availability under the Credit Agreements, as well as anticipatedthe proceeds from the recent settlement of the forward sale agreement, discussed below, Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, including the expected wind generation acquisitions,additions remaining in 2021, and financing plans. The Ameren Companies continue to monitor the effect of the COVID-19 pandemic on their liquidity, including as a result of decreased sales and increased customer nonpayment. To date, the Ameren Companies have been able to access the capital markets on reasonable terms when needed. However, there can be no assurance that significant changes in economic conditions, disruptions in the capital and credit markets, or other unforeseen events will not materially affect their ability to execute their expected operating, capital, or financing plans.
•Ameren expects its cash used for currently planned capital expenditures and dividends to exceed cash provided by operating activities over the next several years. As part of its plan to fund thesethe cash flow requirements for capital expenditures, Ameren is using newly issued shares of common stock, rather than market-purchased shares, to satisfy requirements under the DRPlus and employee benefit plans and expects to continue to do so through at least 2024.2025. Ameren expects these issuances to provide equity of about $100 million annually. Ameren also plans In addition to issue incrementalthe issuance of common equity to fund ashares in connection with the 2021 settlement of the remaining portion of Ameren Missouri’s wind generation investments through the physical settlement of the forward sale agreement, discussed below. Additionally, Ameren plans to issue incremental equity of about $150 million annuallyin 2021 and about $300 million each year from 20212022 to 2024. Incremental renewable generation investment opportunities included in2025. Ameren Missouri’s 2020 IRP may result in the need for additional equity.expects to establish an at-the-market equity program that will allow Ameren to meet equity needs through 2023, subject to market conditions and other factors. Ameren expects its equity to total capitalization to be about 45% through the period ending December 2024,31, 2025, with the long-term intent to support solid investment-grade credit ratings. Ameren Missouri and Ameren Illinois expect to fund cash flow needs through debt issuances, adjustments of dividends to Ameren (parent), and/or capital contributions from Ameren (parent).
•
In August 2019, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million shares of common stock. The forward sale agreement can be settled at Ameren’s discretion on or prior to March 31, 2021. On a settlement date or dates, if Ameren elects to physically settle the forward sale agreement, Ameren will issue shares of common stock to the counterparty at the then-applicable forward sale price.The forward sale agreement will be physically settled unless Ameren elects to settle in cash or to net share settle. If physically settled, Ameren expects to receive between $540 million and $550 million upon settlement. Ameren expects to settle a portion of the forward sale agreement in the fourth quarter of 2020 to fund, in part, Ameren Missouri's wind generation investments discussed above. See Note 5 – Long-Term Debt and Equity Financings under Part II, Item 8, of the Form 10-K for additional information.
•As of September 30, 2020,March 31, 2021, Ameren had $63$95 million in tax benefits related tofrom federal and state income tax credit carryforwards, $107 million in tax benefits from federal and state net operating loss carryforwards, and $12 million in tax benefits from federal and state income tax overpayments and outstanding refunds, which will be utilized in future periods. Ameren expects federal income tax payments at the required minimum levels from 2021 to 2025 resulting from the anticipated use of production tax credits that will be generated by Ameren Missouri’s High Prairie and Atchison renewable energy centers, existing tax net operating losses, tax credit carryforwards, and tax overpayments and outstanding refunds.
•The Coronavirus Aid, Relief, and Economic Security Act isAs a federal law enacted in March 2020. Provisions in the act include temporary changes to the utilization of net operating losses, deferralresult of the paymentsignificant increase in customer demand and prices for natural gas and electricity experienced in mid-February 2021 due to extremely cold weather, for the month of the employer portion of Social Security taxes, and additional funding for customer energy assistance, among other things. As of September 30, 2020, the implementation of the act by the Ameren Companies had no material impact to their financial statements. As of September 30, 2020, Ameren,February 2021, Ameren Missouri and Ameren Illinois have deferred $27had under-recovered commodity costs (Ameren Missouri - PGA $53 million, $12 million,FAC $50 million; Ameren Illinois - PGA $221 million). Ameren Missouri’s PGA and $10 million, respectively, of the 2020 employer portion of Social Security taxes. Half of this deferral willFAC under-recoveries are designed to be paid at the end ofcollected from customers over 12 months beginning November 2021 and the remaining half willeight months beginning October 2021, respectively. Longer recovery periods may be paid at the end of 2022.
•In 2018, legislation modifying Missouri tax law was enacted to decrease the state’s corporate income tax rate from 6.25% to 4%, effective January 1, 2020. The effect of this tax decrease is reflected in Ameren Missouri’s electric service rates that became effective on April 1, 2020. Ameren andsought by Ameren Missouri do not expect this income tax decreaseor imposed by the MoPSC to have a materiallessen the impact on net income.customer rates. Ameren Illinois’ PGA under-recovery is being collected from customers over 12 months beginning April 2021, but the collection period may be extended at Ameren Illinois’ election to lessen the impact on customer rates.
The above items could have a material impact on our results of operations, financial position, and liquidity. Additionally, in the ordinary course of business, we evaluate strategies to enhance our results of operations, financial position, and liquidity. These strategies may include acquisitions, divestitures, opportunities to reduce costs or increase revenues, and other strategic initiatives to increase Ameren’s shareholder value. We are unable to predict which, if any, of these initiatives will be executed. The execution of these initiatives may have a material impact on our future results of operations, financial position, or liquidity.
REGULATORY MATTERS
See Note 2 – Rate and Regulatory Matters under Part I, Item 1, of this report.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
There have been no material changes to the quantitative and qualitative disclosures about interest rate risk, credit risk, investment price risk, commodity price risk, and commodity supplier risk included in the Form 10-K. See Item 7A under Part II of the Form 10-K for a more detailed discussion of our market risk.
ITEM 4. CONTROLS AND PROCEDURES.
(a)Evaluation of Disclosure Controls and Procedures
As of September 30, 2020,March 31, 2021, evaluations were performed under the supervision and with the participation of management, including the principal executive officer and the principal financial officer of each of the Ameren Companies, of the effectiveness of the design and operation of such registrant’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on those evaluations, as of September 30, 2020,March 31, 2021, the principal executive officer and the principal financial officer of each of the Ameren Companies concluded that such disclosure controls and procedures are effective to provide assurance that information required to be disclosed in such registrant’s reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and such information is accumulated and communicated to its management, including its principal executive officer and its principal financial officer, to allow timely decisions regarding required disclosure.
(b)Changes in Internal Controls over Financial Reporting
There has been no change in any of the Ameren Companies’ internal control over financial reporting during their most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, each of their internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
We are involved in legal and administrative proceedings before various courts and agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in this report, will not have a material adverse effect on our results of operations, financial position, or liquidity. Risk of loss is mitigated, in some cases, by insurance or contractual or statutory indemnification. MaterialWe believe that we have established appropriate reserves for potential losses. For additional information on material legal and administrative proceedings, which are discussed in see Note 2 – Rate and Regulatory Matters, Note 9 – Commitments and Contingencies, and Note 10 – Callaway Energy Center, under Part I, Item 1, of this report, include the following: •Ameren Missouri's requests for accounting authority orders relatedreport. Pursuant to costs incurred, netItem 103(c)(3)(iii) of savings, and forgone customer late fee revenues resulting from the COVID-19 pandemic, filed with the MoPSCRegulation S-K, our policy is to disclose environmental proceedings to which a governmental entity is a party if we reasonably believe such proceedings will result in October 2020;monetary sanctions of $1 million or more.
•Ameren Illinois’ annual electric distribution service formula rate update filed with the ICC in April 2020;63
•Ameren Illinois’ natural gas delivery service regulatory rate review filed with the ICC in February 2020;
•Ameren Illinois’ annual electric energy-efficiency formula rate update filed with the ICC in May 2020;
•Ameren Illinois’ QIP reconciliation hearing with the ICC requested in March 2019;
•the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the FERC’s rehearing denials in the transmission formula rate revision cases;
•the July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the May 2020 FERC order related to the November 2013 complaint case;
•the March 2019 FERC Notice of Inquiry regarding its allowed base ROE policy;
•the March 2020 FERC Notice of Proposed Rulemaking on its transmission incentives policy;
•litigation against Ameren Missouri with respect to NSR and the Clean Air Act; and
•remediation matters associated with former MGP sites of Ameren Illinois.
ITEM 1A. RISK FACTORS.
The Form 10-K includes a detailed discussion of our risk factors. The information presented below updates, and should be read in conjunction with,There have been no material changes to the risk factors and information disclosed in Part I, Item 1A, Risk Factors in the Form 10-K.
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.
The COVID-19 pandemic continues to be a rapidly evolving situation. In the first nine months of 2020, we experienced a net decrease in our sales volumes, an increase in our accounts receivable balances that were past due or that were a part of a deferred payment arrangement, and a decline in our cash collections from customers. The continued effect of the COVID-19 pandemic on our results of operations, financial position, and liquidity in subsequent periods will depend on its severity and longevity, future regulatory or legislative actions with respect thereto, and the resulting impact on business, economic, and capital market conditions. It may also affect Ameren Missouri’s ability to recover any lost revenues or incremental costs. As a result of the COVID-19 pandemic, measures have been taken by local, state, and federal governments, such as travel bans, quarantines, and shelter-in place orders. Shelter-in-place orders began taking effect in our service territories in mid-March 2020. These orders generally required individuals to remain at home and precluded or limited the operation of businesses that were deemed nonessential. In mid-May 2020, shelter-in-place orders effective in our service territories began to be relaxed, with individuals allowed to leave their homes and nonessential businesses allowed to begin reopening. However, certain restrictions remain in place that limit individual activities and the operation of nonessential businesses. Additional restrictions may be imposed in the future. Ameren's business operations are deemed essential and are not directly impacted by the shelter-in-place orders. As a result of the COVID-19 pandemic, economic activity has been disrupted in the service territories of Ameren Missouri and Ameren Illinois. It has also caused disruptions in the capital markets, which could adversely affect our ability to access these markets on reasonable terms and when needed. These disruptions could continue for a prolonged period of time or become more severe.
We rely on the issuance of short-term and long-term debt and equity as significant sources of liquidity and funding for capital requirements not satisfied by our operating cash flow, as well as to refinance existing long-term debt. Disruptions to the capital markets as a result of the COVID-19 pandemic could negatively affect our ability to maintain and to expand our businesses. In addition, our credit ratings may be impacted by the economic conditions of the COVID-19 pandemic. The COVID-19 pandemic could lead to events beyond our control, such as further depressed economic conditions or extreme volatility in the debt, equity, or credit markets, and might create uncertainty that could increase our cost of capital or impair or eliminate our ability to access the debt, equity, or credit markets, including our ability to draw on bank credit facilities or issue commercial paper.
As a result of the COVID-19 pandemic, we have experienced and expect to continue to experience changes to our sales volumes. In the three and nine months ended September 30, 2020, compared to the same periods in 2019, Ameren Missouri experienced a reduction in commercial and industrial electric sales volumes, partially offset by increased electric sales volumes to higher margin residential customers, excluding the estimated effects of weather and customer energy-efficiency programs. While the impacts of the COVID-19 pandemic are difficult to predict, Ameren Missouri expects the net reduction in sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs, to continue in the fourth quarter of 2020, compared to the same period in 2019. The COVID-19 pandemic may continue to affect Ameren Missouri’s total electric sales volumes and sales volumes by customer class beyond 2020. Assuming a ratable change in Ameren Missouri’s electric sales volumes by month, a 1% change for the calendar year 2020 to residential, commercial, and industrial customers would affect earnings per diluted share by approximately 3 cents, 2 cents, and a half-cent, respectively. The actual change in earnings per diluted share will be affected by the timing of sales volume changes due to seasonal customer rates. Pursuant to the PISA, Ameren Missouri’s electric rates are limited to a 2.85% compound annual growth rate cap. Continued long-term declines in sales volumes, along with increased capital investments and operating costs, could result in Ameren Missouri’s inability to recover amounts exceeding the rate cap. Ameren Illinois also experienced decreases in electric and natural gas sales volumes in the three and nine months ended September 30, 2020. While the revenues from Ameren Illinois’ electric distribution business, residential and small nonresidential customers of Ameren Illinois’ natural gas distribution business, and Ameren Illinois’ and ATXI’s electric transmission businesses are decoupled from changes in sales volumes, earnings at Ameren Missouri and those associated with Ameren Illinois’ large nonresidential natural gas customers are exposed to such changes.
Our customers’ payment for our services has been adversely affected by the COVID-19 pandemic, resulting in a decrease to our cash flow from operations. Ameren Missouri suspended disconnections for customer nonpayment and charging late fees in mid-March 2020, and resumed those activities for commercial and industrial customers in mid-July 2020 and residential customers in early August 2020. Ameren Illinois resumed disconnection activities for commercial and industrial customers for nonpayment in early August 2020 and residential customers in mid-September 2020, with the exception of residential customers classified as low income, expressing a financial hardship, or relying on medical equipment. Disconnections for nonpayment for these residential customers are expected to begin in April 2021, which is after the annual winter moratorium period on disconnections from December 1, 2020 to March 31, 2021. Ameren Illinois also resumed charging late fees to all customers in late July 2020, following the suspension of both disconnections and late fees for all customers in mid-March 2020. However, future regulatory or legislative action could require suspension of customer disconnections and/or late fees, among other things, for an extended period of time. As of September 30, 2020, accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement represented 26%, 18%, and 35%, or $151 million, $49 million, and $102 million, of Ameren’s, Ameren Missouri’s, and Ameren Illinois’ customer trade receivables before allowance for doubtful accounts, respectively. As of September 30, 2019, these percentages were 13%, 9%, and 18%, or $65 million, $23 million, and $42 million, for Ameren, Ameren Missouri, and Ameren Illinois, respectively. Ameren Illinois’ electric distribution and natural gas distribution businesses have bad debt riders, which
provide for recovery of bad debt write-offs, net of any subsequent recoveries. Pursuant to a June 2020 ICC order, Ameren Illinois’ electric bad debt rider provides for the recovery of bad debt expense in 2020. Ameren Missouri does not have a bad debt rider or regulatory tracking mechanism and its earnings are exposed to increases in bad debt expense. While Ameren Missouri will be seeking recovery of certain COVID-19 pandemic related costs incurred, net of savings, and forgone customer late revenues, it could be unsuccessful in obtaining regulatory approval to recover them, which may adversely affect Ameren and Ameren Missouri’s results of operations.
In addition, suppliers and contractors may not perform as provided under their contracts. This could cause delays in construction projects, including additional delays related to Ameren Missouri’s expected acquisition of two wind generation facilities, or the performance of necessary maintenance to our electric and natural gas infrastructure, which could lead to failures of equipment that can result in unanticipated liabilities or unplanned outages. Delays in our construction projects could also result in reduced planned capital expenditures and decreased rate base growth.
Also, our businesses depend on skilled professional and technical employees. Our operations could be adversely affected if a large portion of our employees contracted COVID-19 or became quarantined at the same time. This could lead to facility shutdowns and disruptions in the delivery of electricity and natural gas to our customers. In addition, remote working arrangements increase our data security risks, including loss of data related to sensitive customer, employee, financial, and operating system information, through insider or outsider actions.
Ameren cannot predict the extent or duration of the COVID-19 pandemic or its effects on the global, national, or local economy, the capital markets, or its customers, suppliers, business continuity plans, results of operations, financial position, liquidity, planned rate base growth, or sales volumes.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Ameren Corporation, Ameren Missouri, and Ameren Illinois did not purchase equity securities reportable under Item 703 of Regulation S-K during the period from JulyJanuary 1, 2020,2021, to September 30, 2020.March 31, 2021.
ITEM 6. EXHIBITS.
The documents listed below are being filed or have previously been filed on behalf of the Ameren Companies and are incorporated herein by reference from the documents indicated and made a part hereof. Exhibits not identified as previously filed are filed herewith.
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Exhibit
Designation | | Registrant(s) | | Nature of Exhibit | | Previously Filed as Exhibit to: |
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| | | | | | |
| Instruments Defining Rights of Security Holders, Including Indentures |
| 4.1 | | Ameren
Ameren Missouri | | | | October 9, 2020March 5, 2021 Form 8-K, Exhibit 4.2,Exhibits 4.3 and 4.4, File No. 1-29671-14756 |
| Rule 13a-14(a) / 15d-14(a) Certifications |
| 31.1 | | Ameren | | | | |
| 31.2 | | Ameren | | | | |
| 31.3 | | Ameren Missouri | | | | |
| 31.4 | | Ameren Missouri | | | | |
| 31.5 | | Ameren Illinois | | | | |
| 31.6 | | Ameren Illinois | | | | |
| Section 1350 Certifications |
| 32.1 | | Ameren | | | | |
| 32.2 | | Ameren Missouri | | | | |
| 32.3 | | Ameren Illinois | | | | |
| Interactive Data Files |
| 101.INS | | Ameren Companies | | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | | |
| 101.SCH | | Ameren Companies | | Inline XBRL Taxonomy Extension Schema Document | | |
| 101.CAL | | Ameren Companies | | Inline XBRL Taxonomy Extension Calculation Linkbase Document | | |
| 101.LAB | | Ameren Companies | | Inline XBRL Taxonomy Extension Label Linkbase Document | | |
| 101.PRE | | Ameren Companies | | Inline XBRL Taxonomy Extension Presentation Linkbase Document | | |
| 101.DEF | | Ameren Companies | | Inline XBRL Taxonomy Extension Definition Document | | |
| 104 | | Ameren Companies | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | | |
The file number references for the Ameren Companies’ filings with the SEC are: Ameren, 1-14756; Ameren Missouri, 1-2967; and Ameren Illinois, 1-3672.
Each registrant hereby undertakes to furnish to the SEC upon request a copy of any long-term debt instrument not listed above that such registrant has not filed as an exhibit pursuant to the exemption provided by Item 601(b)(4)(iii)(A) of Regulation S-K.
SIGNATURES
Pursuant to the requirements of the Exchange Act, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.
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AMEREN CORPORATION
(Registrant) |
|
| /s/ Michael L. Moehn |
Michael L. Moehn
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
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UNION ELECTRIC COMPANY
(Registrant) |
|
| /s/ Michael L. Moehn |
Michael L. Moehn
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
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AMEREN ILLINOIS COMPANY
(Registrant) |
|
| /s/ Michael L. Moehn |
Michael L. Moehn
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
Date: November 5, 2020May 10, 2021
