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AILIH Ameren Illinois

Filed: 22 Feb 21, 5:22pm
0001002910aee:CommercialMemberus-gaap:IntersegmentEliminationMemberaee:AmerenIllinoisCompanyMember2019-01-012019-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
for the fiscal year ended December 31, 2020
OR
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.
1-14756Ameren Corporation43-1723446
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri 63103
(314) 621-3222
1-2967Union Electric Company43-0559760
(Missouri Corporation)
1901 Chouteau Avenue
St. Louis, Missouri 63103
(314) 621-3222
1-3672Ameren Illinois Company37-0211380
(Illinois Corporation)
10 Executive Drive
Collinsville, Illinois 62234
(618) 343-8150
Securities Registered Pursuant to Section 12(b) of the Act:
The following security is registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 and is listed on the New York Stock Exchange:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 par value per shareAEENew York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
RegistrantTitle of each class
Union Electric CompanyPreferred Stock, cumulative, no par value, stated value $100 per share
Ameren Illinois Company
Preferred Stock, cumulative, $100 par value
Depositary Shares, each representing 1/4 of a share of 6.625%
Preferred Stock, cumulative, $100 par value
Indicate by checkmark if each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Ameren CorporationYesNo
Union Electric CompanyYesNo
Ameren Illinois CompanyYesNo
Indicate by checkmark if each registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Ameren CorporationYesNo
Union Electric CompanyYesNo
Ameren Illinois CompanyYesNo
Indicate by checkmark 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.
Ameren CorporationYesNo
Union Electric CompanyYesNo
Ameren Illinois CompanyYesNo
Indicate by checkmark whether each registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Ameren CorporationYesNo
Union Electric CompanyYesNo
Ameren Illinois CompanyYesNo
Indicate by checkmark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
Ameren CorporationLarge accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
Union Electric CompanyLarge accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
Ameren Illinois CompanyLarge accelerated filerAccelerated filerNon-accelerated filer
Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Ameren Corporation
Union Electric Company
Ameren Illinois Company
Indicate by check mark whether each registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Ameren Corporation
Union Electric Company
Ameren Illinois Company
Indicate by checkmark whether each registrant is a shell company (as defined in Rule 12b-2 of the Act).
Ameren CorporationYesNo
Union Electric CompanyYesNo
Ameren Illinois CompanyYesNo
As of June 30, 2020, the aggregate market value of Ameren Corporation’s common stock, $0.01 par value, (based upon the closing price of the common stock on the New York Stock Exchange on June 30, 2020) held by nonaffiliates was $17,299,078,950. All of the shares of common stock of the other registrants were held by Ameren Corporation as of June 30, 2020.
The number of shares outstanding of each registrant’s classes of common stock as of January 29, 2021, were as follows:
RegistrantTitle of each class of common stockShares
Ameren CorporationCommon stock, $0.01 par value per share253,355,105 
Union Electric CompanyCommon stock, $5 par value per share, held by Ameren Corporation102,123,834 
Ameren Illinois CompanyCommon stock, no par value, held by Ameren Corporation25,452,373 
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the definitive proxy statement of Ameren Corporation and portions of the definitive information statements of Union Electric Company and Ameren Illinois Company for the 2021 annual meetings of shareholders are incorporated by reference into Part III of this Form 10-K.
This combined Form 10-K is separately filed by Ameren Corporation, Union Electric Company, and Ameren Illinois Company. Each registrant hereto is filing on its own behalf all of the information contained in this annual report that relates to such registrant. Each registrant hereto is not filing any information that does not relate to such registrant, and therefore makes no representation as to any such information.


TABLE OF CONTENTS
Page
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
This report contains “forward-looking” statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements should be read with the cautionary statements and important factors under the heading “Forward-looking Statements.” Forward-looking statements are all statements other than statements of historical fact, including those statements that are identified by the use of the words “anticipates,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” and similar expressions.


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.
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.
Ameren – Ameren Corporation and its subsidiaries on a consolidated basis. In references to financing activities, acquisition activities, or liquidity arrangements, Ameren is defined as Ameren Corporation, the parent.
Ameren Companies – Ameren Corporation, Ameren Missouri, and Ameren Illinois, collectively, which are individual registrants within the Ameren consolidated group.
Ameren Illinois – Ameren Illinois Company, an Ameren Corporation subsidiary that operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois, doing business as Ameren Illinois.
Ameren Illinois Electric Distribution – An Ameren Corporation and Ameren Illinois financial reporting segment consisting of the rate-regulated electric distribution business of Ameren Illinois.
Ameren Illinois Natural Gas – An Ameren Corporation and Ameren Illinois financial reporting segment consisting of the rate-regulated natural gas distribution business of Ameren Illinois.
Ameren Illinois Transmission – An Ameren Illinois financial reporting segment consisting of the rate-regulated electric transmission business of Ameren Illinois.
Ameren Missouri – Union Electric Company, an Ameren Corporation subsidiary that operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri, doing business as Ameren Missouri. Ameren Missouri is a financial reporting segment of Ameren.
Ameren Services – Ameren Services Company, an Ameren Corporation subsidiary that provides support services, such as accounting, legal, treasury, and asset management services, to Ameren (parent) and its subsidiaries.
Ameren Transmission – An Ameren Corporation financial reporting segment primarily consisting of the aggregated electric transmission businesses of Ameren Illinois and ATXI.
ARO – Asset retirement obligations.
ATXI – Ameren Transmission Company of Illinois, an Ameren Corporation subsidiary that operates a FERC rate-regulated electric transmission business in the MISO.
Baseload – The minimum amount of electric power delivered or required over a given period of time at a steady rate.
Btu – British thermal unit, a standard unit for measuring the quantity of heat energy required to raise the temperature of one pound of water by one degree Fahrenheit.
CCR – Coal combustion residuals, which include fly ash, bottom ash, boiler slag, and flue gas desulfurization materials generated from burning coal to generate electricity.
CCR Rule – Coal Combustion Residuals Rule, a rule promulgated by the EPA that established regulations for the disposal of CCR in landfills and surface impoundments, and the operation and closure of such landfills and surface impoundments.
CO2 – Carbon dioxide.
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.
Cooling degree days – The summation of positive differences between the average daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of electricity demand by residential and commercial customers for summer cooling.
Credit Agreements – The Illinois Credit Agreement and the Missouri Credit Agreement, collectively.
CSAPR – Cross-State Air Pollution Rule, an EPA rule that requires states that contribute to air pollution in downwind states to limit air emissions from fossil-fuel-fired electric generating units.
CT – Combustion turbine, used primarily for peaking electric generation capacity.
DCA – Delivery charge adjustment, a rate-adjustment mechanism that decouples natural gas revenues from actual sales volumes for Ameren Missouri’s natural gas business and allows Ameren Missouri to adjust customer rates without a traditional regulatory rate review, subject to MoPSC prudence reviews. The decoupling provisions ensure that Ameren Missouri’s natural gas revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions.
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 could have elected to pay a utility bill balance over a period of up to 24 months.
Dekatherm – A standard unit of energy equivalent to approximately one million Btus.
DOE – Department of Energy, a United States government agency.
DRPlus – Ameren Corporation’s dividend reinvestment and direct stock purchase plan.
Electric margins – Electric revenues less fuel and purchased power costs.
EMANI – European Mutual Association for Nuclear Insurance.
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EPA – Environmental Protection Agency, a United States government agency.
ERISA – Employee Retirement Income Security Act of 1974, as amended.
Excess deferred income taxes – Amounts resulting from the revaluation of deferred income taxes subject to regulatory ratemaking, which will be collected from, or returned to, customers. Deferred income taxes are revalued when federal or state income tax rates change, and the offset to the revaluation of deferred income taxes subject to regulatory ratemaking is recorded to a regulatory asset or liability.
Exchange Act – Securities Exchange Act of 1934, as amended.
FAC – Fuel adjustment clause, a fuel and purchased power rate-adjustment mechanism that allows Ameren Missouri to recover or refund, through customer rates, 95% of the variance in net energy costs from the amount set in base rates without a traditional regulatory rate review, subject to MoPSC prudence reviews.
FEJA – Future Energy Jobs Act, an Illinois law that allows Ameren Illinois to earn a return on its electric energy-efficiency investments, decouples electric distribution revenues from sales volumes, offers customer rebates for installing distributed generation, and includes extensions and modifications of certain IEIMA performance-based framework provisions, among other things. The decoupling provisions ensure that electric distribution revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions.
FERC – Federal Energy Regulatory Commission, a United States government agency that regulates utility businesses and associated activities of holding and related service companies, including Ameren, Ameren Missouri, Ameren Illinois, ATXI, and Ameren Services.
GAAP – Generally accepted accounting principles in the United States.
Heating degree days – The summation of negative differences between the average daily temperature and a 65-degree Fahrenheit base. This statistic is useful as an indicator of demand for electricity and natural gas for winter heating by residential and commercial customers.
ICC – Illinois Commerce Commission, a state agency that regulates Illinois utility businesses, including Ameren Illinois and ATXI.
IEIMA – Illinois Energy Infrastructure Modernization Act, an Illinois law that established a performance-based formula process for determining electric distribution service rates. The formula ratemaking process expires in 2022, unless extended.
Illinois Credit Agreement Ameren’s and Ameren Illinois’ $1.1 billion senior unsecured credit agreement, which expires in December 2024, unless extended.
IPA – Illinois Power Agency, a state government agency that has broad authority to assist in the procurement of electric power for residential and small commercial customers.
IRS – Internal Revenue Service, a United States government agency.
ISRS – Infrastructure system replacement surcharge, a rate-adjustment mechanism that provides Ameren Missouri’s natural gas business with recovery of, and a return on, qualifying infrastructure investments that are placed in service without a traditional regulatory rate review, subject to MoPSC prudence reviews.
Kilowatthour – A measure of electricity consumption equivalent to the use of 1,000 watts of power over one hour.
MATS – Mercury and Air Toxics Standards, an EPA rule that limits emissions of mercury and other air toxics from coal- and oil-fired electric generating units.
MEEIA – A rate-adjustment mechanism allowed under the Missouri Energy Efficiency Investment Act, a Missouri law that allows electric utilities to recover costs related to MoPSC-approved customer energy-efficiency programs without a traditional regulatory rate review, subject to MoPSC prudence reviews.
MEEIA 2013 Ameren Missouri’s portfolio of customer energy-efficiency programs, recovery of lost electric margins, and performance incentive for 2013 through 2015, pursuant to Missouri law, as approved by the MoPSC in August 2012.
MEEIA 2016 Ameren Missouri’s portfolio of customer energy-efficiency programs, recovery of lost electric margins, and performance incentive for March 2016 through February 2019, pursuant to Missouri law, as approved by the MoPSC in February 2016.
MEEIA 2019 Ameren Missouri’s portfolio of customer energy-efficiency programs, recovery of lost electric margins, and performance incentive for March 2019 through December 2024, pursuant to Missouri law, as approved by the MoPSC in December 2018.
Megawatthour or MWh – One thousand kilowatthours.
MGP – Manufactured gas plant.
MISO – Midcontinent Independent System Operator, Inc., an RTO.
Missouri Credit Agreement Ameren’s and Ameren Missouri’s $1.2 billion senior unsecured credit agreement, which expires in December 2024, unless extended.
Missouri Environmental Authority – Environmental Improvement and Energy Resources Authority of the state of Missouri, a governmental body authorized to finance environmental projects by issuing tax-exempt bonds and notes.
Mmbtu – One million Btus.
Money pool – Borrowing agreements among Ameren and its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements.
Moody’s – Moody’s Investors Service, Inc., a credit rating agency.
MoPSC – Missouri Public Service Commission, a state agency that regulates Missouri utility businesses, including Ameren Missouri.
MTM – Mark-to-market.
MW – Megawatt.
Native load – End-use retail customers whom we are obligated to serve by statute, franchise, contract, or other regulatory requirement.
Natural gas margins – Natural gas revenues less natural gas purchased for resale.
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NAV – Net asset value per share.
NEIL – Nuclear Electric Insurance Limited, which includes all of its affiliated companies.
NERC – North American Electric Reliability Corporation.
Net energy costs – Net energy costs, as defined in the FAC, which include fuel, 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.
Net metering – Net metering allows customers who generate their own electricity or subscribe to receive output from eligible facilities to feed electricity they do not use back into the grid. The customers receive a credit for the energy they add to the grid.
NOx – Nitrogen oxides.
NPNS – Normal purchases and normal sales.
NRC – Nuclear Regulatory Commission, a United States government agency that regulates commercial nuclear power plants and uses of nuclear materials.
NSPS – New Source Performance Standards, provisions under the Clean Air Act.
NSR – New Source Review provisions of the Clean Air Act, which include Nonattainment New Source Review and Prevention of Significant Deterioration regulations.
NYSE – New York Stock Exchange, LLC.
OCI – Other comprehensive income (loss) as defined by GAAP.
Off-system sales revenues – Revenues from other than native load sales, including wholesale sales.
PGA – Purchased gas adjustment tariffs, a rate-adjustment mechanism that permits prudently incurred natural gas costs to be recovered directly from utility customers without a traditional regulatory rate review, subject to regulatory prudence reviews.
PHMSA – Pipeline and Hazardous Materials Safety Administration.
PISA – Plant-in-service accounting regulatory mechanism, an election under Missouri law that permits electric utilities to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on rate base for certain property, plant, and equipment placed in service after the PISA election date, subject to MoPSC prudence reviews. The rate base on which the return is calculated incorporates qualifying capital expenditures since the PISA election date as well as changes in total accumulated depreciation excluding retirements and plant-related deferred income taxes. The regulatory asset for accumulated PISA deferrals earns a return at the applicable WACC. The PISA was elected by Ameren Missouri, effective September 1, 2018, and is effective through December 2023, unless extended by the MoPSC.
QIP – Qualifying infrastructure plant, a rate-adjustment mechanism that provides Ameren Illinois’ natural gas business with recovery of, and a return on, qualifying infrastructure plant investments that are placed in service between regulatory rate reviews, subject to ICC prudence reviews. Without legislative action, the QIP will expire in December 2023.
Rate base The basis on which a public utility is permitted to earn a WACC. This basis is the net investment in assets used to provide utility service, which generally consists of in-service property, plant, and equipment, net of accumulated depreciation and accumulated deferred income taxes, inventories, and, depending on jurisdiction, construction work in progress.
Regulatory lag – The exposure to differences in costs incurred and actual sales volumes as compared with the associated amounts included in customer rates. Rate increase requests in traditional regulatory rate reviews can take up to 11 months to be acted upon by the MoPSC and the ICC. As a result, revenue increases authorized by regulators will lag changing costs and sales volumes when based on historical periods.
RESRAM – Renewable energy standard rate-adjustment mechanism, a regulatory mechanism allowed under Missouri law that enables Ameren Missouri to recover costs relating to compliance with Missouri’s renewable energy standard, including recovery of investments in wind generation and other renewables, and earn a return at the applicable WACC on those investments not already provided for in customer rates or any other recovery mechanism by adjusting customer rates on an annual basis without a traditional regulatory rate review, subject to MoPSC prudence reviews. RESRAM regulatory assets will earn carrying costs at short-term interest rates.
Revenue requirement – The cost of providing utility service to customers, which is calculated as the sum of a utility’s recoverable operating expenses, a return at the weighted-average cost of capital on rate base, and an amount for income taxes, based on the currently applicable statutory income tax rates and amortization associated with excess deferred income taxes.
RFP – Request for proposal.
Rider – a rate-adjustment mechanism that allows for the recovery or refund of differences between actual costs incurred and base level expenses included in customer rates without a traditional regulatory rate review.
ROE – Return on common equity.
RTO – Regional transmission organization.
S&P – S&P Global Ratings, a credit rating agency.
SEC – Securities and Exchange Commission, a United States government agency.
SERC – SERC Reliability Corporation, one of the regional electric reliability councils organized for coordinating the planning and operation of the nation’s bulk power supply.
Smart Energy Plan – Ameren Missouri’s plan to upgrade Missouri’s electric grid through at least 2024, which assumes continuation of the PISA. Upgrades include investments to improve reliability and accommodate more renewable energy.
SO2 – Sulfur dioxide.
STEM – Science, technology, engineering, and math.
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TCJA – The Tax Cuts and Jobs Act of 2017, federal income tax legislation enacted in December 2017, which significantly changed the tax laws applicable to business entities. The TCJA includes specific provisions related to regulated public utilities. Substantially all of the provisions of the TCJA affecting the Ameren Companies, other than certain transition depreciation rules, were effective for taxable years beginning after December 31, 2017.
Test year – The selected period of time, typically a 12-month period, for which a utility’s historical or forecasted operating results are used to determine the revenue requirement in a regulatory rate review.
Tracker – a regulatory recovery mechanism that allows for the deferral of differences between actual costs incurred and base level expenses included in customer rates as a regulatory asset or liability. The difference is included in base rates and recovered from, or refunded to, customers over a period of time as determined in a subsequent regulatory rate review.
TSR – Total shareholder return, the cumulative return of a common stock or index over a specified period of time assuming all dividends are reinvested.
VBA – Volume balancing adjustment, a rate-adjustment mechanism for Ameren Illinois’ natural gas business that decouples natural gas revenues from actual sales volumes and allows Ameren Illinois to adjust customer rates without a traditional regulatory rate review, subject to ICC prudence reviews. The decoupling provisions ensure that Ameren Illinois’ natural gas revenues are not affected by changes in sales volumes, including those resulting from deviations from normal weather conditions, for residential and small nonresidential customers.
WACC – Weighted-average cost of capital, which is the weighted-average cost of debt and equity, as allowed by the applicable regulator.
Zero emission credit – A credit that represents the environmental attributes of one MWh of energy produced from certain zero emissions nuclear-powered generation facilities, which certain Illinois utilities are required to purchase pursuant to the FEJA.
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, objectives, events, conditions, and financial performance. In connection with the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we are providing this cautionary statement to identify important factors that could cause actual results to differ materially from those anticipated. The following factors, in addition to those discussed within Risk Factors under Part I, Item 1A, of this report, and elsewhere in this report and in our other filings with the SEC, could cause actual results to differ materially from management expectations suggested in such forward-looking statements:
regulatory, judicial, or legislative actions, and any changes in regulatory policies and ratemaking determinations, that may change regulatory recovery mechanisms, such as those that may result from potential future orders and 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 July 2020 appeal filed by Ameren Missouri, Ameren Illinois, and ATXI challenging the FERC’s rehearing denials in the transmission formula rate revision cases, Ameren Illinois’ electric distribution service rate reconciliation request filed with the ICC in April 2020, Ameren Illinois’ QIP reconciliation hearing with the ICC requested in March 2019, and requests filed with the MoPSC in October 2020 for accounting authority orders 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;
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 planned 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 framework for its electric distribution service, which, unless extended, expires at the end of 2022, 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, and challenges to the tax positions taken by the Ameren Companies, if any, as well as resulting effects on customer rates;
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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 control costs and make substantial investments in our businesses, including our ability to recover costs, investments, and our allowed ROEs within frameworks established by our regulators, while maintaining affordability of our services for our 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;
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’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, 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 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 the ability to recover costs associated with such outages and the impact of such outages on off-system sales and purchased power, among other things;
Ameren Missouri’s ability to recover the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs;
the impact of current environmental laws and new, more stringent, or changing requirements, including those related to NSR and CO2, 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, 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, including a certificate of convenience and necessity from the MoPSC or any other required approvals for the addition of renewable resources;
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; and our ability to obtain timely interconnection agreements with the MISO or other RTOs at an acceptable cost for each facility;
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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
ITEM 1. BUSINESS
GENERAL
Ameren, formed in 1997 and headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries.
Below is a summary description of Ameren’s principal subsidiaries – Ameren Missouri, Ameren Illinois, and ATXI. Ameren also has other subsidiaries that conduct other activities, such as providing shared services. A more detailed description can be found in Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
Ameren Illinois operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois.
ATXI operates a FERC rate-regulated electric transmission business in the MISO.
For additional information about the development of our businesses, our business operations, and factors affecting our results of operations, financial position, and liquidity, see Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report and Note 1 – Summary of Significant Accounting Policies and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
BUSINESS SEGMENTS
Ameren has four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. The Ameren Missouri segment includes all of the operations of Ameren Missouri. Ameren Illinois Electric Distribution consists of the electric distribution business of Ameren Illinois. Ameren Illinois Natural Gas consists of the natural gas business of Ameren Illinois. Ameren Transmission primarily consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI.
Ameren Missouri has one segment. Ameren Illinois has three segments: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission.
An illustration of the Ameren Companies’ reporting structures is provided below:
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(a)    The Ameren Transmission segment also includes allocated Ameren (parent) interest charges, as well as other subsidiaries engaged in electric transmission project development and investment.
RATES AND REGULATION
Rates
The rates that Ameren Missouri, Ameren Illinois, and ATXI are allowed to charge for their utility services significantly influence the results of operations, financial position, and liquidity of these companies and Ameren. The electric and natural gas utility industry is highly regulated. The utility rates charged to customers are determined by governmental entities, including the MoPSC, the ICC, and the FERC. Decisions by these entities are influenced by many factors, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, and economic conditions, as well as social and political views. Decisions made by these governmental entities regarding customer rates are largely outside of our control. These decisions, as well as the regulatory lag involved in the process of obtaining approval for new customer rates, could have a material adverse effect on the results of operations, financial position, and liquidity of the Ameren Companies. The extent of the regulatory lag varies for each of Ameren’s electric and natural gas jurisdictions, with the Ameren Transmission and Ameren Illinois Electric Distribution businesses experiencing the least amount of regulatory lag. Depending on the jurisdiction, the effects of regulatory lag are mitigated by various means, including annual revenue requirement reconciliations, the decoupling of revenues from sales volumes to ensure revenues approved in a regulatory rate review are not affected by changes in sales volumes, the recovery of certain capital investments between traditional regulatory rate reviews, the level and timing of expenditures, the use of a future test year, and the use of trackers and riders.
The MoPSC regulates rates and other matters for Ameren Missouri. The ICC regulates rates and other matters for Ameren Illinois. The MoPSC and the ICC regulate non-rate utility matters for ATXI. ATXI does not have retail distribution customers; therefore, the MoPSC and the ICC do not have authority to regulate ATXI’s rates. The FERC regulates Ameren Missouri’s, Ameren Illinois’, and ATXI’s cost-based rates for the wholesale transmission and distribution of energy in interstate commerce and various other matters discussed below under General Regulatory Matters.
For additional information on Ameren Missouri, Ameren Illinois, and ATXI rate matters, see Results of Operations and Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, Quantitative and Qualitative Disclosures About Market Risk under Part II, Item 7A, and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
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The following table summarizes the key terms of the rate orders in effect for customer billings for each of Ameren’s rate-regulated utilities as of January 2021:
Rate RegulatorEffective
Rate Order
Issued In
Allowed
ROE
Percent of
Common Equity
Rate Base
(in billions)
Portion of Ameren’s 2020 Operating Revenues(a)
Ameren Missouri
Electric service(b)
MoPSC
March 2020(c)
9.4% 9.8%(c)
(c)(c)51%
Natural gas delivery serviceMoPSC
August 2019(d)
9.4% 9.95%(d)
52.0%(d)2%
Ameren Illinois
Electric distribution delivery service(e)
ICCDecember 20208.38%50.0%$3.426%
Natural gas delivery service(f)
ICCJanuary 20219.67%52.0%$2.113%
Electric transmission service(g)
FERC(g)10.52%54.0%$2.65%
ATXI
Electric transmission service(g)
FERC(g)10.52%60.1%$1.43%
(a)Includes pass-through costs recovered from customers, such as purchased power for electric distribution delivery service and natural gas purchased for resale for natural gas delivery service, and intercompany eliminations.
(b)Ameren Missouri’s electric generation, transmission, and delivery service rates are bundled together and charged to retail customers under a combined electric service rate.
(c)This rate order specified that an implicit ROE was within a range of 9.4% to 9.8%. This rate order did not specify a percent of common equity or rate base. The ROE used for allowance for equity funds used during construction is 9.53%.
(d)This rate order specified that an implicit ROE was within a range of 9.4% to 9.95%. This rate order did not specify rate base. The ROE used for allowance for equity funds used during construction is 9.53%.
(e)Ameren Illinois electric distribution delivery service rates are updated annually and become effective each January. This rate order was based on 2019 actual costs, expected net plant additions for 2020, and the annual average of the monthly yields during 2019 of the 30-year United States Treasury bonds plus 580 basis points. Ameren Illinois’ allowed ROE for 2020 and 2019 was based on an annual average of the monthly yields of the 30-year United States Treasury bonds of 1.56% and 2.58%, respectively. Ameren Illinois’ 2021 electric distribution delivery service revenues will be based on its 2021 actual recoverable costs, rate base, common equity percentage, and an allowed ROE, as calculated under the IEIMA’s performance-based formula ratemaking framework.
(f)This rate order was based on a 2021 future test year.
(g)Transmission rates are updated annually and become effective each January. They are determined by a company-specific, forward-looking formula ratemaking framework based on each year’s forecasted information. The 10.52% return, which includes a 50 basis points incentive adder for participation in an RTO, is based on the FERC’s May 2020 order. For additional information regarding this order and related requests for rehearing, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
General Regulatory Matters
Ameren Missouri, Ameren Illinois, and ATXI must receive FERC approval to enter into various transactions, such as issuing short-term debt securities and conducting certain acquisitions, mergers, and consolidations involving electric utility holding companies. In addition, Ameren Missouri, Ameren Illinois, and ATXI must receive authorization from the applicable state public utility regulatory agency to issue stock and long-term debt securities and to conduct mergers, affiliate transactions, and various other activities.
Ameren Missouri, Ameren Illinois, and ATXI are also subject to mandatory reliability standards, including cybersecurity standards adopted by the FERC, to ensure the reliability of the bulk electric power system. These standards are developed and enforced by the NERC, pursuant to authority delegated to it by the FERC. Ameren Missouri, Ameren Illinois, and ATXI are members of the SERC. The SERC is one of eight regional entities representing all or portions of 16 central and southeastern states under authority from the NERC for the purpose of implementing and enforcing reliability standards approved by the FERC. The regional entities of the NERC work to safeguard the reliability of the bulk power systems throughout North America. If any of Ameren Missouri, Ameren Illinois, or ATXI is found not to be in compliance with these mandatory reliability standards, it could incur substantial monetary penalties and other sanctions.
Under the Public Utility Holding Company Act of 2005, the FERC and the state public utility regulatory agencies in each state Ameren and its subsidiaries operate in may access books and records of Ameren and its subsidiaries that are found to be relevant to costs incurred by Ameren’s rate-regulated subsidiaries that may affect jurisdictional rates. The act also permits the MoPSC and the ICC to request that the FERC review cost allocations by Ameren Services to other Ameren companies.
Operation of Ameren Missouri’s Callaway Energy Center is subject to regulation by the NRC. The license for the Callaway Energy Center expires in 2044. Ameren Missouri’s hydroelectric Osage Energy Center and pumped-storage hydroelectric Taum Sauk Energy Center, as licensed projects under the Federal Power Act, are subject to FERC regulations affecting, among other aspects, the general operation and maintenance of the projects. The licenses for the Osage Energy Center and the Taum Sauk Energy Center expire in 2047 and 2044, respectively. Ameren Missouri’s Keokuk Energy Center and its dam in the Mississippi River between Hamilton, Illinois, and Keokuk, Iowa, are operated under authority granted by an Act of Congress in 1905.
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For additional information on regulatory matters, see Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
Environmental Matters
Our generation, transmission, and electric and natural gas distribution operations must comply with a variety of environmental laws contained in statutes and regulations relating to the protection of the environment and the health and safety of the public. These laws are comprehensive and include the storage, handling, and disposal of waste materials, emergency planning and response requirements, limitations and standards applicable to discharges from our facilities into the air or water that are enforced through permitting requirements, and wildlife protection laws, including those related to endangered species. These environmental regulations could also affect the availability of, the cost of, and the demand for electricity and natural gas sold to Ameren Missouri’s and Ameren Illinois’ customers as well as the demand for off-system sales. Federal, state, and local authorities continually revise these regulations, which adds uncertainty to our planning process and to the ultimate implementation of these or other new or revised regulations. Failure to comply with these laws could have a material adverse effect on us. We could be subject to criminal or civil penalties by regulatory agencies, or we could be ordered by the courts to pay private parties. Except as indicated in this report, we believe that we are in material compliance with existing laws that currently apply to our operations.
For discussion of environmental matters, including NOx and SO2 emission reduction requirements, regulation of CO2 emissions, wastewater discharge standards, remediation efforts, CCR management regulations, and a discussion of litigation against Ameren Missouri with respect to NSR, the Clean Air Act, and Missouri law in connection with projects at Ameren Missouri’s Rush Island Energy Center, see Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
TRANSMISSION
Ameren owns an integrated transmission system that is composed of the transmission assets of Ameren Missouri, Ameren Illinois, and ATXI. Ameren also operates two MISO balancing authority areas: AMMO and AMIL. The AMMO balancing authority area includes the load and energy centers of Ameren Missouri, and had a peak demand of 7,108 MWs in 2020. The AMIL balancing authority area includes the load of Ameren Illinois, and had a peak demand of 8,351 MWs in 2020. The Ameren transmission system directly connects with 15 other balancing authority areas for the exchange of electric energy.
Ameren Missouri, Ameren Illinois, and ATXI are transmission-owning members of the MISO. Ameren Missouri is authorized by the MoPSC to participate in the MISO through May 2024. Ameren Missouri is periodically required to make a filing with the MoPSC regarding its continued participation in the MISO. The next filing is due in 2023.
SUPPLY OF ELECTRIC POWER
Ameren Missouri
Ameren Missouri’s electric supply is primarily generated from its energy centers. Factors that could cause Ameren Missouri to purchase power include, among other things, energy center outages, the fulfillment of renewable energy requirements, extreme weather conditions, the availability of power at a cost lower than its generation cost, and the lack of sufficient owned generation.
Ameren Missouri files a long-term nonbinding integrated resource plan with the MoPSC every three years. The most recent integrated resource plan, filed in September 2020, includes Ameren Missouri’s preferred approach for meeting customers’ projected long-term energy needs in a cost-effective manner while maintaining system reliability and customer affordability. The plan, which is subject to review by the MoPSC for 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. It also includes expanding renewable sources by adding 3,100 MWs of renewable generation by the end of 2030 and a total of 5,400 MWs of renewable generation by 2040, inclusive of the High Prairie and Atchison renewable energy centers, the expectation that Ameren Missouri will seek NRC approval for an extension of the operating license for the Callaway Energy Center, expanding customer energy-efficiency programs, adding cost-effective demand response programs, advancing the retirement dates of the Sioux and Rush Island coal-fired energy centers to 2028 and 2039, respectively, and retiring the remaining coal-fired energy centers as they reach the end of their useful lives, including the Meramec Energy Center by the end of 2022. The addition of a renewable generation facility is subject to obtaining necessary project approvals, including FERC approval and the issuance of a certificate of convenience and necessity by the MoPSC, as applicable. Advancing the retirement dates of the Sioux and Rush Island energy centers is subject to the approval of a change in the assets’ depreciable lives by the MoPSC in a future regulatory rate review. Ameren Missouri would be adversely affected if the MoPSC does not allow recovery of the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs. Ameren Missouri expects to file its next integrated resource plan in September 2023.
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Ameren Missouri continues to evaluate its longer-term needs for new generating capacity. The need for investment in new sources of energy is dependent on several key factors, including continuation of and customer participation in energy-efficiency programs, the amount of distributed generation from customers, load growth, technological advancements, costs of generation alternatives, environmental regulation of coal-fired power plants, and state renewable energy requirements, which could lead to the retirement of current baseload assets before the end of their current useful lives or alterations in the way those assets operate, which could result in increased capital expenditures and/or increased operations and maintenance expenses. Because of the significant time required to plan, acquire permits for, and build a baseload energy center, Ameren Missouri continues to study alternatives and to take steps to preserve options to meet future demand. Steps include evaluating the potential for further diversification of Ameren Missouri’s generation portfolio through renewable energy generation, including wind and solar generation, extending the operating license for the Callaway Energy Center, additional customer energy-efficiency and demand response programs, distributed energy resources, and energy storage.
Missouri law requires Ameren Missouri to offer rebates and net metering to certain customers that install solar generation at their premises. The cost of the rebates are deferred as a regulatory asset under the RESRAM, and earn carrying costs at short-term interest rates. Customers that elect to enroll in net metering are allowed to net their generation against their usage within each billing month.
Ameren Illinois
In Illinois, while electric transmission and distribution service rates are regulated, power supply prices are not. Although electric customers are allowed to purchase power from an alternative retail electric supplier, Ameren Illinois is required to be the provider of last resort for its electric distribution customers. In 2020, 2019, and 2018, Ameren Illinois procured power on behalf of its customers for 23%, 22%, and 23%, respectively, of its total kilowatthour sales. Power purchased by Ameren Illinois for its electric distribution customers who do not elect to purchase their power from an alternative retail electric supplier comes either through procurement processes conducted by the IPA or through markets operated by the MISO. The IPA administers an RFP process through which Ameren Illinois procures its expected supply. The power and related procurement costs incurred by Ameren Illinois are passed directly to its electric distribution customers through a cost recovery mechanism. The costs are reflected in Ameren Illinois Electric Distribution’s results of operations, but do not affect Ameren Illinois Electric Distribution’s earnings because these costs are offset by corresponding revenues. Ameren Illinois charges transmission and distribution service rates to electric distribution customers who purchase electricity from alternative retail electric suppliers, which does affect Ameren Illinois Electric Distribution’s earnings.
Illinois law requires Ameren Illinois to offer rebates for certain net metering customers. The cost of the rebates are deferred as a regulatory asset, which earn a return at the applicable WACC. Customers that receive these rebates are allowed to net their supply service charges, but not their distribution service charges. Ameren Illinois’ electric distribution revenues are decoupled from sales volumes, which ensures that the electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes.
POWER GENERATION
Ameren Missouri owns energy centers that rely on a diverse fuel portfolio, including coal, nuclear, and natural gas, as well as renewable sources of generation, which include hydroelectric, wind, methane gas, and solar. All of Ameren Missouri’s coal-fired energy centers were constructed prior to 1978. The Callaway nuclear energy center began operation in 1984 and is licensed to operate until 2044. As of December 31, 2020, Ameren Missouri’s coal-fired energy centers represented 11% and 23% of Ameren’s and Ameren Missouri’s rate base, respectively. See Item 2 – Properties under Part I of this report for information regarding Ameren Missouri’s energy centers.
Coal
Ameren Missouri has an ongoing need for coal as fuel for generation, and pursues a price-hedging strategy consistent with this requirement. Ameren Missouri has agreements in place to purchase and transport coal to its energy centers. As of December 31, 2020, Ameren Missouri had price-hedged 100% of its expected coal supply and 100% of its coal transportation requirements for generation in 2021. Ameren Missouri has additional coal supply under contract through 2025. The Powder River Basin coal transport agreements that Ameren Missouri has with Union Pacific Railroad and Burlington Northern Santa Fe Railway are currently set to expire at the end of 2024. Ameren Missouri burned approximately 15.4 million tons of coal in 2020.
About 97% of Ameren Missouri’s coal is purchased from the Powder River Basin in Wyoming, which has a limited number of suppliers. The remaining coal is typically purchased from the Illinois Basin. Targeted coal inventory levels may be adjusted because of generation levels or uncertainties of supply due to potential work stoppages, delays in coal deliveries, equipment breakdowns, and other factors. Deliveries from the Powder River Basin have occasionally been restricted because of rail congestion and maintenance, derailments, weather, and supplier financial hardship. Coal suppliers in the Power River Basin are experiencing financial hardship because of a decrease in demand resulting from increased natural gas and renewable energy generation, and the impact of environmental regulations, as well as concerns related to coal-fired generation. These financial hardships have resulted in bankruptcy filings by certain coal suppliers in recent years. As of December 31, 2020, coal inventories for Ameren Missouri were near targeted levels. Disruptions in coal deliveries could cause Ameren
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Missouri to pursue a strategy that could include reducing off-system sales of power during low-margin periods, buying higher-cost fuels to generate required electricity, and purchasing power from other sources.
Nuclear
The production of nuclear fuel involves the mining and milling of uranium ore to produce uranium concentrates, the conversion of uranium concentrates to uranium hexafluoride gas, the enrichment of that gas, the conversion of the enriched uranium hexafluoride gas into uranium dioxide fuel pellets, and the fabrication into fuel assemblies. Ameren Missouri has entered into uranium, uranium conversion, uranium enrichment, and fabrication contracts to procure the fuel supply for its Callaway Energy Center.
The Callaway Energy Center has historically required refueling at 18-month intervals. 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 has begun to replace certain key components of the generator in order to return the energy center to service. As of the date of this filing, due to the long lead time for the manufacture, repair, and installation of these components, the energy center is expected to return to service in late June or early July 2021. Ameren Missouri has inventories, supply contracts, and fuel fabrication service contracts sufficient to meet all of its uranium (concentrate and hexafluoride), conversion, and enrichment requirements at least through the 2025 refueling.
RENEWABLE ENERGY AND ZERO EMISSION STANDARDS
Missouri and Illinois laws require electric utilities to include renewable energy resources in their portfolios. Ameren Missouri and Ameren Illinois satisfied their renewable energy portfolio requirements in 2020.
Ameren Missouri
In Missouri, utilities were required to purchase or generate electricity equal to at least 10% of native load sales from renewable energy sources in 2020. The requirement increased to at least 15% in 2021, subject to an average 1% annual increase on customer rates over any 10-year period. At least 2% of the annual renewable energy requirement must be derived from solar energy. Ameren Missouri expects to satisfy the nonsolar requirement in 2021 with its High Prairie Renewable, Atchison Renewable, Keokuk, and Maryland Heights energy centers, a 102-MW power purchase agreement with a wind farm operator, and immaterial renewable energy credit purchases in the market. In December 2020, Ameren Missouri acquired and placed in service the High Prairie Renewable Energy Center, a 400-MW wind generation facility. In January 2021, Ameren Missouri acquired an up-to 300-MW wind generation project and, as of the date of this filing, placed 120 MWs in service as the Atchison Renewable Energy Center. Ameren Missouri expects approximately 150 MWs to be in service by the end of the first quarter of 2021, and the remaining portion to be in service later in 2021. For additional information see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report. The Keokuk Energy Center generates electricity using a hydroelectric dam located on the Mississippi River. The Maryland Heights Energy Center generates electricity by burning methane gas collected from a landfill. Ameren Missouri is meeting the solar energy requirement by purchasing solar-generated renewable energy credits from customer-installed systems and by generating solar energy at its O’Fallon, Lambert, and BJC energy centers and its headquarters building.
Ameren Illinois
In accordance with Illinois law, Ameren Illinois is required to collect funds from all electric distribution customers to fund IPA procurement events for renewable energy credits. The amount collected from customers by Ameren Illinois is capped at $1.81 per MWh. The IPA establishes its long-term renewable resources procurement plans in a filing made every two years. The IPA’s initial long-term renewable resources procurement plan was approved by the ICC in 2018. The IPA’s plan set forth guidelines by which the IPA should procure 15-year contracts for wind renewable energy credits and solar renewable energy credits. As a result, Ameren Illinois is required to purchase 1.2 million wind renewable energy credits per year and 1.2 million solar renewable energy credits per year, through IPA procurement events, which represented approximately 7% of Ameren Illinois’ electric distribution sales in 2020. The IPA has completed several procurement events, resulting in contractual commitments for Ameren Illinois of 0.9 million wind renewable energy credits per year and 1.2 million solar renewable energy credits per year. Ameren Illinois has also entered into renewable energy credit contracts with 20-year terms ending 2032 and will execute additional contracts in 2021, through IPA procurement events, in order to fulfill its remaining obligations. In February 2020, the ICC approved the IPA’s second long-term renewable resources procurement plan. Under the second plan, based on forecasted customer collections to fund renewable energy credit contracts, the IPA does not anticipate procuring additional contracts. However, if customer funds collected exceed the cost of procured contracts, the IPA may procure additional contracts. Funds collected but not used to procure renewable energy credits will be refunded to customers pursuant to a reconciliation proceeding that would be initiated after August 2021.
Illinois law also required Ameren Illinois to enter into contracts for zero emission credits in an amount equal to approximately 16% of the actual amount of electricity delivered to retail customers during calendar year 2014, pursuant to Illinois’ zero emission standard. As a result of a 2018 IPA procurement event, which was approved by the ICC, Ameren Illinois entered into agreements to acquire zero emission credits through 2026. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent
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planning year. Both renewable energy credits and zero emission credits have cost recovery mechanisms, which allow Ameren Illinois to collect from, or refund to, customers differences between actual costs incurred from the resulting contracts and the amounts collected from customers.
CUSTOMER ENERGY-EFFICIENCY PROGRAMS
Ameren Missouri and Ameren Illinois have implemented energy-efficiency programs to educate and to help their customers become more efficient energy consumers.
Ameren Missouri
In Missouri, the Missouri Energy Efficiency Investment Act established a rider that, among other things, allows electric utilities to recover costs with respect to MoPSC-approved customer energy-efficiency programs. The law requires the MoPSC to ensure that a utility’s financial incentives are aligned to help customers use energy more efficiently, to provide timely cost recovery, and to provide earnings opportunities associated with cost-effective energy-efficiency programs. Missouri does not have a law mandating energy-efficiency programs.
In 2018, the MoPSC issued an order approving Ameren Missouri’s MEEIA 2019 plan. The plan includes a portfolio of customer energy-efficiency programs through December 2022 and low-income customer energy-efficiency programs through December 2024, along with a rider. Ameren Missouri intends to invest $290 million over the life of the plan, including $65 million in 2021 and $70 million in 2022. 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 August 2020, the MoPSC issued an order approving a unanimous stipulation and agreement establishing performance incentives for the 2022 program year. If the target goals are achieved for 2020, 2021, and 2022, additional revenues of $10 million, $13 million, and $11 million would be recognized in 2021, 2022, and 2022, respectively. 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 goals. Ameren Missouri’s ability to achieve and/or exceed targeted goals could be affected by the COVID-19 pandemic. Through 2020, Ameren Missouri has invested $121 million in MEEIA 2019 customer energy-efficiency programs. Additionally, as part of its Smart Energy Plan, Ameren Missouri has invested $115 million in smart meters since 2019 that enable customers to improve their energy efficiency.
The MEEIA 2019 plan includes the continued use of the MEEIA rider. The MEEIA rider allows Ameren Missouri to collect from, or refund to, customers any difference between actual program costs, lost electric margins, and any performance incentive and the amounts collected from customers, without a traditional regulatory rate review, until lower volumes resulting from the MEEIA programs are reflected in base rates. Customer rates, based upon both forecasted program costs and lost electric margins and collected via the MEEIA rider, are reconciled annually to actual results.
Ameren Illinois
State law requires Ameren Illinois to offer customer energy-efficiency programs, and imposes electric energy-efficiency savings goals and a maximum amount of investment in electric energy-efficiency programs through 2030, which is approximately $100 million annually. In September 2017, the ICC issued an order approving Ameren Illinois’ electric and natural gas energy-efficiency plans, as well as regulatory recovery mechanisms. The order authorized electric and natural gas energy-efficiency program expenditures of $394 million and $62 million, respectively, for the 2018 through 2021 period. Additionally, as part of its IEIMA capital investments, Ameren Illinois has invested $300 million in smart meters since 2012 that enable customers to improve their energy efficiency.
Illinois law allows Ameren Illinois to earn a return on its electric energy-efficiency program investments made since June 2017. 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. Ameren Illinois plans to invest up to approximately $100 million per year in electric energy-efficiency programs through 2025, and will earn a return on those investments. 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. Ameren Illinois’ natural gas energy-efficiency program costs are recovered as they are incurred through a regulatory recovery mechanism.
NATURAL GAS SUPPLY FOR DISTRIBUTION
Ameren Missouri and Ameren Illinois are responsible for the purchase and delivery of natural gas to their customers. Ameren Missouri and Ameren Illinois each develop and manage a portfolio of natural gas supply resources. These resources include firm natural gas supply
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agreements with producers, firm interstate and intrastate transportation capacity, firm no-notice storage capacity leased from interstate pipelines, and on-system storage facilities to maintain natural gas deliveries to customers throughout the year and especially during peak demand periods. Ameren Missouri and Ameren Illinois primarily use Panhandle Eastern Pipe Line Company, Trunkline Gas Company, Natural Gas Pipeline Company of America, Mississippi River Transmission Corporation, Northern Border Pipeline Company, and Texas Eastern Transmission Corporation interstate pipeline systems to transport natural gas to their systems. In addition to transactions requiring physical delivery, certain financial instruments, including those entered into in the New York Mercantile Exchange futures market and in the over-the-counter financial markets, are used to hedge the price paid for natural gas. Natural gas supply costs are passed on to customers of Ameren Missouri and Ameren Illinois under PGA clauses, subject to prudence reviews by the MoPSC and the ICC. As of December 31, 2020, Ameren Missouri and Ameren Illinois had price-hedged 68% and 73%, respectively, of their expected 2021 natural gas supply requirements.
For additional information on our fuel, purchased power, and natural gas for distribution supply, see Results of Operations and Liquidity and Capital Resources in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report and Commodity Price Risk under Part II, Item 7A, of this report. Also see Note 1 – Summary of Significant Accounting Policies, Note 7 – Derivative Financial Instruments, Note 13 – Related-party Transactions, Note 14 – Commitments and Contingencies, and Note 15 – Supplemental Information under Part II, Item 8 of this report.
HUMAN CAPITAL MANAGEMENT
The execution of Ameren’s core strategy to invest in regulated infrastructure, continuously improve performance, and advocate for responsible policies to deliver superior customer and shareholder value is driven by the capabilities and engagement of our workforce. Ameren’s workforce strategy is designed to promote a diverse workforce that is prepared to deliver on Ameren’s mission (To Power the Quality of Life) and vision (Leading the Way to a Sustainable Energy Future), both today and in the future. Our workforce strategy is anchored in four key pillars: Culture, Leadership, Talent, and Rewards, which are discussed further below. Foundational to our workforce strategy are our core values of:
Safety and security
Commitment to excellence
Respect
Accountability
Diversity, equity, and inclusion
Integrity
Teamwork
Stewardship
Ameren’s chief executive officer and chief human resources officer, with the support of other leaders of the Ameren Companies, are responsible for developing and executing our workforce strategy. In addition to reviewing and determining the Ameren Companies’ compensation practices and policies for the chief executive officer and other executive officers, the Human Resources Committee of Ameren’s board of directors is responsible for oversight of Ameren’s human capital management practices and policies, including those related to diversity, equity, and inclusion. The Human Resources Committee and Ameren’s board of directors are updated regularly on human capital matters.
Culture
We strive to cultivate a values-based “All-In” culture that enables the sustainable execution of our core strategy and reflects the following characteristics:
We Care about our customers, our communities, and each other
We Serve with Passion
We Deliver for our customers and stakeholders
We Win Together as a result of our teamwork and collaboration
We design our human capital management practices and policies to reinforce our core values, share our culture, and drive employee engagement. In doing so, we strive to align our employees to our mission and vision, improve safety, enhance innovation, increase productivity, attract and retain top talent, and recognize employee contributions, among other things. We assess employee engagement through a variety of channels. As a part of our assessment, we conduct confidential employee engagement surveys at least annually to identify areas of strength and opportunities for improvement in our employees’ experience, and take actions aimed at increasing employee engagement.
As a part of our All-In culture, every employee is expected to challenge any unsafe act, complete each workday safely, and provide feedback on safety and security matters. In addition to comprehensive safety and security standards, and mandatory health, safety, and security training programs for applicable employees, we promote programs designed to encourage employees to provide feedback on practices or actions that could harm employees, customers, or the Ameren Companies, including perceived issues related to safety, security (both physical and cyber), ethics and compliance violations, or acts of discrimination. For additional information about the actions taken designed to protect the safety of our employees and customers during the COVID-19 pandemic, see The COVID-19 Pandemic section below.
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We seek to foster diversity, equity, and inclusion, which was elevated to a core value in 2020, across our organization. Ameren has established programs to recruit early and mid-career talent to further enhance the diversity of our workforce pipelines. These programs include an intern/coop program that serves as a pipeline for STEM-related careers, a career reentry program for experienced professionals transitioning from voluntary career breaks, and a program for individuals transitioning from military service. Additionally, each year management and the Human Resources Committee of Ameren’s board of directors review the diversity of our workforce, leadership team, and leadership development pipeline, as well as the actions taken to further enhance the diversity of our leadership team. In addition, the Ameren Companies contribute to community-based organizations, hold diversity, equity, and inclusion leadership summits for employees and community leaders, and offer various training programs. Beginning in 2021, we implemented a program to provide paid-time off for employees who engage in volunteer or learning opportunities with organizations that support diversity, equity, and inclusion. We also have employee resource groups, which bring together groups of employees who share common interests or backgrounds. Within these groups, employees collaborate to address concerns and provide training and development opportunities related to challenges or barriers, and offer support for each other, among other things.
Leadership
Ameren’s leaders play a critical role in setting and executing Ameren’s strategic initiatives, modeling our values and culture, and engaging and enabling the workforce. As such, we seek to develop a strong, diverse leadership team. Management engages in an extensive succession planning process annually, which includes the involvement by Ameren’s board of directors. We develop our leaders both individually, through job rotations, work experiences, and leadership development programs, and as a team. Throughout the year, we offer a variety of forums intended to connect our leaders to our mission, values, strategy and culture, build leadership skills and capabilities, and to promote connection and inclusion. In addition, we evaluate our organizational structure and make adjustments and expand roles to facilitate execution of our strategy and organizational efficiency.
Talent
In order to attract and retain a skilled and diverse workforce, we promote an inclusive work environment, provide opportunities for employees to expand their knowledge and skill sets, and support career development. Our talent management initiatives include a wide range of recruiting partnerships and programs, including those programs discussed above. Our onboarding efforts are designed to ensure early engagement, including the opportunity to participate in mentoring programs. Additionally, employees are encouraged to participate in technical, professional, and leadership development opportunities, and outreach initiatives to engage with the communities that we serve, among other things. As our business needs change, we remain focused on ensuring that our workforce has the tools and skills necessary to deliver on our strategic initiatives.
Workforce
The majority of our workforce is comprised of skilled-craft and STEM-related professional and technical employees. Our workforce has been stable, with a total attrition rate of 7% in 2020. The majority of employee attrition is attributable to employee retirements, generally allowing for thoughtful workforce and succession planning in advance of these planned transitions. The following table presents our employee count and their average tenure as of December 31, 2020, and the attrition rate in 2020:
Employee
Count
Average Tenure
(in years)
Attrition
Rate
Ameren9,183147%
Ameren Missouri3,997157%
Ameren Illinois3,304147%
Ameren Services1,882116%
Ameren’s workforce is diverse in many ways. At the officer level, which represents 53 individuals, 23% are female and 21% are racially and/or ethnically diverse. The following table presents our total employee population that is represented by a collective bargaining unit, is a female, or is racially and/or ethnically diverse at December 31, 2020:
Collective Bargaining UnitFemaleRacially and/or Ethnically Diverse
Ameren48%25%15%
Ameren Missouri59%17%14%
Ameren Illinois55%24%13%
Ameren Services13%40%22%
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The following table presents Ameren’s employees by generation at December 31, 2020:
Generation DescriptionAmerenAmeren MissouriAmeren IllinoisAmeren Services
Baby Boomer (birth years between 1946 and 1964)24%24%23%24%
Generation X (birth years between 1965 and 1980)40%41%39%41%
Millennials (birth years between 1981 and 1996)34%33%37%33%
Generation Z/Post Millennial (birth years after 1997)2%2%1%2%
Collective bargaining units at Ameren’s subsidiaries consist of the International Brotherhood of Electrical Workers, the International Union of Operating Engineers, the Laborer’s International Union of North America, the United Association of Plumbers and Pipefitters, and the United Government Security Officers of America. The Ameren Companies expect continued constructive relationships with their respective labor unions. The Ameren Missouri collective bargaining unit contracts expire in 2021 and 2022, which cover 3% and 97% of represented employees, respectively. The Ameren Illinois collective bargaining unit contracts expire in 2022 and 2023, which cover 93% and 7% of represented employees, respectively.
Rewards
The primary objective of our rewards program is to provide a total rewards package that attracts and retains a talented workforce and reinforces strong performance in a financially sustainable manner. Management continuously evaluates our core benefits in an effort to create a market-competitive, performance-based, shareholder-aligned total rewards package with a view towards balancing employee value and financial sustainability. We recognize that the rewards package required to attract and retain talent over the long term is about more than pay and benefits; it is about the total employee experience and supporting their overall well-being. In addition to base salary, medical benefits, and retirement benefits, including 401(k) savings and pension, our total rewards package includes short-term incentives and long-term stock-based compensation for certain employees. Further, we offer our employees various programs that encourage overall well-being, including wellness and employee assistance programs. We strive to provide a competitive and sustainable rewards package that supports our ability to attract, engage, and retain a talented and diverse workforce, while at the same time reinforcing and rewarding strong performance.
THE COVID-19 PANDEMIC
The COVID-19 pandemic continues to be a constantly evolving situation. In 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. 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 order to work more effectively in certain areas, a portion of our workforce returned to our work locations in early June 2020 under a phased approach, and, as of the date of this filing, 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 fewer restrictions on social activities and nonessential businesses beginning to reopen. However, certain restrictions remain in place that limit individual activities and the operation of nonessential businesses. Additional restrictions may be imposed in the future.
During the COVID-19 pandemic, Ameren has taken significant actions designed to protect the safety of our employees and customers, including restricting travel for employees, implementing work-from-home policies, offering voluntary leave of absence arrangements and flexible reduced work schedules, enhancing paid time off programs for impacted employees, securing and supplying personal protective equipment, and implementing work practices to protect the safety of our employees and customers. In addition to our existing employee assistance program, we provided additional resources on physical, emotional, and financial well-being throughout the pandemic.
For further discussion of the impact to our businesses related to the pandemic and regulatory mechanisms that reduce these impacts, as well as Ameren Missouri’s requests for accounting authority orders related to COVID-19 pandemic costs, see Overview, Results of Operations, and Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, and Note 1 – Summary of Significant Accounting Policies and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
INDUSTRY ISSUES
We are facing issues common to the electric and natural gas utility industry. These issues include:
the potential for changes in laws, regulations, enforcement efforts, and policies at the state and federal levels;
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corporate tax law changes, as well as additional interpretations, regulations, amendments, or technical corrections that affect the amount and timing of income tax payments, reduce or limit the ability to claim certain deductions and use carryforward tax benefits and/or credits, or result in rate base reductions;
cybersecurity risks, cyber attacks, including ransomware and other ransom-based attacks, hacking, social engineering, and other forms of malicious cybersecurity and/or privacy events, which could result in the loss of operational control of energy centers and electric and natural gas transmission and distribution systems and/or the theft or inappropriate release of certain types of information, including sensitive customer, employee, financial, and operating system information;
political, regulatory, and customer resistance to higher rates;
the potential for more intense competition in generation, supply, and distribution, including new technologies and their declining costs;
the impact and effectiveness of vegetation management programs;
the modernization of the electric grid to accommodate a two-way flow of electricity and increase capacity for distributed generation interconnection;
net metering rules and other changes in existing regulatory frameworks and recovery mechanisms to address the allocation of costs to customers who own generation resources that enable them both to sell power to us and to purchase power from us through the use of our transmission and distribution assets;
legislation or programs to encourage or mandate energy efficiency, energy conservation, and renewable sources of power, and the lack of consensus as to how those programs should be paid for;
pressure and uncertainty on customer growth and sales volumes in light of the COVID-19 pandemic and other economic conditions, distributed generation, energy storage, technological advances, and energy-efficiency or conservation initiatives;
the potential for orders to suspend disconnections and/or late fees for customer nonpayment resulting from the COVID-19 pandemic and the related potential impact on liquidity;
changes in the structure of the industry as a result of changes in federal and state laws, including the formation and growth of independent transmission entities;
changes in the allowed ROE on FERC-regulated electric transmission assets;
the availability of fuel and fluctuations in fuel prices;
the availability of materials and equipment, and the potential disruptions in supply chains resulting from the COVID-19 pandemic;
the availability of a skilled work force, including retaining the specialized skills of those who are nearing retirement;
the potential for reduced efficiency and productivity due to increased use of remote working arrangements;
regulatory lag;
the influence of macroeconomic factors on yields of United States Treasury securities and on the allowed ROE provided by regulators;
higher levels of infrastructure and technology investments and adjustments to customer rates associated with the refund of excess deferred income taxes that have resulted in, and are expected to continue to result in, negative or decreased free cash flow, which is defined as cash flows from operating activities less cash flows from investing activities and dividends paid;
the demand for access to renewable energy generation at rates acceptable to customers;
public concerns about the siting of new facilities, and challenges that members of the public can assert against applications for governmental permits and other approvals required to site and build new facilities that can result in significant cost increases, delays and denial of the permits and approvals by the regulators;
complex new and proposed environmental laws including statutes, regulations, and requirements, such as air and water quality standards, mercury emissions standards, CCR management requirements, and potential CO2 limitations, which may reduce the frequency at which electric generating units are dispatched based upon their CO2 emissions;
public concerns about the potential environmental impacts from the combustion of fossil fuels and the use of natural gas;
certain investors’ concerns about investing in utility companies that have coal-fired generation assets and increasing scrutiny of environmental, social, and governance practices;
aging infrastructure and the need to construct new power generation, transmission, and distribution facilities, which have long time frames for completion, with limited long-term ability to predict power and commodity prices and regulatory requirements;
public concerns about nuclear generation, decommissioning, and the disposal of nuclear waste;
industry reputational challenges resulting from recent high profile inappropriate lobbying and similar activities by certain utility companies; and
consolidation of electric and natural gas utility companies.
We are monitoring all these issues. Except as otherwise noted in this report, we are unable to predict what impact, if any, these issues will have on our results of operations, financial position, or liquidity. For additional information, see Risk Factors under Part I, Item 1A, Outlook in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.

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OPERATING STATISTICS
The following tables present key electric and natural gas operating statistics for Ameren for the past three years:
Electric Operating Statistics – Year Ended December 31,
202020192018
Electric Sales – kilowatthours (in millions):
Ameren Missouri:
Residential13,267 13,532 14,320 
Commercial13,117 14,269 14,791 
Industrial4,158 4,242 4,499 
Street lighting and public authority88 99 108 
Ameren Missouri retail load subtotal30,630 32,142 33,718 
Off-system7,578 5,477 10,036 
Ameren Missouri total38,208 37,619 43,754 
Ameren Illinois Electric Distribution(a):
Residential11,491 11,675 12,099 
Commercial11,414 12,341 12,717 
Industrial10,674 11,587 11,673 
Street lighting and public authority442 491 513 
Ameren Illinois Electric Distribution total34,021 36,094 37,002 
Eliminate affiliate sales(322)(84)(288)
Ameren total71,907 73,629 80,468 
Electric Operating Revenues (in millions):
Ameren Missouri:
Residential$1,373 $1,403 $1,560 
Commercial1,025 1,157 1,271 
Industrial261 278 312 
Other, including street lighting and public authority155 127 30 (b)
Ameren Missouri retail load subtotal$2,814 $2,965 $3,173 
Off-system170 144 278 
Ameren Missouri total$2,984 $3,109 $3,451 
Ameren Illinois Electric Distribution:
Residential$867 $848 $867 
Commercial486 497 511 
Industrial124 127 130 
Other, including street lighting and public authority21 32 39 
Ameren Illinois Electric Distribution total$1,498 $1,504 $1,547 
Ameren Transmission:
Ameren Illinois Transmission(c)
$329 $288 $267 
ATXI194 176 166 
Ameren Transmission total$523 $464 $433 
Other and intersegment eliminations(94)(96)(92)
Ameren total$4,911 $4,981 $5,339 
(a)Sales for which power was supplied by Ameren Illinois as well as alternative retail electric suppliers. In 2020, 2019, and 2018, Ameren Illinois procured power on behalf of its customers for 23%, 22%, and 23%, respectively, of its total kilowatthour sales.
(b)Includes $60 million for the year ended December 31, 2018, for the reduction to revenue for the excess amounts collected in rates related to the TCJA from January 1, 2018, through July 31, 2018. See Note 2 – Rate and Regulatory Matters for additional information.
(c)Includes $52 million, $62 million, and $53 million in 2020, 2019, and 2018, respectively, of electric operating revenues from transmission services provided to Ameren Illinois Electric Distribution.

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Electric Operating Statistics – Year Ended December 31,
202020192018
Ameren Missouri fuel costs (cents per kilowatthour generated)(a)
1.38 ¢1.38 ¢1.59 ¢
Source of Ameren Missouri energy supply:
Coal67.3 %63.4 %67.8 %
Nuclear19.4 23.3 23.7 
Hydroelectric4.5 5.0 2.5 
Natural gas0.5 0.5 1.0 
Methane gas and solar0.5 0.2 0.1 
Purchased – wind0.6 0.7 0.6 
Purchased power7.2 6.9 4.3 
Ameren Missouri total100.0 %100.0 %100.0 %
(a)    Ameren Missouri fuel costs exclude ($49) million, $5 million and $44 million in 2020, 2019, and 2018, respectively, for changes in FAC recoveries.
Natural Gas Operating Statistics – Year Ended December 31,
202020192018
Natural Gas Sales – dekatherms (in millions):
Ameren Missouri:
Residential7 
Commercial3 
Industrial1 
Transport9 
Ameren Missouri total20 21 21 
Ameren Illinois Natural Gas:
Residential55 61 60 
Commercial15 19 18 
Industrial7 
Transport96 101 100 
Ameren Illinois Natural Gas total173 185 182 
Ameren total193 206 203 
Natural Gas Operating Revenues (in millions):
Ameren Missouri:
Residential$76 $81 $90 
Commercial29 34 37 
Industrial4 
Transport and other16 15 
Ameren Missouri total$125 $134 $138 
Ameren Illinois Natural Gas:
Residential$541 $570 $581 
Commercial136 154 159 
Industrial14 13 17 
Transport and other69 60 58 
Ameren Illinois Natural Gas total$760 $797 $815 
Other and intercompany eliminations(2)(2)(1)
Ameren total$883 $929 $952 
Rate Base Statistics At December 31,
202020192018
Rate Base (in billions):
Electric transmission and distribution$12.1 $10.7 $9.4 
Natural gas transmission and distribution2.4 2.1 1.9 
Coal generation:
Labadie Energy Center0.9 0.9 0.8 
Sioux Energy Center0.7 0.6 0.6 
Rush Island Energy Center0.4 0.5 0.4 
Meramec Energy Center0.1 0.1 0.2 
Coal generation total2.1 2.1 2.0 
Nuclear generation1.5 1.4 1.3 
Renewable generation1.0 0.5 0.5 
Natural gas generation0.3 0.4 0.4 
Rate base total$19.4 $17.2 $15.5 
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AVAILABLE INFORMATION
The Ameren Companies make available free of charge through Ameren’s website (www.amereninvestors.com) their annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed with or furnished to the SEC pursuant to Sections 13(a) or 15(d) of the Exchange Act as soon as reasonably possible after such reports are electronically filed with, or furnished to, the SEC. These documents are also available through the SEC’s website (www.sec.gov). Ameren’s website is a channel of distribution for material information about the Ameren Companies. Financial and other material information is routinely posted to, and accessible at, Ameren’s website.
The Ameren Companies also make available free of charge through Ameren’s website the charters of Ameren’s board of directors’ Audit and Risk Committee, Human Resources Committee, Nominating and Corporate Governance Committee, Finance Committee, and Nuclear, Operations and Environmental Sustainability Committee; the corporate governance guidelines; a policy regarding communications to the board of directors; a policy and procedures document with respect to related-person transactions; a code of ethics applicable to all directors, officers and employees; a supplemental code of ethics for principal executive and senior financial officers; and a director nomination policy that applies to the Ameren Companies. The information on Ameren’s website, or any other website referenced in this report, is not incorporated by reference into this report.
ITEM 1A. RISK FACTORS
Investors should review carefully the following material risk factors and the other information contained in this report. The risks that the Ameren Companies face are not limited to those in this section. There may be further risks and uncertainties that are not presently known or that are not currently believed to be material that may adversely affect the results of operations, financial position, and liquidity of the Ameren Companies.
REGULATORY AND LEGISLATIVE RISKS
We are subject to extensive regulation of our businesses.
We are subject to federal, state, and local regulation. The extensive regulatory frameworks, some of which are more specifically identified in the following risk factors, regulate, among other matters, the electric and natural gas utility industries; the rate and cost structure of utilities, including an allowed ROE; the operation of nuclear power plants; the construction and operation of generation, transmission, and distribution facilities; the acquisition, disposal, depreciation and amortization of assets and facilities; the electric transmission system reliability; and wholesale and retail competition. In the planning and management of our operations, we must address the effects of existing and proposed laws and regulations and potential changes in our regulatory frameworks, including initiatives by federal and state legislatures, RTOs, utility regulators, and taxing authorities. Significant changes in the nature of the regulation of our businesses, including expiration of, or significant changes to, existing regulatory mechanisms, could require changes to our business planning and management of our businesses and could adversely affect our results of operations, financial position, and liquidity. Failure to obtain adequate rates or regulatory approvals in a timely manner; failure to obtain necessary licenses or permits from regulatory authorities; the impact of new or modified laws, regulations, standards, interpretations, or other legal requirements; or increased compliance costs could adversely affect our results of operations, financial position, and liquidity.
The electric and natural gas rates that we are allowed to charge are determined through regulatory proceedings, which are subject to intervention and appeal. Rates are also subject to legislative actions, which are largely outside of our control. Certain events could prevent us from recovering our costs in a timely manner or from earning adequate returns on our investments.
The rates that we are allowed to charge for our utility services significantly influence our results of operations, financial position, and liquidity. The electric and natural gas utility industry is highly regulated. The utility rates charged to customers are determined by governmental entities, including the MoPSC, the ICC, and the FERC. Decisions by these entities are influenced by many factors, including the cost of providing service, the prudency of expenditures, the quality of service, regulatory staff knowledge and experience, customer intervention, and economic conditions, as well as social and political views. Decisions made by these governmental entities regarding customer rates are largely outside of our control. We are exposed to regulatory lag and cost disallowances to varying degrees by jurisdiction, which, if unmitigated, could adversely affect our results of operations, financial position, and liquidity. Rate orders are also subject to appeal, which creates additional uncertainty as to the rates that we will ultimately be allowed to charge for our services. From time to time, our regulators may approve trackers, riders, or other recovery mechanisms that allow electric or natural gas rates to be adjusted without a traditional regulatory rate review. These mechanisms could be changed or terminated.
Ameren Missouri’s electric and natural gas utility rates and Ameren Illinois’ natural gas utility rates are typically established in regulatory proceedings that take up to 11 months to complete. Ameren Missouri’s rates established in those proceedings are primarily based on historical costs and revenues. Ameren Illinois’ natural gas rates established in those proceedings are based on estimated future costs and revenues. Thus, the rates that we are allowed to charge for utility services may not match our actual costs at any given time.
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Rates include an allowed return on investments established by the regulator, including a return at the applicable WACC on rate base, and an amount for income taxes based on the currently applicable statutory income tax rates and amortization associated with excess deferred income taxes. Although rate regulation is premised on providing an opportunity to earn a reasonable rate of return on rate base, there can be no assurance that the regulator will determine that our costs were prudently incurred or that the regulatory process will result in rates that will produce full recovery of such costs or provide for an opportunity to earn a reasonable return on those investments. Ameren Missouri and Ameren Illinois, and the utility industry generally, have an increased need for cost recovery, primarily driven by capital investments, which is likely to continue in the future. The resulting increase to the revenue requirement needed to recover such costs and earn a return on investments could result in more frequent regulatory rate reviews and requests for cost recovery mechanisms. Additionally, increasing rates could result in regulatory or legislative actions, as well as competitive or political pressures, all of which could adversely affect our results of operations, financial position, and liquidity.
As a result of its participation in performance-based formula ratemaking, Ameren Illinois’ ROE for its electric distribution service and its electric energy-efficiency investments is directly correlated to yields on United States Treasury bonds. Additionally, Ameren Illinois is required to achieve certain performance standards. With respect to its natural gas delivery service business, unless extended, Ameren Illinois’ QIP will sunset after December 2023.
Ameren Illinois elects to participate in a performance-based formula ratemaking framework established pursuant to the IEIMA for its electric distribution service. Ameren Illinois’ electric distribution revenues are decoupled from sales volumes, which ensures that the electric distribution revenues authorized in a regulatory rate review are not affected by changes in sales volumes. Ameren Illinois also has an electric energy-efficiency program rider, which includes a return at the applicable WACC on its program investments that is subject to performance-based formula ratemaking. The ICC annually reviews Ameren Illinois’ rate filings for reasonableness and prudency. If the ICC were to conclude that Ameren Illinois’ costs were not prudently incurred, the ICC would disallow recovery of such costs. The electric distribution service performance-based formula ratemaking framework expires at the end of 2022, if not extended by the legislature, while the decoupling provisions extend beyond the end of formula ratemaking by law. If the performance-based formula ratemaking framework is not extended or if Ameren Illinois elects not to participate, Ameren Illinois would then be required to establish future rates through a traditional regulatory rate review with the ICC, which might result in rates that do not produce a full or timely recovery of costs or provide for an adequate return on investments and would expose Ameren Illinois’ electric distribution business to the risks described in the immediately preceding risk factor.
The allowed ROE under both formula ratemaking recovery mechanisms is based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. Therefore, Ameren Illinois’ annual ROE for its electric distribution business is directly correlated to the yields on such bonds, which are outside of Ameren Illinois’ control. With respect to electric distribution service, 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 $10 million change in Ameren’s and Ameren Illinois’ annual net income, based on its 2021 projected rate base.
Ameren Illinois is also subject to performance standards. Failure to achieve the standards would result in a reduction in the company’s allowed ROE calculated under the ratemaking formulas. The performance standards applicable to electric distribution service include improvements in service reliability to reduce both the frequency and duration of outages, a reduction in the number of estimated bills, a reduction of consumption from inactive meters, and a reduction in bad debt expense. The electric distribution service regulatory framework provides for ROE penalties up to 38 basis points annually in 2021 and 2022 if these performance standards are not met. The allowed ROE on energy-efficiency investments can be increased or decreased up to 200 basis points, depending on the achievement of annual energy savings goals. Any adjustments to the allowed ROE for energy-efficiency investments will depend on annual performance for a historical period relative to energy savings goals. In 2020, 2019, and 2018, there were no performance-related basis point adjustments that materially affected financial results.
Ameren Illinois plans to invest up to approximately $100 million per year in electric energy-efficiency programs through 2025, and will earn a return on those investments. 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 QIP provides Ameren Illinois with recovery of, and a return on, qualifying natural gas infrastructure investments that are placed in service between regulatory rate reviews. Infrastructure investments under the QIP earn a return at the applicable WACC. Ameren Illinois’ QIP is subject to a rate impact limitation of a cumulative 4% per year since the most recent delivery service rate order, with no single year exceeding 5.5%. If the rate impact limitation was met in a particular year, the amount of rate base causing the QIP rate to exceed the limitation would be exposed to regulatory lag until a year when that amount could be recovered under QIP or is added to rate base as a part of a regulatory rate review. Upon issuance of a natural gas delivery service rate order, QIP rate base is transferred to base rates and the QIP is reset to zero. Without legislative action, the QIP will sunset after December 2023. If the QIP is not extended or there is no other regulatory change, Ameren Illinois will be subject to regulatory lag on its natural gas infrastructure investments that are placed in service between regulatory rate reviews, which could adversely affect Ameren Illinois’ results of operations, financial position, and liquidity.
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As a result of the election to use the PISA, Ameren Missouri’s electric rates are subject to a rate cap.
As a result of Ameren Missouri’s election to use the PISA, its rate increases are limited to a 2.85% compound annual growth rate in the average overall customer rate per kilowatthour, based on the electric rates that became effective in April 2017, less half of the annual savings from the TCJA that was passed on to customers as approved in the July 2018 MoPSC order. Both the rate cap and the PISA election are effective through December 2023, unless Ameren Missouri requests and receives MoPSC approval of an extension through December 2028.
If rate changes from the FAC or the RESRAM riders would cause rates to temporarily exceed the 2.85% rate cap, the overage would be deferred for future recovery in the next regulatory rate review; however, rates established in such regulatory rate review would be subject to the rate cap. Any deferred overages approved for recovery would be recovered in a manner consistent with costs recovered under the PISA. Increased capital investments and operating costs could cause customer rates to exceed the rate cap. In addition, a decrease in off-system sales, which are included in net energy costs, could also contribute to customer rates exceeding the rate cap. Off-system sales are affected by planned and unplanned outages at Ameren Missouri’s energy centers, and by curtailment of generation resulting from unfavorable economic conditions, among other things. Excluding customer rates under the MEEIA rider, which are not subject to the rate cap, Ameren Missouri would incur a penalty equal to the amount of deferred overage that would cause customer rates to exceed the 2.85% rate cap. A penalty incurred as the result of exceeding the rate cap could adversely affect Ameren’s and Ameren Missouri’s results of operations, financial position, and liquidity.
We are subject to various environmental laws. Significant capital expenditures are required to achieve and to maintain compliance with these environmental laws. Failure to comply with these laws could result in the closing of facilities, alterations to the manner in which these facilities operate, increased operating costs, delays and increased costs of building new facilities, or exposure to fines and liabilities.
Our electric generation, transmission, and distribution operations and natural gas transmission, distribution, and storage operations must comply with a variety of environmental laws that are enforced through statutory and regulatory requirements including permitting programs implemented by federal, state, and local authorities. Depending upon the business activity of specific facilities, such laws address emissions; discharges to water bodies; the storage, handling and disposal of hazardous substances and waste materials; siting and land use requirements; and potential ecological impacts. Complex and lengthy processes are required to obtain and renew approvals, permits, and licenses for new, existing, or modified facilities. Additionally, the use and handling of various chemicals or hazardous materials require release prevention plans and emergency response procedures. Further, we are subject to risks from changing or conflicting interpretations of existing laws, modification to existing laws, and new laws.
We are also subject to liability under environmental laws that address the remediation of environmental contamination on property currently or formerly owned by us or by our predecessors, as well as property contaminated by hazardous substances that we generated. Such properties include MGP sites and third-party sites, such as landfills. Additionally, private individuals may seek to enforce environmental laws against us. They could allege injury from exposure to hazardous materials, allege a failure to comply with environmental laws, seek to compel remediation of environmental contamination, or seek to recover damages resulting from that contamination.
Environmental regulations have a significant impact on the electric utility industry and compliance with these regulations could be costly for Ameren Missouri, which operates coal-fired power plants. As of December 31, 2020, Ameren Missouri’s coal-fired energy centers represented 11% and 23% of Ameren’s and Ameren Missouri’s rate base, respectively. Clean Air Act regulations that apply to 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, mercury, toxic metals, and acid gases, and CO2 emissions from new power plants. Clean Water Act regulations govern both water intake and discharges from power plants and require evaluation of the ecological and biological impact of our operations and could require modifications to water intake structures or more stringent limitations on wastewater discharges at Ameren Missouri’s energy centers. Depending upon the scope of modifications ultimately required by state regulators, these capital expenditures could be significant. The management and disposal of coal ash is regulated as a solid waste under the Resource Conservation and Recovery Act and the CCR rule, which require the closure of our surface impoundments at 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.
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 appealed the district court’s ruling to the United States Court of Appeals for the Eighth Circuit. The district court has stayed implementation of the majority of the requirements of its order while the case is under appeal. The ultimate resolution of this matter could have a material
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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.
The EPA’s Affordable Clean Energy Rule repealed the Clean Power Plan and replaced it with a new rule that had established emission guidelines for states to follow in developing plans to limit CO2 emissions and identified certain efficiency measures as the best system of emission reduction for coal-fired electric generating units. In January 2021, the United States Court of Appeals for the District of Columbia Circuit vacated the Affordable Clean Energy Rule, and ruled that the EPA had the discretion to consider emission reduction measures that include efficiency measures and generation shifting to lower carbon emissions. Additional litigation including reconsideration by the entire United States Court of Appeals for the District of Columbia Circuit or an appeal to the United States Supreme Court is possible. Regardless of the outcome of such potential legal challenges, the EPA is likely to develop new regulations to address carbon emissions from coal and natural gas electric generating units, which could take years to finalize. At this time, Ameren Missouri cannot predict the outcome of legal challenges or future rulemakings. As such, the impact on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri is uncertain.
Ameren and Ameren Missouri have incurred, and expect to incur, significant costs with respect to environmental compliance and site remediation. New or revised environmental regulations, enforcement initiatives, or legislation could result in a significant increase in capital expenditures and operating costs, decreased revenues, increased financing requirements, penalties or fines, or reduced operations of some of Ameren Missouri’s coal-fired energy centers, which, in turn, could lead to increased liquidity needs and higher financing costs. Actions required to ensure that Ameren Missouri’s facilities and operations are in compliance with environmental laws could be prohibitively expensive for Ameren Missouri if the costs are not fully recovered through rates. Environmental laws could require Ameren Missouri to close or to alter significantly the operations of its energy centers. If Ameren Missouri requests recovery of capital expenditures and costs for environmental compliance through rates, the MoPSC could deny recovery of all or a portion of these costs, prevent timely recovery, or make changes to the regulatory framework in an effort to minimize rate volatility and customer rate increases. Capital expenditures and costs to comply with future legislation or regulations might result in Ameren Missouri closing coal-fired energy centers earlier than planned. If these costs are not recoverable through rates, it could lead to an impairment of assets and reduced revenues. Any of the foregoing could have an adverse effect on our results of operations, financial positions, and liquidity.
We are subject to federal regulatory compliance and proceedings, which could result in increasing costs and the potential for regulatory penalties and other sanctions.
We are subject to FERC regulations, rules, and orders, including standards required by the NERC. As owners and operators of bulk power transmission systems and electric energy centers, we are subject to mandatory NERC reliability standards, including cybersecurity standards. In addition, our natural gas transmission, distribution, and storage facilities systems are subject to PHMSA rules and regulations. Compliance with these reliability standards, rules, and regulations may subject us to higher operating costs and may result in increased capital expenditures. We may also incur higher operating costs to comply with potential new regulations issued by these regulatory bodies. If we were found not to be in compliance with these mandatory NERC reliability standards, PHMSA rules and regulations, or FERC regulations, rules, and orders, we could incur substantial monetary penalties and other sanctions, which could adversely affect our results of operations, financial position, and liquidity. The FERC can impose civil penalties of approximately $1.3 million per violation per day for violation of its regulations, rules, and orders, including mandatory NERC reliability standards. The FERC also conducts audits and reviews of Ameren Missouri’s, Ameren Illinois’, and ATXI’s accounting records to assess the accuracy of their respective formula ratemaking process, and it can require refunds to customers for previously billed amounts, with interest.
OPERATIONAL RISKS
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 constantly evolving situation. In 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. 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
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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 experienced and expect to continue to experience changes to our sales volumes. In 2020, compared to 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. The COVID-19 pandemic will 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 2021 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 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, changes in sales volumes at Ameren Missouri and those associated with Ameren Illinois’ large nonresidential natural gas customers may affect net income.
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 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 and all other residential customers are expected to begin in April 2021, which is after the annual winter moratorium period on disconnections that ends March 31, 2021. Ameren Illinois began the winter moratorium on November 18, 2020, which has historically started at the beginning of December. 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. 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 December 31, 2020, accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement represented 29%, 22%, and 35%, or $133 million, $40 million, and $93 million, of Ameren’s, Ameren Missouri’s, and Ameren Illinois’ customer trade receivables before allowance for doubtful accounts, respectively. As of December 31, 2019, these percentages were 18%, 18%, and 20%, or $75 million, $30 million, and $45 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 provided for the recovery of bad debt expense in 2020, which reverted to the recovery of bad debt write-offs, net of any subsequent recoveries, in 2021. Ameren Missouri does not have a bad debt rider or tracker, and thus its earnings are exposed to increases in bad debt expense, absent regulatory relief. However, Ameren Missouri does not expect a material impact to earnings from increases in bad debt expense. While Ameren Missouri is 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, 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.
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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.
The construction and acquisition of, and capital improvements to, electric and natural gas utility infrastructure, along with Ameren Missouri’s ability to implement its Smart Energy Plan, which is aligned with its 2020 IRP, involve substantial risks.
We expect to make significant capital expenditures to maintain and improve our electric and natural gas utility infrastructure and to comply with existing environmental regulations. We estimate that we will invest up to $17.8 billion (Ameren Missouri – up to $9.3 billion; Ameren Illinois – up to $8.2 billion; ATXI – up to $0.2 billion) of capital expenditures from 2021 through 2025. For additional information on these estimates, see Liquidity and Capital Resources – Capital Expenditures in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report. Investments in Ameren’s rate-regulated operations are expected to be recoverable from customers, but they are subject to prudence reviews and are exposed to regulatory lag of varying degrees by jurisdiction.
Our ability to complete construction projects successfully within projected estimates, including schedule, performance, and/or cost, and to implement Ameren Missouri’s Smart Energy Plan, which may include acquisition of generation facilities after they are constructed, is contingent upon many factors and subject to substantial risks. These factors include, but are not limited to, the following: project management expertise; escalating costs and/or shortages for labor, materials, and equipment, including changes to tariffs on materials; the ability of suppliers, contractors, and developers to meet contractual commitments timely; changes in the scope and timing of projects; the ability to obtain required regulatory, project, and permit approvals; the ability to obtain necessary rights-of-way, easements, and transmission connections at an acceptable cost in a timely fashion; unsatisfactory performance by the projects when completed; the inability to earn an adequate return on invested capital; the ability to raise capital on reasonable terms; and other events beyond our control, including construction delays due to weather. With respect to the transition of Ameren Missouri’s generation fleet and achievement of the carbon emission reduction targets outlined in the 2020 IRP, factors also include MoPSC approval for the retirement of energy centers and new or continued customer energy-efficiency programs; the cost of wind, solar, and other renewable generation and storage technologies; the ability to qualify for, and use, federal production or investment tax credits; changes in environmental laws or requirements, including those related to carbon emissions; and energy prices and demand.
Any of these risks could result in higher costs, the inability to complete anticipated projects, or facility closures, and could adversely affect our results of operations, financial position, and liquidity.
Our electric generation, transmission, and distribution facilities are subject to operational risks.
Our financial performance depends on the successful operation of electric generation, transmission, and distribution facilities. Operation of electric generation, transmission, and distribution facilities involves many risks, including:
facility shutdowns due to operator error, or a failure of equipment or processes;
longer-than-anticipated maintenance outages;
failures of equipment that can result in unanticipated liabilities or unplanned outages, such as the unplanned outage resulting from non-nuclear operating issues related to the Callaway Energy Center’s generator;
aging infrastructure that may require significant expenditures to operate and maintain;
an energy center that might not be permitted to continue to operate if pollution control equipment is not installed by prescribed deadlines or does not perform as expected;
lack of adequate water required for cooling plant operations;
labor disputes;
disruptions in the delivery of electricity to our customers;
suppliers and contractors who do not perform as required under their contracts;
failure of other operators’ facilities and the effect of that failure on our electric system and customers;
inability to comply with regulatory or permit requirements, including those relating to environmental laws;
handling, storage, and disposition of CCR;
unusual or adverse weather conditions or other natural disasters, including severe storms, droughts, floods, tornadoes, earthquakes, sustained high or low temperatures, icing, solar flares, and electromagnetic pulses, such as the extremely low temperatures experienced in mid-February 2021;
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the level of wind and solar resources;
inability to operate wind generation facilities at full capacity resulting from requirements to protect natural resources, including wildlife;
the occurrence of catastrophic events such as fires, explosions, acts of sabotage or terrorism, civil unrest, pandemic health events, including the COVID-19 pandemic, or other similar events;
accidents that might result in injury or loss of life, extensive property damage, or environmental damage;
ineffective vegetation management programs;
cybersecurity risks, including loss of operational control of Ameren Missouri’s energy centers and our transmission and distribution systems and loss of data, including sensitive customer, employee, financial, and operating system information, through insider or outsider actions;
limitations on amounts of insurance available to cover losses that might arise in connection with operating our electric generation, transmission, and distribution facilities;
inability to implement or maintain information systems;
failure to keep pace with and the ability to adapt to rapid technological change; and
other unanticipated operations and maintenance expenses and liabilities.
The foregoing risks could affect the controls and operations of our facilities or impede our ability to meet regulatory requirements, which could increase operating costs, increase our capital requirements and costs, reduce our revenues, or have an adverse effect on our liquidity.
Ameren Missouri’s ability to obtain an adequate supply of coal could limit operation of its coal-fired energy centers.
Ameren Missouri owns and operates coal-fired energy centers. About 97% of Ameren Missouri’s coal is purchased from the Powder River Basin in Wyoming, which has a limited number of suppliers. Deliveries from the Powder River Basin have occasionally been restricted because of rail congestion and maintenance, derailments, weather, and supplier financial hardship. Coal suppliers in the Power River Basin are experiencing financial hardship because of a decrease in demand resulting from increased natural gas and renewable energy generation, and the impact of environmental regulations, as well as concerns related to coal-fired generation. These financial hardships have resulted in bankruptcy filings by certain coal suppliers in recent years. As of December 31, 2020, coal inventories for Ameren Missouri were near targeted levels. However, disruptions in the delivery of coal, failure of our coal suppliers to provide adequate quantities or quality of coal, or lack of adequate inventories of coal, including low-sulfur coal used to comply with environmental regulations, could have adverse effects on Ameren Missouri’s electric generation operations. If Ameren Missouri is unable to obtain an adequate supply of coal under existing agreements, it may be required to purchase coal at higher prices or be forced to reduce generation at its coal-fired energy centers, which could adversely affect Ameren’s and Ameren Missouri’s results of operations, financial position, and liquidity.
Ameren Missouri’s ownership and operation of a nuclear energy center creates business, financial, and waste disposal risks.
Ameren Missouri’s ownership of the Callaway Energy Center subjects it to risks associated with nuclear generation, including:
potential harmful effects on the environment and human health resulting from radiological releases associated with the operation of nuclear facilities and the storage, handling, and disposal of radioactive materials;
continued uncertainty regarding the federal government’s plan to permanently store spent nuclear fuel and, as a result, the need to provide for long-term storage of spent nuclear fuel at the Callaway Energy Center;
limitations on the amounts and types of insurance available to cover losses that might arise in connection with the Callaway Energy Center or other United States nuclear facilities;
uncertainties about contingencies and retrospective premium assessments relating to claims at the Callaway Energy Center or any other United States nuclear facilities;
public and governmental concerns about the safety and adequacy of security at nuclear facilities;
limited availability of fuel supply and our reliance on licensed fuel assemblies from the one NRC-licensed supplier of Callaway Energy Center’s assemblies;
costly and extended outages for scheduled or unscheduled maintenance and refueling;
uncertainties about the technological and financial aspects of decommissioning nuclear facilities at the end of their licensed lives;
the adverse effect of poor market performance and other economic factors on the asset values of nuclear decommissioning trust funds and the corresponding increase, upon MoPSC approval, in customer rates to fund the estimated decommissioning costs; and
potential adverse effects of a natural disaster, acts of sabotage or terrorism, including a cyber attack, or any accident leading to a radiological release.
The NRC has broad authority under federal law to impose licensing and safety requirements for nuclear facilities. In the event of noncompliance, the NRC has the authority to impose fines or to shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved. Revised safety requirements promulgated from time to time by the NRC could necessitate substantial capital expenditures at the Callaway Energy Center. In addition, if a serious nuclear incident were to occur, it could adversely affect Ameren’s and Ameren Missouri’s results of operations, financial condition, and liquidity. A major incident at a nuclear facility anywhere
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in the world could cause the NRC to limit or prohibit the operation of any domestic nuclear unit and could also cause the NRC to impose additional conditions or requirements on the industry, which could increase costs and result in additional capital expenditures. NRC standards relating to seismic risk require Ameren Missouri to further evaluate the impact of an earthquake on its Callaway Energy Center due to its proximity to a fault line, which could require the installation of additional capital equipment.
Our natural gas distribution and storage activities involve numerous risks that may result in accidents and increased operating costs.
Inherent in our natural gas distribution and storage activities are a variety of hazards and operating risks, such as leaks, explosions, mechanical problems and cybersecurity risks, which could cause substantial financial losses, including fines and penalties. In addition, these hazards could result in serious injury, loss of human life, significant damage to property, environmental impacts, and impairment of our operations, which in turn could lead us to incur substantial losses. The location of distribution mains and storage facilities near populated areas, including residential areas, business centers, industrial sites, and other public gathering places, could increase the level of damages resulting from these risks. A major domestic incident involving natural gas distribution, and storage systems could result in additional capital expenditures and/or increased operations and maintenance expenses for us and increased regulation of natural gas utilities. The occurrence of any of these events could adversely affect our results of operations, financial position, and liquidity.
Significant portions of our electric generation, transmission, and distribution facilities and natural gas transmission and distribution facilities are aging. This aging infrastructure may require significant additional maintenance or replacement. Ameren Missouri could be adversely affected if it is unable to recover the remaining investment, if any, and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs.
Our aging infrastructure may pose risks to system reliability and expose us to expedited or unplanned significant capital expenditures and operating costs. All of Ameren Missouri’s coal-fired energy centers were constructed prior to 1978, and the Callaway Energy Center began operating in 1984. The age of these energy centers increases the risks of unplanned outages, reduced generation output, and higher maintenance expense. Further, Ameren Missouri would be adversely affected if the MoPSC does not allow recovery of the remaining investment and decommissioning costs associated with the retirement of an energy center, as well as the ability to earn a return on that remaining investment and those decommissioning costs. As indicated it its 2020 IRP, Ameren Missouri intends to advance 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. Aging transmission and distribution facilities are more prone to failure than new facilities, which results in higher maintenance expense and the need to replace these facilities with new infrastructure. Even if the system is properly maintained, its reliability may ultimately deteriorate and negatively affect our ability to serve our customers, which could result in increased costs associated with regulatory oversight. The frequency and duration of customer outages are among the IEIMA performance standards. Any failure to achieve these standards will result in a reduction in Ameren Illinois’ allowed ROE on electric distribution assets. The higher maintenance costs associated with aging infrastructure and capital expenditures for new or replacement infrastructure could cause additional rate volatility for our customers, resistance by our regulators to allow customer rate increases, and/or regulatory lag in some of our jurisdictions, any of which could adversely affect our results of operations, financial position, and liquidity.
Energy conservation, energy efficiency, distributed generation, energy storage, technological advances, and other factors could reduce energy demand from our customers.
Without a regulatory mechanism to ensure recovery, declines in energy usage could result in an under-recovery of our revenue requirement or an increase in our customer rates, as the revenue requirement would be spread over less sales volumes, which could adversely affect our results of operations, financial position, and liquidity. Such declines could occur due to a number of factors, including:
customer energy-efficiency programs that are designed to reduce energy demand;
energy-efficiency efforts by customers not related to our energy-efficiency programs;
increased customer use of distributed generation sources, such as solar panels and other technologies, which have become more cost-competitive, with decreasing costs expected in the future, as well as the use of energy storage technologies; and
macroeconomic factors resulting in low economic growth or contraction within our service territories, which could reduce energy demand.
Decreased use of our generation, transmission, and distribution services might result in stranded costs, which ultimately might not be recovered through rates, and therefore, could lead to an impairment of assets.
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FINANCIAL, ECONOMIC, AND MARKET RISKS
Ameren’s holding company structure could limit its ability to pay common stock dividends and to service its debt obligations.
Ameren is a holding company; therefore, its primary assets are its investments in the common stock of its subsidiaries, including Ameren Missouri, Ameren Illinois, and ATXI. As a result, Ameren’s ability to pay dividends on its common stock depends on the earnings of its subsidiaries and the ability of its subsidiaries to pay dividends or otherwise transfer funds to Ameren. Similarly, Ameren’s ability to service its debt obligations is dependent upon the earnings of its operating subsidiaries and the distribution of those earnings and other payments, including payments of principal and interest under affiliate indebtedness. The payment of dividends to Ameren by its subsidiaries in turn depends on their results of operations, and other items affecting retained earnings, and available cash. Ameren’s subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of affiliate borrowing arrangements and cash payments under the tax allocation agreement) to Ameren. Certain financing agreements, corporate organizational documents, and certain statutory and regulatory requirements may impose restrictions on the ability of Ameren Missouri, Ameren Illinois, and ATXI to transfer funds to Ameren in the form of cash dividends, loans, or advances.
Costs associated with our defined benefit retirement and postretirement plans, health care plans, and other employee benefits could increase.
Ameren has defined benefit pension plans covering substantially all of its employees and has postretirement benefit plans covering non-union employees hired before October 2015 and union employees hired before January 2020. Assumptions related to future costs, returns on investments, interest rates, timing of employee retirements, and mortality, as well as other actuarial matters, have a significant impact on our customers’ rates and our plan funding requirements. Ameren’s total pension and postretirement benefit plans were overfunded by $249 million as of December 31, 2020. Ameren expects to fund its pension plans at a level equal to the greater of the pension cost or the legally required minimum contribution. Based on Ameren’s assumptions at December 31, 2020, its investment performance in 2020, and its pension funding policy, Ameren expects to make aggregate contributions of $60 million over the next five years. Ameren Missouri’s and Ameren Illinois’ portions of the future funding requirements are estimated to be 30% and 60%, respectively. These estimates may change with actual investment performance, changes in interest rates, changes in our assumptions, changes in government regulations, and any voluntary contributions.
In addition to the costs of our pension plans, the costs of providing health care benefits to our employees and retirees have increased in recent years. We believe that our employee benefit costs, including costs of health care plans for our employees and former employees, will continue to rise. Future legislative changes related to health care could also significantly change our benefit programs and costs. The increasing costs and funding requirements associated with our defined benefit retirement plans, health care plans, and other employee benefits could increase our financing needs and otherwise adversely affect our financial position and liquidity.
GENERAL RISKS
Customers’, investors’, legislators’, and regulators’ opinions of us are affected by many factors, including system reliability, implementation of our strategic plan, protection of customer information, rates, media coverage, and environmental, social, and governance practices, as well as actions by other utility companies. Negative opinions developed by customers, investors, legislators, or regulators could harm our reputation.
Service interruptions and facility shutdowns can occur due to failures of equipment as a result of severe or destructive weather or other causes. The ability of Ameren Missouri and Ameren Illinois to respond promptly to such failures can affect customer satisfaction. In addition to system reliability issues, the success of modernization efforts, our ability to safeguard sensitive customer information and protect our systems from cyber attacks, and other actions can affect customer satisfaction. The level of rates, the timing and magnitude of rate increases, and the volatility of rates can also affect customer satisfaction.
Our ability to successfully execute our strategic plan, including the transition of Ameren Missouri’s generation fleet and achievement of the carbon emission reduction targets outlined in the 2020 IRP, may affect customers’, investors’, legislators’, and regulators’ opinions and actions. Additionally, negative perceptions or publicity resulting from increasing scrutiny of environmental, social, and governance practices could negatively impact our reputation, investment in our common stock, or our access to capital markets. Customers’, investors’, legislators’, and regulators’ opinions of us can also be affected by media coverage, including social media, which may include information, whether factual or not, that damages our brand and reputation.
If customers, investors, legislators, or regulators have or develop a negative opinion of us and our utility services, this could result in increased costs associated with regulatory oversight and could affect the ROEs we are allowed to earn, as well as the access to, and the cost of, capital. Additionally, negative opinions about us or other utility companies could make it more difficult for our businesses to achieve
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favorable legislative or regulatory outcomes. Negative opinions could also result in sales volume reductions or increased use of distributed generation by our customers. Any of these consequences could adversely affect our results of operations, financial position, and liquidity.
We are subject to employee work force factors that could adversely affect our operations.
Our businesses depend upon our ability to employ and retain key officers and other skilled professional and technical employees. Certain specialized knowledge that focuses on skilled-craft and STEM-related disciplines is required to construct and operate generation, transmission, and distribution assets. Further, a significant portion of our work force is nearing retirement. We are also party to collective bargaining agreements that collectively represent about 48% of Ameren’s total employees. Certain events, such as an aging workforce without adequately trained replacement employees, the mismatch of skill sets to future needs, or any work stoppage experienced in connection with negotiations of collective bargaining agreements, could adversely affect our operations.
Our operations are subject to acts of terrorism, cyber attacks, and other intentionally disruptive acts.
Like other electric and natural gas utilities, our energy centers, fuel storage facilities, transmission and distribution facilities, and information systems may be affected by terrorist activities and other intentionally disruptive acts, including cyber attacks, which could disrupt our ability to produce or distribute our energy products. There have been attacks on energy infrastructure, such as substations and related assets, in the past, and there may be more attacks in the future as technology becomes more prevalent in energy infrastructure. Any such incident could limit our ability to generate, purchase, or transmit power or natural gas and could have significant regional economic consequences. Any such disruption could result in a significant decrease in revenues, a significant increase in costs including those for repair, or adversely affect economic activity in our service territory which, in turn, could adversely affect our results of operations, financial position, and liquidity.
There has been an increase in the number and sophistication of cyber attacks across all industries worldwide. Cyber attacks could include viruses, malicious or destructive code, phishing attacks, denial of service attacks, ransomware and other ransom-based attacks, improper access by third parties, attacks on email systems, and ransom demands to not expose sensitive data, operational control, or security vulnerabilities specific to our systems, among various other security breaches. A security breach at our physical assets or in our information systems could affect the reliability of the transmission and distribution system, disrupt electric generation, including nuclear generation, and/or subject us to financial harm resulting from theft or the inappropriate release or destruction of certain types of information, including sensitive customer, employee, financial, and operating system information. Many of our suppliers, vendors, contractors, and information technology providers have access to systems that support our operations and maintain customer and employee data. A breach of these third-party systems could adversely affect our business as if it was a breach of our own system. If a significant breach occurred, our reputation could be adversely affected, customer confidence could be diminished, and/or we could be subject to increased costs associated with regulatory oversight, fines or legal claims, any of which could result in a significant decrease in revenues or significant costs for remedying the impacts of such a breach. Our generation, transmission, and distribution systems are part of an interconnected system. Therefore, a disruption caused by a cyber incident at another utility, electric generator, RTO, or commodity supplier could also adversely affect our businesses. Insurance might not be adequate to cover losses that arise in connection with these events. In addition, new regulations could require changes in our security measures and result in increased costs. The occurrence of any of these events could adversely affect our results of operations, financial position, and liquidity.
Our businesses are dependent on our ability to access the capital markets successfully. We might not have access to sufficient capital in the amounts and at the times needed, as well as on reasonable terms.
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. The inability to raise debt or equity capital on reasonable terms, or at all, could negatively affect our ability to maintain or to expand our businesses. Events beyond our control, such as depressed economic conditions, the COVID-19 pandemic, or extreme volatility in the debt, equity, or credit markets, 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. Any adverse change in our credit ratings could reduce access to capital and trigger collateral postings and prepayments. Such changes could also increase the cost of borrowing and the costs of fuel, power, and natural gas supply, among other things, which could adversely affect our results of operations, financial position, and liquidity.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
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ITEM 2.PROPERTIES
For information on our principal properties, see the energy center table below. See also Liquidity and Capital Resources and Regulatory Matters in Management’s Discussion and Analysis of Financial Condition and Results of Operations under Part II, Item 7, of this report for a discussion of planned additions, replacements, or transfers. See also Note 5 – Long-term Debt and Equity Financings and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report.
The following table shows the anticipated capability of Ameren Missouri’s energy centers at the time of Ameren Missouri’s expected 2021 peak summer electrical demand for all energy centers owned as of December 31, 2020:
Primary Fuel SourceEnergy CenterLocation
Net Kilowatt Capability(a)
Coal
Labadie(b)
Franklin County, Missouri2,372,000 
Rush Island(c)
Jefferson County, Missouri1,178,000 
Sioux(c)
St. Charles County, Missouri972,000 
 
Meramec(c)
St. Louis County, Missouri540,000 
Total coal  5,062,000 
Nuclear
Callaway(d)
Callaway County, Missouri1,194,000 
Hydroelectric
Osage(d)
Lakeside, Missouri235,000 
 KeokukKeokuk, Iowa148,000 
Total hydroelectric  383,000 
Pumped-storage
Taum Sauk(d)
Reynolds County, Missouri440,000 
Wind(e)
High PrairieAdair and Schuyler Counties, Missouri400,000 
Natural gas
Audrain(f)
Audrain County, Missouri616,000 
VeniceVenice, Illinois495,000 
Goose CreekPiatt County, Illinois444,000 
PinckneyvillePinckneyville, Illinois316,000 
Raccoon CreekClay County, Illinois308,000 
Meramec(c)(g)
St. Louis County, Missouri226,000 
KinmundyKinmundy, Illinois210,000 
Peno Creek(f)
Bowling Green, Missouri192,000 
Total natural gas  2,807,000 
Oil (CTs)
Fairgrounds(c)
Jefferson City, Missouri55,000 
Mexico(c)
Mexico, Missouri55,000 
Moberly(c)
Moberly, Missouri55,000 
Moreau(c)
Jefferson City, Missouri55,000 
Total oil  220,000 
Methane gas (CT)Maryland HeightsMaryland Heights, Missouri8,000 
SolarO’FallonO’Fallon, Missouri4,500 
LambertSt. Louis County, Missouri1,000 
BJCSt. Louis, Missouri1,500 
Total solar7,000 
Total Ameren and Ameren Missouri  10,521,000 
(a)Net kilowatt capability, except for wind and solar generating facilities, is the generating capacity available for dispatch from the energy center into the electric transmission grid. Capability for wind and solar facilities represents nameplate capacity. This capacity is only attainable when wind/solar conditions are sufficiently available. The on-demand capability for wind and solar units is zero.
(b)The Labadie Energy Center is scheduled to retire 1,186,000 kilowatts by 2036 and 1,186,000 kilowatts by 2042.
(c)The Rush Island, Sioux, and Meramec energy centers are scheduled to retire by 2039, 2028, and 2022, respectively. The retirement dates of the Rush Island and Sioux energy centers are proposed to be advanced from their previous retirement dates of 2045 and 2033, respectively, as part of the 2020 IRP. The Fairgrounds, Mexico, Moberly, and Moreau energy centers are scheduled to be retired by 2026 as part of the 2020 IRP. Advancing the retirement date of an energy center is subject to the approval of a change in the assets’ depreciable lives by the MoPSC in a future regulatory rate review.
(d)The operating licenses for the Callaway, Osage, and Taum Sauk energy centers expire in 2044, 2047, and 2044, respectively.
(e)Ameren Missouri acquired the Atchison Renewable Energy Center in January 2021. As of the date of this filing, 120,000 kilowatts were in service. Ameren Missouri expects approximately 150,000 kilowatts of the up-to 300,000-kilowatt project to be in service by the end of the first quarter of 2021, and the remaining portion to be in service later in 2021.
(f)There are economic development arrangements applicable to these CTs, as discussed below.
(g)Its two operating units are steam-powered.

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The following table presents in-service electric and natural gas utility-related properties for Ameren Missouri and Ameren Illinois as of December 31, 2020:
Ameren
Missouri
Ameren
Illinois
Circuit miles of electric transmission lines(a)
3,150 4,662 
Circuit miles of electric distribution lines34,122 46,911 
Percentage of circuit miles of electric distribution lines underground24 %16 %
Miles of natural gas transmission and distribution mains3,466 18,565 
Underground natural gas storage fields— 12 
Total working capacity of underground natural gas storage fields in billion cubic feet— 24 
(a)ATXI owns 544 miles of transmission lines not reflected in this table.
Our other properties include office buildings, warehouses, garages, and repair shops.
With only a few exceptions, we have fee title to all principal energy centers and other units of property material to the operation of our businesses, and to the real property on which such facilities are located (subject to mortgage liens securing our outstanding first mortgage bonds and to certain permitted liens and judgment liens). The exceptions are as follows:
Certain property is situated on lands occupied under leases, easements, franchises, licenses, or permits. That property includes a portion of Ameren Missouri’s Osage Energy Center reservoir; certain facilities at Ameren Missouri’s Sioux Energy Center; most of Ameren Missouri’s High Prairie Renewable, Atchison Renewable, Peno Creek CT and Audrain CT energy centers; Ameren Missouri’s Maryland Heights, Lambert, and BJC energy centers; certain substations; and most transmission and distribution lines and natural gas mains. The United States or the state of Missouri may own or may have paramount rights with respect to certain lands lying in the bed of the Osage River or located between the inner and outer harbor lines of the Mississippi River on which certain of Ameren Missouri’s energy centers and other properties are located.
The United States, the state of Illinois, the state of Iowa, or the city of Keokuk, Iowa, may own or may have paramount rights with respect to certain lands lying in the bed of the Mississippi River on which a portion of Ameren Missouri’s Keokuk Energy Center is located.
Substantially all of the properties and plant of Ameren Missouri and Ameren Illinois are subject to the liens of the indentures securing their mortgage bonds.
Ameren Missouri has conveyed most of its Peno Creek CT Energy Center to the city of Bowling Green, Missouri through December 2022. Ameren Missouri has rights and obligations as the operator of the energy center under a long-term agreement with the city of Bowling Green. Under the terms of this agreement, Ameren Missouri is responsible for all operation and maintenance for the energy center. Ownership of the energy center will transfer to Ameren Missouri at the expiration of the agreement, at which time the property, plant, and equipment will become subject to the lien of the Ameren Missouri mortgage bond indenture.
Ameren Missouri operates a CT energy center located in Audrain County, Missouri. Ameren Missouri has rights and obligations as the operator of the energy center under a long-term agreement with Audrain County. Under the terms of this agreement, Ameren Missouri is responsible for all operation and maintenance for the energy center. The agreement will expire in December 2023. Ownership of the energy center will transfer to Ameren Missouri at the expiration of the agreement, at which time the property, plant, and equipment will become subject to the lien of the Ameren Missouri mortgage bond indenture.
ITEM 3.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. We believe that we have established appropriate reserves for potential losses. For additional information on material legal and administrative proceedings, see Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report. Pursuant to Item 103(c)(3)(iii) of Regulation 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 monetary sanctions of $1 million or more.

ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
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INFORMATION ABOUT OUR EXECUTIVE OFFICERS:
The executive officers of the Ameren Companies, including major subsidiaries, are listed below, along with their ages as of December 31, 2020, all their positions and offices held with the Ameren Companies as of February 22, 2021, their tenures as officers, and their business backgrounds for at least the last five years. Some executive officers hold multiple positions within the Ameren Companies; their titles are given in the description of their business experience.
AMEREN CORPORATION:
NameAgePositions and Offices Held
Warner L. Baxter59 Chairman, President and Chief Executive Officer, and Director
Baxter joined Ameren Missouri in 1995. He was elected to the positions of executive vice president and chief financial officer of Ameren, Ameren Missouri, Ameren Illinois, and Ameren Services in 2003. He was elected chairman, president, chief executive officer, and chief financial officer of Ameren Services in 2007. In 2009, he was elected chairman, president, and chief executive officer of Ameren Missouri. In 2014, he was elected chairman, president, and chief executive officer of Ameren, and relinquished his positions at Ameren Missouri.
Michael L. Moehn51 Executive Vice President and Chief Financial Officer
Moehn joined Ameren Services in 2000. In 2004, he was elected vice president, corporate planning, of Ameren Services. In 2008, he was elected senior vice president, corporate planning and business risk management, of Ameren Services. In 2012, he was elected senior vice president, customer operations, of Ameren Missouri, and relinquished his position at Ameren Services. In 2014, he was elected chairman and president of Ameren Missouri. In December 2019, he was elected executive vice president and chief financial officer of the Ameren Companies and chairman and president of Ameren Services and relinquished his positions at Ameren Missouri.
Chonda J. Nwamu49 Senior Vice President, General Counsel, and Secretary
Nwamu joined Ameren Services in September 2016 as vice president and deputy general counsel. In January 2019, she was elected senior vice president and deputy general counsel of Ameren Services. In August 2019, she was elected senior vice president, general counsel and secretary of the Ameren Companies. Prior to joining Ameren Services, she served as regulatory counsel at Pacific Gas and Electric Company, a public utility, from 2000 to May 2014 and as managing counsel and senior director from June 2014 to June 2016.
Bruce A. Steinke59 Senior Vice President, Finance, and Chief Accounting Officer
Steinke joined Ameren Services in 2002. In 2008, he was elected vice president and controller of Ameren, Ameren Illinois, and Ameren Services. In 2009, he relinquished his positions at Ameren Illinois. In 2013, he was elected senior vice president, finance, and chief accounting officer of the Ameren Companies.
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SUBSIDIARIES:
NameAgePositions and Offices Held
Bhavani Amirthalingam45Senior Vice President and Chief Digital Information Officer (Ameren Services)
Amirthalingam joined Ameren Services in March 2018 as senior vice president and chief digital information officer. She served as the chief information officer and vice president North America for Schneider Electric SE, an energy management and automation solutions company, from January 2015 to March 2018 and in various roles at World Wide Technology Inc., a technology solution provider, from November 1999 to January 2015, most recently serving as vice president of customer solutions and innovation from September 2013 to January 2015.
Mark C. Birk56 Senior Vice President, Customer and Power Operations (Ameren Missouri)
Birk joined Ameren Missouri in 1986. In 2004, he was elected vice president, power operations, of Ameren Missouri. In 2012, he was elected senior vice president, corporate planning, of Ameren Services. In 2014, he was also elected senior vice president, oversight, of Ameren Services, and in 2015, he was elected senior vice president, corporate safety, planning and operations oversight. In January 2017, he was elected senior vice president, customer operations, at Ameren Missouri and relinquished his positions at Ameren Services. In October 2017, he was elected senior vice president, customer and power operations, at Ameren Missouri.
Fadi M. Diya58 Senior Vice President and Chief Nuclear Officer (Ameren Missouri)
Diya joined Ameren Missouri in 2005. In 2008, he was elected vice president, nuclear operations, of Ameren Missouri. In 2014, he was elected senior vice president and chief nuclear officer of Ameren Missouri.
Mary P. Heger64 Senior Vice President, Customer Experience (Ameren Illinois)
Heger joined Ameren Missouri in 1976. In 2009, she was elected vice president, information technology, of Ameren Services, and in 2013, she was also elected chief information officer of Ameren Services. In September 2015, she was elected senior vice president and chief information officer of Ameren Services. In February 2019, she was elected senior vice president, customer experience, at Ameren Illinois and relinquished her position at Ameren Services.
Mark C. Lindgren53 Senior Vice President, Corporate Communications, and Chief Human Resources Officer (Ameren Services)
Lindgren joined Ameren Services in 1998. In 2009, he was elected vice president, human resources, of Ameren Services, and in 2012, he was also elected chief human resources officer of Ameren Services. In September 2015, he was elected senior vice president, corporate communications, and chief human resources officer of Ameren Services.
Richard J. Mark65 Chairman and President (Ameren Illinois)
Mark joined Ameren Services in 2002 as vice president, customer service. In 2003, he was elected vice president, governmental policy and consumer affairs, of Ameren Services. In 2005, he was elected senior vice president, customer operations, of Ameren Missouri. In 2007, he relinquished his position at Ameren Services. In 2012, he relinquished his position at Ameren Missouri and was elected chairman and president of Ameren Illinois.
Martin J. Lyons, Jr.54 Chairman and President (Ameren Missouri)
Lyons joined Ameren Services in 2001. In 2008, he was elected senior vice president and chief accounting officer of the Ameren Companies. In 2009, he was also elected chief financial officer of the Ameren Companies. In 2013, he was elected executive vice president and chief financial officer of the Ameren Companies, and relinquished his duties as chief accounting officer. In March 2016, he was elected chairman and president of Ameren Services. In December 2019, he was elected chairman and president of Ameren Missouri and relinquished his position as executive vice president and chief financial officer of the Ameren Companies and his positions at Ameren Services.
Shawn E. Schukar59 Chairman and President (ATXI)
Schukar joined a predecessor company of Ameren Illinois in 1984. In 2005, he was elected vice president, commercial RTO operations, of Ameren Services. In 2013, he was elected senior vice president, transmission operations, construction and project management, of ATXI. In May 2017, he was elected chairman and president of ATXI.
Officers are generally elected or appointed annually by the respective board of directors of each company, following the election of board members at the annual meetings of shareholders. No special arrangement or understanding exists between any of the above-named executive officers and the Ameren Companies nor, to our knowledge, with any other person or persons pursuant to which any executive officer was selected as an officer. There are no family relationships among the executive officers or between any executive officers and any directors of the Ameren Companies. Except as noted, the above-named executive officers have been employed by an Ameren company for more than five years in executive or management positions.
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PART II
ITEM 5.MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASE OF EQUITY SECURITIES
Ameren’s common stock is listed on the NYSE (ticker symbol: AEE). Ameren common shareholders of record totaled 42,072 on January 29, 2021. There is no trading market for the common stock of Ameren Missouri and Ameren Illinois. Ameren holds all outstanding common stock of Ameren Missouri and Ameren Illinois.
Purchases of Equity Securities
Ameren Corporation, Ameren Missouri, and Ameren Illinois did not purchase any equity securities reportable under Item 703 of Regulation S-K during the period from October 1, 2020, to December 31, 2020.
Performance Graph
The following graph shows Ameren’s cumulative TSR during the five years ended December 31, 2020. The graph also shows the cumulative total returns of the S&P 500 Index, S&P 500 Utility Index, and the Philadelphia Utility Index. The S&P 500 Utility Index and the Philadelphia Utility Index are market capitalization-weighted indices of U.S. public utility companies. The comparison assumes that $100 was invested on December 31, 2015, in Ameren common stock and in each of the indices shown and that all of the dividends were reinvested.
Comparison of Five-Year Cumulative Return
aee-20201231_g5.jpg
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December 31,201520162017201820192020
Ameren (AEE)$100.00 $125.66 $145.72 $166.09 $200.67 $209.23 
S&P 500 Index100.00 111.96 136.40 130.43 171.50 203.05 
S&P 500 Utility Index100.00 116.29 130.37 135.73 171.50 172.32 
Philadelphia Utility Index100.00 117.40 132.45 137.11 173.88 178.61 
Ameren management cautions that the stock price performance shown above should not be considered indicative of future stock price performance.
ITEM 6.SELECTED FINANCIAL DATA
Ameren has early adopted the SEC’s Disclosure Modernization Final Rule, effective February 10, 2021, for Item 301 of Regulation S-K. As such, Item 6 – Selected Financial Data has not been provided.
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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.
Below is a summary description of Ameren’s principal subsidiaries – Ameren Missouri, Ameren Illinois, and ATXI. Ameren also has other subsidiaries that conduct other activities, such as providing shared services. A more detailed description can be found in Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
Ameren Missouri operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri.
Ameren Illinois operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois.
ATXI operates a FERC rate-regulated electric transmission business in the MISO.
Ameren has four segments: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. The Ameren Missouri segment includes all of the operations of Ameren Missouri. Ameren Illinois Electric Distribution consists of the electric distribution business of Ameren Illinois. Ameren Illinois Natural Gas consists of the natural gas business of Ameren Illinois. Ameren Transmission primarily consists of the aggregated electric transmission businesses of Ameren Illinois and ATXI. See Note 16 – Segment Information under Part II, Item 8, of this report for further discussion of Ameren’s and Ameren Illinois’ segments.
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 13 – Related-party Transactions under Part II, Item 8, of this report. Ameren Missouri and Ameren Illinois have no subsidiaries. All tabular and graphical dollar amounts are in millions, unless otherwise indicated.
The following discussion should be read in conjunction with the financial statements contained in this 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. Discussion regarding our financial condition and results of operations for the year ended December 31, 2018, including comparisons with the year ended December 31, 2019, is included in Item 7 of our Form 10-K for the year ended December 31, 2019, filed with the SEC on February 28, 2020.
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.
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OVERVIEW
Our core strategy is driven by the following three pillars:
Investing in and operating our utilities in a manner consistent with existing regulatory frameworksEnhancing regulatory frameworks and advocating for responsible energy and economic policiesCreating and capitalizing on opportunities for investment for the benefit of our customers and shareholders
We seek to earn competitive returns on investments in our businesses. Accordingly, we remain focused on disciplined cost management and strategic capital allocation. We align our overall spending, both operating and capital, with economic conditions and with the frameworks established by our regulators, to create and capitalize on investment opportunities for the benefit of our customers and shareholders. We focus on minimizing the gap between allowed and earned ROEs and allocating capital resources to business opportunities that we expect will provide the most benefit to our customers and offer the most attractive risk-adjusted return potential.We seek to partner with our stakeholders, including our customers, regulators, federal and state legislators, and RTOs, to enhance our regulatory frameworks and advocate for responsible energy and economic policies for the benefit of our customers and shareholders. We believe constructive regulatory frameworks for investment exist at all of our business segments. Accordingly, we expect to earn competitive returns on investments in our businesses and realize timely recovery of our costs in the coming years with the benefits accruing to both customers and shareholders.We seek to make prudent investments that benefit our customers. The goal of these investments is to maintain and enhance the reliability of our services, develop cleaner sources of energy, create economic development opportunities in our region, and provide customers with more options and greater control over their energy usage, among other things. By prudently investing in our businesses, we believe that we deliver superior value to both customers and shareholders.
Customer Rates, (¢/KWH)(e)
aee-20201231_g6.gif
Rate Base ($ in billions)(a)
Constructive Regulatory Frameworks(c)
TSR 2015-2020(f)
aee-20201231_g7.gif
SegmentRegulatory Framework
aee-20201231_g8.gif
Ameren
Transmission
Formula ratemaking
Allowed ROE is 10.52%
Ameren Illinois
Natural Gas
Future test year ratemaking and QIP, PGA, VBA
Allowed ROE is 9.67%
Ameren Illinois
Electric Distribution
Formula ratemaking
Allowed ROE is 30-year U.S. Treasury + 5.8%
Ameren
Missouri
Historical test year ratemaking and
PISA, RESRAM, FAC, MEEIA
Allowed ROE is 9.4% - 9.8%(d)
(a)    Reflects year-end rate base except for Ameren Transmission, which is average rate base.
(b)    Compound annual growth rate.
(c)    As of January 2021.
(d)    Allowed ROE applicable to electric service.
(e)    Average residential electric prices. Source: Edison Electric Institute, “Typical Bills and Average Rates Report” for the 12 months ended June 30, 2020.
(f)    Ameren management cautions that the stock price performance shown above should not be considered indicative of future stock price performance.
Key announcements, updates, and regulatory outcomes
The COVID-19 pandemic continues to be a constantly evolving situation. In 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. 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 protect the safety of our employees and customers. 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 order to work more effectively in certain areas, a portion of our workforce returned to our work locations in early June 2020 under a phased approach, and, as of the date of this filing, 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 fewer restrictions on social activities and nonessential businesses beginning to reopen. However, certain
35

restrictions remain in place that limit individual activities and the operation of nonessential businesses. Additional restrictions may be imposed in the future. We continue to assess the impacts the pandemic is having on our businesses, including impacts on electric and natural gas sales volumes, liquidity, and bad debt expense, among other things. For further discussion of these and other matters, see Note 1 – Summary of Significant Accounting Policies and Note 2 – Rate and Regulatory Matters under Part II, Item 8, 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’ suspensions and reinstatement of customer disconnection activities and late fee charges for nonpayment, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
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 were deferred as a regulatory asset. Amortization of those expenses began in January 2021, and will be amortized until the completion of the next refueling and 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 has begun to replace certain key components of the generator in order to return the energy center to service. Ameren Missouri expects generator repairs of $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 late June or early July 2021. See Note 9 – Callaway Energy Center under Part II, Item 8, of this report for additional information.
In March 2020, the MoPSC issued an order in 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 reflected 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, which is subject to review by the MoPSC for 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. It also includes expanding renewable sources by adding 3,100 MWs of renewable generation by the end of 2030 and a total of 5,400 MWs of renewable generation by 2040. These amounts include the 700 MWs of wind generation projects discussed below, which will support Ameren Missouri’s compliance with the state of Missouri’s requirement of achieving 15% of native load sales from renewable energy sources 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 future 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).
In October 2020, Ameren Missouri filed requests with the MoPSC for accounting authority orders related to its electric and natural gas services. If issued as requested, the orders would allow Ameren Missouri to accumulate certain costs incurred related to the COVID-19 pandemic, including bad debt write-offs, net of cost savings, as well as forgone customer late fee and reconnection fee revenues, for a specified time period, for potential recovery in future electric and natural gas service regulatory rate reviews. Costs incurred, net of savings, and forgone customer late fee and reconnection fee revenues related to the COVID-19 pandemic from March 2020 through December 2020 were immaterial. The MoPSC is under no deadline to issue orders, and Ameren Missouri cannot predict the ultimate outcome of these regulatory proceedings.
In December 2020, Ameren Missouri acquired a 400-MW wind generation project located in northeastern Missouri for approximately $615 million, and placed the assets in service as the High Prairie Renewable Energy Center. In January 2021, Ameren Missouri acquired an up-to 300-MW wind generation project located in northwestern Missouri. At the date of this filing, Ameren Missouri placed 120 MWs in service as the Atchison Renewable Energy Center, with a purchase price of approximately $200 million. There have been changes to the schedule
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for this project, particularly as a result of component delivery delays. Ameren Missouri expects approximately 150 MWs of the up-to 300-MW project to be in service by the end of the first quarter of 2021, and the remaining portion to be in service later in 2021.
In February 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 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 $8.4 billion over the five-year period from 2021 through 2025, with expenditures largely recoverable under the PISA and the RESRAM. The planned investments in 2024 and 2025 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA through December 2028.
In December 2020, the ICC issued an order in Ameren Illinois’ annual update filing that approved a $49 million decrease in Ameren Illinois’ electric distribution service rates beginning in January 2021. This order reflected a decrease to the annual formula rate based on 2019 actual costs, a decrease to include the 2019 revenue requirement reconciliation adjustment, and a decrease for the conclusion of the 2018 revenue requirement reconciliation adjustment, which was fully collected from customers in 2020, consistent with the ICC’s December 2019 annual update filing order. It also reflected an increase based on expected net plant additions for 2020.
In January 2021, the ICC issued an order in Ameren Illinois’ February 2020 natural gas delivery service regulatory rate review, which resulted in an increase to its annual revenues for natural gas delivery service of $76 million, based on a 9.67% allowed ROE, a capital structure composed of 52% common equity, and a rate base of $2.1 billion. The new rates became effective in January 2021. As a result of this order, the rate base under the QIP was reset to zero. Ameren Illinois used a 2021 future test year in this proceeding.
In October 2020, Ameren’s board of directors increased the quarterly common stock dividend to 51.5 cents per share. In February 2021, the board increased the quarterly common stock dividend to 55 cents per share, resulting in an annualized equivalent dividend rate of $2.20 per share.
Earnings
Net income attributable to Ameren common shareholders was $871 million, or $3.50 per diluted share, for 2020, and $828 million, or $3.35 per diluted share, for 2019. Net income was favorably affected in 2020, compared with 2019, by the results of Ameren Missouri’s March 2020 electric rate order; infrastructure investments that drove higher earnings at Ameren Transmission, Ameren Illinois Electric Distribution, and Ameren Illinois Natural Gas; and increased Ameren Transmission earnings resulting from the May 2020 FERC order addressing the allowed base ROE. Earnings in 2020, compared with 2019, were also favorably affected by lower other operations and maintenance expenses not subject to riders or trackers, primarily due to the absence in 2020 of expenses related to the Callaway Energy Center’s 2019 scheduled refueling and maintenance outage; and by lower electric system infrastructure maintenance expenses as a result of decreased system load, disciplined cost management, and the deferral of projects to future periods. Net income was unfavorably affected in 2020, compared with 2019, by decreased electric retail sales at Ameren Missouri largely due to the COVID-19 pandemic, and due to milder summer and warmer winter temperatures in 2020; higher net financing costs at Ameren Missouri and Ameren (parent); lower revenues due to reduced MEEIA performance incentives at Ameren Missouri; and a lower recognized ROE at Ameren Illinois Electric Distribution.
Liquidity
At December 31, 2020, Ameren, on a consolidated basis, had available liquidity in the form of cash on hand and amounts available under the Credit Agreements of $1.9 billion.
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Ameren remains focused on strategic capital allocation. The following chart presents 2020 capital expenditures by segment and the midpoint of projected cumulative capital expenditures for 2021 through 2025 by segment:
2020 Capital Expenditures by Segment
(Total Ameren – $3.2 billion)
(in billions)
Midpoint of 2021 – 2025 Projected Capital
Expenditures by Segment (Total Ameren – $17.1 billion)
(in billions)
aee-20201231_g9.jpgaee-20201231_g10.jpg
Ameren Missouri(a)
Ameren Illinois Natural Gas
Ameren Illinois Electric DistributionAmeren Transmission
(a)Ameren Missouri capital expenditures include $564 million for the acquisition of the High Prairie Renewable Energy Center for the year ended December 31, 2020.
For 2021 through 2025, Ameren’s cumulative capital expenditures are projected to range from $16.4 billion to $17.8 billion. The following table presents the range of projected spending by segment:
Range (in billions)
Ameren Missouri(a)
$8.7 $9.3 
Ameren Illinois Electric Distribution2.6 2.8 
Ameren Illinois Natural Gas1.7 1.8 
Ameren Transmission3.5 3.8 
Ameren(a)
$16.4 $17.8 
(a)Amounts include 300 MWs of wind generation at the Atchison Renewable Energy Center, but exclude incremental renewable generation investment opportunities of 1,200 MWs by 2025, which are included in Ameren Missouri’s 2020 IRP.
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 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 II, Item 8, of this report for additional information regarding Ameren Missouri’s, Ameren Illinois’, and ATXI’s regulatory frameworks.
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
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fee charges for nonpayment in mid-March 2020 and began resuming these activities, with certain exceptions, in the third quarter of 2020. For additional information on Ameren Missouri’s and Ameren Illinois’ reinstatement of customer disconnection and late fee charges for non-payment, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report. With respect to 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 provided for the recovery of bad debt expense in 2020, which reverted to the recovery of bad debt write-offs, net of any subsequent recoveries, in 2021. Ameren Missouri does not have a bad debt rider or tracker, and thus its earnings are exposed to increases in bad debt expense, absent regulatory relief. However, Ameren Missouri does not expect a material impact to earnings from increases in bad debt expense. In October 2020, Ameren Missouri filed requests with the MoPSC for accounting authority orders related to certain impacts resulting from the COVID-19 pandemic. If issued as requested, the orders would allow Ameren Missouri to accumulate certain costs incurred related to the COVID-19 pandemic, including bad debt write-offs, net of cost savings, as well as forgone customer late fee and reconnection fee revenues, for a specified time period, for potential recovery in future electric and natural gas service regulatory rate reviews. As of December 31, 2020, accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement represented 29%, 22%, and 35%, or $133 million, $40 million, and $93 million, of Ameren’s, Ameren Missouri’s, and Ameren Illinois’ customer trade receivables before allowance for doubtful accounts, respectively. As of December 31, 2019, these percentages were 18%, 18%, and 20%, or $75 million, $30 million, and $45 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 2020, compared to 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. For 2021, Ameren Missouri expects gradual improvement in economic activities to result in increased electric sales volumes, excluding the estimated effects of weather and customer energy-efficiency programs. The table below provides the increases and (decreases) in Ameren Missouri electric sales volumes by customer class for 2020, compared to 2019, and the estimated increases and (decreases) for 2021, compared to 2020, excluding the estimated effects of weather and customer energy-efficiency programs:
2020 versus 2019Estimated 2021 versus 2020
Ameren Missouri Customer Class
Residential3.0 %%
Commercial(7.0)%%
Industrial(2.1)%%
Total(2.2)%2 %
Assuming a ratable change in Ameren Missouri’s electric sales volumes by month, a 1% change for the calendar year 2021 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.
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 years ended December 31, 2020 and 2019:
20202019
Net income attributable to Ameren common shareholders$871 $828 
Earnings per common share – diluted3.50 3.35 
Net income attributable to Ameren common shareholders in 2020 increased $43 million, or $0.15 per diluted share, from 2019. The increase was due to net income increases of $31 million, $15 million, and $10 million, at Ameren Transmission, Ameren Illinois Natural Gas, and Ameren Missouri, respectively. The increases in net income were partially offset by an increase in the net loss for activity not reported as part of a segment, primarily at Ameren (parent) of $10 million and a decrease in net income at Ameren Illinois Electric Distribution of $3 million.
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Earnings per share in 2020, compared with 2019, were favorably affected by:
lower base level of expenses, 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 II, Item 8, of this report (23 cents per share);
increased rate base investments, which increased earnings at Ameren Transmission and Ameren Illinois Electric Distribution, including energy-efficiency investments at Ameren Illinois (14 cents per share);
decreased Callaway Energy Center scheduled refueling and maintenance expenses, due to the treatment of the 2019 scheduled refueling and maintenance outage costs at the Callaway Energy Center, which were expensed as incurred, as compared with the deferral of expenses for the fall 2020 scheduled refueling and maintenance outage pursuant to the February 2020 MoPSC order, which decreased other operations and maintenance expenses (10 cents per share);
decreased system load, disciplined cost management, the deferral of projects to future periods, and decreased other costs not recoverable under riders or trackers, excluding decreased costs associated with the Callaway Energy Center’s scheduled refueling and maintenance outage, which decreased other operations and maintenance expenses (10 cents per share);
the result of the May 2020 FERC order addressing the allowed base ROE for FERC regulated transmission rate base under the MISO tariff, which increased Ameren Transmission earnings (4 cents per share); and
increased investments in qualifying infrastructure recovered under the QIP, which increased earnings at Ameren Illinois Natural Gas (4 cents per share).
Earnings per share in 2020, compared with 2019, were unfavorably affected by:
lower MEEIA performance incentives recognized at Ameren Missouri (9 cents per share);
increased net financing costs at Ameren (parent) and Ameren Missouri, primarily due to higher long-term debt balances (9 cents per share);
decreased electric retail sales, excluding the estimated effects of weather, at Ameren Missouri, largely due to the COVID-19 pandemic, which decreased sales volumes and demand charge revenue from commercial and industrial customers, partially offset by increased sales volumes to higher margin residential customers (8 cents per share);
the impact of weather on electric retail sales at Ameren Missouri, primarily resulting from milder summer and warmer winter temperatures experienced in 2020 (estimated at 7 cents per share);
a lower recognized ROE at Ameren Illinois Electric Distribution under performance-based formula ratemaking driven by lower annual average monthly yields on 30-year United States Treasury bonds (7 cents per share);
increased charitable donations, primarily at Ameren Missouri, which included an increase of 2 cents per share pursuant to its March 2020 electric rate order (4 cents per share);
decreased electric margins from transmission services, and customer late fees and reconnection fees at Ameren Missouri, largely due to the COVID-19 pandemic (3 cents per share);
decreased income tax benefits at Ameren (parent) related to stock-based compensation (3 cents per share);
increased depreciation and amortization expenses not recoverable under riders or trackers at Ameren Missouri, primarily due to additional property, plant, and equipment investments (2 cents per share); and
increased weighted-average basic common shares outstanding (2 cents per share).
The cents per share information presented is based on the weighted-average basic shares outstanding in 2019 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 2020 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, Taxes Other Than Income Taxes, Other Income, Net, Interest Charges, and Income Taxes, see the major headings below.
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Below is Ameren’s table of income statement components by segment for the years ended December 31, 2020 and 2019:
2020Ameren MissouriAmeren
Illinois
Electric
Distribution
Ameren
Illinois
Natural Gas
Ameren TransmissionOther /
Intersegment
Eliminations
Ameren
Electric margins$2,323 $1,091 $ $523 $(29)$3,908 
Natural gas margins82  531  (2)611 
Other operations and maintenance expenses(886)(506)(221)(57)9 (1,661)
Depreciation and amortization(604)(288)(81)(98)(4)(1,075)
Taxes other than income taxes(328)(72)(65)(8)(10)(483)
Other income, net76 33 13 13 16 151 
Interest charges(190)(72)(41)(78)(38)(419)
Income (taxes) benefit(34)(42)(36)(78)35 (155)
Net income (loss)439 144 100 217 (23)877 
Noncontrolling interests – preferred stock dividends(3)(1)(1)(1) (6)
Net income (loss) attributable to Ameren common shareholders$436 $143 $99 $216 $(23)$871 
2019
Electric margins$2,381 $1,074 $— $464 $(29)$3,890 
Natural gas margins81 — 519 — (2)598 
Other operations and maintenance expenses(960)(498)(233)(60)(1,745)
Depreciation and amortization(556)(273)(78)(84)(4)(995)
Taxes other than income taxes(329)(73)(67)(4)(8)(481)
Other income, net58 33 12 19 130 
Interest charges(178)(71)(38)(74)(20)(381)
Income (taxes) benefit(68)(45)(30)(64)25 (182)
Net income (loss)429 147 85 186 (13)834 
Noncontrolling interests – preferred stock dividends(3)(1)(1)(1)— (6)
Net income (loss) attributable to Ameren common shareholders$426 $146 $84 $185 $(13)$828 
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Below is Ameren Illinois’ table of income statement components by segment for the years ended December 31, 2020 and 2019:
2020Ameren Illinois Electric DistributionAmeren Illinois Natural GasAmeren Illinois TransmissionAmeren Illinois
Electric margins$1,091 $ $329 $1,420 
Natural gas margins 531  531 
Other operations and maintenance expenses(506)(221)(48)(775)
Depreciation and amortization(288)(81)(65)(434)
Taxes other than income taxes(72)(65)(3)(140)
Other income, net33 13 13 59 
Interest charges(72)(41)(42)(155)
Income taxes(42)(36)(46)(124)
Net income144 100 138 382 
Preferred stock dividends(1)(1)(1)(3)
Net income attributable to common shareholder$143 $99 $137 $379 
2019
Electric margins$1,074 $— $288 $1,362 
Natural gas margins— 519 — 519 
Other operations and maintenance expenses(498)(233)(51)(782)
Depreciation and amortization(273)(78)(55)(406)
Taxes other than income taxes(73)(67)(3)(143)
Other income, net33 12 53 
Interest charges(71)(38)(38)(147)
Income taxes(45)(30)(35)(110)
Net income147 85 114 346 
Preferred stock dividends(1)(1)(1)(3)
Net income attributable to common shareholder$146 $84 $113 $343 
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 as a complement to 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.
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Electric Margins
Total by Segment(a)
Increase (Decrease) by Segment
(Overall Ameren Increase of $18 Million)
aee-20201231_g11.jpgaee-20201231_g12.jpg
(a)Includes other/intersegment eliminations of $(29) million and $(29) million in 2020 and 2019, respectively.
Ameren MissouriAmeren Illinois Electric DistributionAmeren TransmissionOther/Intersegment Eliminations
Natural Gas Margins
Total by Segment(a)
Increase (Decrease) by Segment
(Overall Ameren Increase of $13 Million)
aee-20201231_g13.jpgaee-20201231_g14.jpg
(a)Includes other/intersegment eliminations of $(2) million and $(2) million in 2020 and 2019, respectively.
Ameren MissouriAmeren Illinois Natural Gas
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The following table presents the favorable (unfavorable) variations by segment for electric and natural gas margins in 2020, compared with 2019:
Electric and Natural Gas Margins
2020 versus 2019Ameren
Missouri
Ameren Illinois
Electric Distribution
Ameren Illinois
Natural Gas
Ameren
Transmission(a)
Other /
Intersegment
Eliminations
Ameren
Electric revenue change:
Effect of weather (estimate)(b)
$(30)$— $— $— $— $(30)
Base rates (estimate)(c)
(58)(3)— 59 — (2)
Sales volumes and changes in customer usage patterns (excluding the estimated effects of weather and MEEIA)(36)— — — — (36)
Customer demand charges(7)— — — — (7)
MEEIA performance incentives(31)— — — — (31)
Off-system sales47 — — — — 47 
Customer late fees and reconnection fees(4)— — — — (4)
Energy-efficiency program investments— 12 — — — 12 
Transmission service revenues(3)— — — — (3)
Other(1)— — 
Cost recovery mechanisms – offset in fuel and purchased power(d)
(4)(23)— — — (27)
Other cost recovery mechanisms(e)
— — — 
Total electric revenue change$(125)$(6)$— $59 $$(70)
Fuel and purchased power change:
Energy costs (excluding the estimated effect of weather)$(34)$— $— $— $— $(34)
Effect of weather (estimate)(b)
— — — — 
Effect of lower net energy costs included in base rates92 — — — — 92 
Transmission service charges(3)— — — — (3)
Other— — — — (2)(2)
Cost recovery mechanisms – offset in electric revenue(d)
23 — — — 27 
Total fuel and purchased power change$67 $23 $— $— $(2)$88 
Net change in electric margins$(58)$17 $ $59 $ $18 
Natural gas revenue change:
Effect of weather (estimate)(b)
$(5)$— $— $— $— $(5)
QIP— — 23 — — 23 
Software licensing agreement— — (5)— — (5)
Other— (1)— — 
Cost recovery mechanisms – offset in natural gas purchased for resale(d)
(6)— (49)— — (55)
Other cost recovery mechanisms(e)
(1)— (5)— — (6)
Total natural gas revenue change$(9)$— $(37)$— $— $(46)
Natural gas purchased for resale change:
Effect of weather (estimate)(b)
$$— $— $— $— $
Cost recovery mechanisms – offset in natural gas revenue(d)
— 49 — — 55 
Total natural gas purchased for resale change$10 $— $49 $— $— $59 
Net change in natural gas margins$1 $ $12 $ $ $13 
(a)Includes an increase in transmission electric margins of $41 million in 2020, compared with 2019, at Ameren Illinois.
(b)Represents the estimated variation resulting primarily from changes in cooling and heating degree days on electric and natural gas demand compared with the prior year; 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 $43 million for the recovery of lost electric margins in 2020, compared with 2019, 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 of the statement of income. These items have no overall impact on earnings.
Ameren
Ameren’s electric margins increased $18 million, or less than 1%, in 2020, compared with 2019, primarily because of increased margins at Ameren Transmission and Ameren Illinois Electric Distribution, partially offset by decreased margins at Ameren Missouri, as discussed
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below. Ameren’s natural gas margins increased $13 million, or 2%, between years primarily because of increased margins at Ameren Illinois Natural Gas, as discussed below.
Ameren Transmission
Ameren Transmission’s electric margins increased $59 million, or 13%, in 2020, compared with 2019. Margins were favorably affected by increased capital investment, as evidenced by a 13% increase in the 13-month average rate base used to calculate the revenue requirement between years, and an increase in the allowed ROE resulting from the May 2020 FERC order. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for additional information regarding the May 2020 FERC order.
Ameren Missouri
Ameren Missouri’s electric margins decreased $58 million, or 2%, in 2020, compared with 2019. Ameren Missouri’s natural gas margins were comparable between years.
The following items had an unfavorable effect on Ameren Missouri’s electric margins in 2020, compared with 2019:
The aggregate effect of changes in customer usage, excluding the estimated effects of weather and the MEEIA customer energy-efficiency programs, decreased electric revenues an estimated $43 million. The decrease was primarily due to a reduction in sales volumes (-$44 million) and decreased revenues from customer demand charges (-$7 million), 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 a favorable $8 million. 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 $31 million. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for information regarding the MEEIA performance incentives.
Summer temperatures were milder as cooling degree days decreased 7%, and winter temperatures were warmer as heating degree days decreased 9%. The aggregate effect of weather decreased margins by an estimated $22 million. The change in margins due to weather is the sum of the “Effect of weather (estimate)” on electric revenues (-$30 million) and the “Effect of weather (estimate)” on fuel and purchased power (+$8 million) in the table above.
Additional investments made by other transmission entities contributed to increased transmission service charges of $3 million and lower system load contributed to decreased transmission service revenues of $3 million.
In response to the COVID-19 pandemic, suspensions of customer late fees and reconnection fees resulted in a $4 million decrease in revenue. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, 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 in 2020, compared with 2019:
The March 2020 MoPSC electric rate order, with new rates effective April 1, 2020, increased margins $34 million. The change in electric base rates is the sum of the “Change in base rates (estimate)” (-$58 million) and the “Effect of lower net energy costs included in base rates” (+$92 million) in the table above.
Decreased sales volumes, which were affected by the COVID-19 pandemic, resulted in lower net energy costs and increased margins $13 million. The change in net energy costs is the sum of the effect of the revenue change in “Off-system sales” (+$47 million) and the “Effect of the change in energy costs” (-$34 million) in the table above.
Ameren Illinois
Ameren Illinois’ electric margins increased $58 million, or 4%, in 2020, compared with 2019, driven by increased margins at Ameren Illinois Transmission (+$41 million) and Ameren Illinois Electric Distribution (+$17 million). Ameren Illinois Natural Gas’ margins increased $12 million, or 2%, between years.
Ameren Illinois Electric Distribution
Ameren Illinois Electric Distribution’s margins increased $17 million, or 2%, in 2020, compared with 2019. Revenues increased $12 million due to increased energy-efficiency program investments under performance-based formula ratemaking. Margins decreased due to a lower recognized ROE (-$17 million), as evidenced by a decrease of 102 basis points in the annual average of the monthly yields of the 30-year United States Treasury bonds, partially offset by increased capital investment (+$8 million), as evidenced by a 6% increase in year-end rate base, and higher recoverable non-purchased power expenses (+$6 million). The sum of these base rate changes collectively decreased margins $3 million in 2020, compared with 2019.
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Ameren Illinois Natural Gas
Ameren Illinois Natural Gas’ margins increased $12 million, or 2%, in 2020, compared with 2019. Revenues from increased QIP recoveries due to additional investment in qualified natural gas infrastructure increased margins $23 million. The absence of revenues from a software licensing agreement with Ameren Missouri decreased margins $5 million. See the Software Licensing Agreement section within Note 13 – Related-party Transactions under Part II, Item 8, of this report for information regarding this transaction.
Ameren Illinois Transmission
Ameren Illinois Transmission’s electric margins increased $41 million, or 14%, in 2020, compared with 2019. Margins were favorably affected by increased capital investment, as evidenced by a 19% increase in the 13-month average rate base between years, and an increase in the allowed ROE resulting from the May 2020 FERC order. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for additional information regarding the May 2020 FERC order.
Other Operations and Maintenance Expenses
Total by Segment(a)
Increase (Decrease) by Segment
(Overall Ameren Decrease of $84 Million)
aee-20201231_g15.jpgaee-20201231_g16.jpg
(a)Includes $57 million and $60 million at Ameren Transmission in 2020 and 2019, respectively, and other/intersegment eliminations of $(9) million and $(6) million in 2020 and 2019, respectively.
Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission
Ameren
Other operations and maintenance expenses were $84 million lower in 2020, compared with 2019. In addition to changes by segments discussed below, other operations and maintenance expenses decreased $3 million in 2020 for activity not reported as part of a segment, as reflected in “Other/Intersegment Eliminations” above, primarily because of decreased costs for support services.
Ameren Transmission
Other operations and maintenance expenses were $3 million lower in 2020, compared with 2019, primarily due to a decrease in transmission expenditures at Ameren Illinois Transmission resulting from disciplined cost management.
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Ameren Missouri
The $74 million decrease in other operations and maintenance expenses in 2020, compared with 2019, was primarily due to the following items:
Callaway Energy Center refueling operations and maintenance costs decreased $34 million, due to the treatment of the 2019 scheduled refueling and maintenance outage costs at the Callaway Energy Center, which were expensed as incurred, as compared with the deferral of expenses for the fall 2020 scheduled refueling and maintenance outage pursuant to the February 2020 MoPSC order.
Energy center maintenance costs, other than those associated with the Callaway refueling and maintenance outage, decreased $29 million, primarily because of 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 $15 million, primarily resulting from less maintenance due to recent capital improvements and disciplined cost management.
Amortization of solar rebate costs incurred prior to the RESRAM decreased $13 million as a result of the March 2020 MoPSC electric rate order.
The following items partially offset the above decreases in other operations and maintenance expenses between years:
Solar rebate costs recoverable under the RESRAM increased $9 million, primarily because of the amortization of previously-deferred rebates included in customer rates in 2020.
Bad debt costs increased $7 million, primarily because of an increase in accounts receivable balances that were past due or that were a part of a deferred payment arrangement, which increased primarily due to the COVID-19 pandemic.
Technology-related expenditures increased $5 million, primarily because of costs associated with the implementation of cloud computing technology.
Ameren Illinois
Other operations and maintenance expenses were $7 million lower at Ameren Illinois in 2020, compared with 2019, as discussed below.
Ameren Illinois Electric Distribution
The $8 million increase in other operations and maintenance expenses in 2020, compared with 2019, was primarily due to the following items:
Amortization of energy-efficiency program investments under performance-based formula ratemaking increased $8 million.
Labor and benefit costs increased $8 million, primarily because of higher pension costs.
The following items partially offset the above increases in other operations and maintenance expenses between years:
Meter reading costs decreased $4 million, as deployment of automated smart meters was substantially completed in 2019.
Distribution expenditures decreased $3 million, primarily because of lower storm costs.
Ameren Illinois Natural Gas
The $12 million decrease in other operations and maintenance expenses in 2020, compared with 2019, was primarily due to a $4 million reduction in costs recovered through riders and a $4 million reduction in meter reading costs, as deployment of automated smart meters was substantially completed in 2019. Other operations and maintenance expenses also decreased because of a $4 million reduction in distribution expenditures due to disciplined cost management.
Ameren Illinois Transmission
The $3 million decrease in other operations and maintenance expenses in 2020, compared with 2019, was primarily due to a decrease in transmission expenditures resulting from disciplined cost management.
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Depreciation and Amortization
Total by Segment(a)
Increase (Decrease) by Segment
(Overall Ameren Increase of $80 Million)
aee-20201231_g17.jpgaee-20201231_g18.jpg
(a)Includes other/intersegment eliminations of $4 million and $4 million in 2020 and 2019, respectively.
Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission

The $80 million, $48 million, and $28 million increase in depreciation and amortization expenses in 2020, compared with 2019, at Ameren, Ameren Missouri, and Ameren Illinois, respectively, was primarily due to additional property, plant, and equipment across their respective segments. Ameren’s and Ameren Missouri’s depreciation and amortization expenses reflected a deferral to a regulatory asset of depreciation and amortization expenses pursuant to the PISA. The PISA deferral of depreciation and amortization expenses was $27 million and $24 million in 2020 and 2019, respectively.
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Taxes Other Than Income Taxes
Total by Segment(a)
Increase (Decrease) by Segment
(Overall Ameren Increase of $2 Million)
aee-20201231_g19.jpgaee-20201231_g20.jpg
(a)Includes $8 million and $4 million at Ameren Transmission in 2020 and 2019, respectively, and other/intersegment eliminations of $10 million and $8 million in 2020 and 2019, respectively.
Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission
Taxes other than income taxes were comparable at Ameren between 2020 and 2019. Excise taxes decreased $8 million and $4 million at Ameren Missouri and Ameren Illinois Natural Gas, respectively, because of reduced sales. These decreases were mostly offset by increases of $7 million and $4 million in property taxes at Ameren Missouri and Ameren Transmission, respectively, primarily due to higher assessed property values. See Excise Taxes in Note 15 – Supplemental Information under Part II, Item 8, of this report for additional information.
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Other Income, Net
Total by SegmentIncrease (Decrease) by Segment
(Overall Ameren Increase of $21 Million)
aee-20201231_g21.jpgaee-20201231_g22.jpg
Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission
Other income, net, increased $21 million at Ameren in 2020, compared with 2019. An increase of $28 million in the non-service cost components of net periodic benefit income at Ameren Missouri was partially offset by a $9 million increase in donations, primarily due to charitable donations made pursuant to the March 2020 MoPSC electric rate order. Additionally, other income, net, increased because of a $4 million increase in the equity portion of allowance for funds used during construction at Ameren Transmission. See Note 6 – Other Income, Net under Part II, Item 8, of this report for additional information. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for additional information regarding Ameren Missouri’s March 2020 electric rate order. See Note 10 – Retirement Benefits under Part II, Item 8, of this report for more information on the non-service cost components of net periodic benefit income.
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Interest Charges
Total by SegmentIncrease (Decrease) by Segment
(Overall Ameren Increase of $38 Million)
aee-20201231_g23.jpgaee-20201231_g24.jpg
Ameren MissouriAmeren Illinois Natural GasOther/Intersegment Eliminations
Ameren Illinois Electric DistributionAmeren Transmission
Interest charges increased $38 million in 2020, compared with 2019, primarily because of a long-term debt issuance at Ameren (parent) in April 2020, which increased interest charges by $21 million, which was partially offset by a decrease associated with the reduction in average short-term debt outstanding, as proceeds from the long-term debt issuance were used to repay outstanding short-term debt. Interest charges also increased due to long-term debt issuances at Ameren Missouri in March 2020 and October 2020, partially offset by lower average interest rates applicable to long-term debt, which increased interest charges by $14 million. Interest charges at Ameren Missouri reflected a deferral to a regulatory asset of interest charges pursuant to PISA. The PISA deferral of interest charges was $12 million and $15 million in 2020 and 2019, respectively.

Income Taxes
The following table presents effective income tax rates for the years ended December 31, 2020 and 2019:
20202019
Ameren15%18%
Ameren Missouri7%14%
Ameren Illinois24%24%
Ameren Illinois Electric Distribution22%23%
Ameren Illinois Natural Gas26%26%
Ameren Illinois Transmission25%24%
Ameren Transmission26%25%
See Note 12 – Income Taxes under Part II, Item 8, of this report for information regarding reconciliations of effective income tax rates for Ameren, Ameren Missouri, and Ameren Illinois. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for information regarding reductions in revenues related to the lower federal statutory corporate income tax rate enacted under the TCJA and the return of excess deferred income taxes to customers.

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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 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 these cash flow requirements, 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 2025. Ameren expects these issuances to provide equity of about $100 million annually. In addition to the issuance of common shares in connection with the 2021 settlement of the remaining portion of the forward sale agreement, Ameren plans to issue incremental equity of about $150 million in 2021 and about $300 million each year from 2022 to 2025. Ameren expects its equity to total capitalization to be about 45% through December 31, 2025, with the long-term intent to support solid investment-grade credit ratings.
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 December 31, 2020, 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 $1.9 billion at December 31, 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. Also, in August 2019, Ameren entered into a forward sale agreement with a counterparty relating to 7.5 million shares of common stock. In December 2020, Ameren partially settled the forward sale agreement by physically delivering 5.9 million shares of common stock for cash proceeds of $425 million. In February 2021, Ameren settled the remainder of the forward sale agreement by physically delivering 1.6 million shares of common stock for cash proceeds of $113 million. The proceeds were used to fund a portion of Ameren Missouri’s wind generation investments. 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 years ended December 31, 2020 and 2019:
Net Cash Provided by
Operating Activities
Net Cash Used in
Investing Activities
Net Cash Provided by
Financing Activities
20202019Variance20202019Variance20202019Variance
Ameren$1,727 $2,170 $(443)$(3,329)$(2,435)$(894)$1,727 $334 $1,393 
Ameren Missouri911 1,067 (156)(1,904)(1,095)(809)1,099 59 1,040 
Ameren Illinois679 962 (283)(1,444)(1,205)(239)787 288 499 
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 riders, which may be adjusted without a traditional regulatory rate review, subject to prudence reviews. Similar regulatory mechanisms exist for certain 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 affect the amount and timing of our cash provided by operating activities. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for more information about our regulatory frameworks.
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. For information regarding Ameren Missouri’s and Ameren Illinois’ suspensions and reinstatement of customer disconnection activities and late fee charges for nonpayment, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report. In addition, see Results of Operations above for more information on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement.
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Ameren
Ameren’s cash provided by operating activities decreased $443 million in 2020, compared with 2019. The following items contributed to the decrease:
A $381 million decrease resulting from reduced customer collections, primarily resulting from a decrease in sales volumes and an increase in accounts receivable balances, which were primarily due to the COVID-19 pandemic, and a net decrease attributable to regulatory recovery mechanisms, partially offset by decreased fuel and purchased power costs at Ameren Missouri and decreased purchased power costs and volumes, and natural gas costs, at Ameren Illinois.
A $38 million increase in payments to settle ARO liabilities, primarily related to Ameren Missouri’s CCR storage facilities.
A $28 million increase in pension and postretirement benefit plan contributions.
A $27 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 $25 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased in 2020 to mitigate against any potential supply disruptions associated with the COVID-19 pandemic.
A $16 million increase in interest payments, primarily due to an increase in the average outstanding debt at Ameren (parent) and Ameren Illinois.
A $13 million increase in property tax payments at Ameren Missouri due to higher assessed 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 II, Item 8, of this report.
The following items partially offset the decrease in Ameren’s cash from operating activities between periods:
A $37 million decrease in payroll tax payments primarily due to 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 $35 million decrease in energy center maintenance costs, other than those associated with the Callaway refueling and maintenance outage, at Ameren Missouri, 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.
An $11 million decrease in coal inventory at Ameren Missouri primarily as a result of decreased market prices and inventory reductions at the coal-fired energy centers.
Ameren Missouri
Ameren Missouri’s cash provided by operating activities decreased $156 million in 2020, compared with 2019. The following items contributed to the decrease:
A $190 million decrease resulting from reduced customer collections, primarily resulting from a decrease in sales volumes and an increase in accounts receivable balances, which were primarily due to the COVID-19 pandemic, and a net decrease attributable to regulatory recovery mechanisms, partially offset by decreased fuel and purchased power costs.
A $38 million increase in payments to settle ARO liabilities, primarily related to CCR storage facilities.
A $17 million decrease in net collateral activity 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 pension and postretirement benefit plan contributions.
A $13 million increase in property tax payments due to higher assessed property tax values.
A $12 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased in 2020 to mitigate against any potential supply disruptions associated with the COVID-19 pandemic.
The following items partially offset the decrease in Ameren Missouri’s cash from operating activities between periods:
A $76 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 $35 million decrease in energy center maintenance costs, other than those associated with the Callaway 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.
A $17 million decrease in payroll tax payments primarily due to 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.
An $11 million decrease in coal inventory primarily as a result of decreased market prices and inventory reductions at the coal-fired
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energy centers.
Ameren Illinois
Ameren Illinois’ cash provided by operating activities decreased $283 million in 2020, compared with 2019. The following items contributed to the decrease:
A $195 million decrease resulting from reduced customer collections, primarily resulting from a decrease in sales volumes and an increase in accounts receivable balances, which were primarily due to the COVID-19 pandemic, and a net decrease attributable to regulatory recovery mechanisms, partially offset by decreased purchased power costs and volumes, and natural gas costs.
A $37 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 $13 million decrease, primarily resulting from increases to materials and supplies to support operations as levels were increased in 2020 to mitigate against any potential supply disruptions associated with the COVID-19 pandemic.
A $10 million increase in interest payments, primarily due to an increase in the average outstanding debt.
A $10 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 renewable energy contracts entered into pursuant to the FEJA.
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 II, Item 8, of this report.
A $8 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 $14 million decrease in payroll tax payments primarily due to 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.
Pension Plans
Ameren’s pension plans are funded in compliance with income tax regulations, federal funding requirements, and other regulatory requirements. As a result, Ameren expects to fund its pension plans at a level equal to the greater of the pension cost or the legally required minimum contribution. Based on Ameren’s assumptions at December 31, 2020, its investment performance in 2020, and its pension funding policy, Ameren expects to make aggregate contributions of $60 million over the next five years. We estimate that Ameren Missouri’s and Ameren Illinois’ portions of the future funding requirements will be approximately 30% and 60%, respectively. These estimates may change based on actual investment performance, changes in interest rates, changes in our assumptions, changes in government regulations, and any voluntary contributions. In 2020, Ameren contributed $52 million to its pension plans. See Note 10 – Retirement Benefits under Part II, Item 8, of this report for additional information.
Cash Flows from Investing Activities
Ameren’s cash used in investing activities increased $894 million during 2020, compared with 2019, primarily as a result of a $564 million increase from the acquisition of the High Prairie Renewable Energy Center and a $258 million increase in capital expenditures. Cash used in investing activities also increased due to a $45 million increase in net investment activity in the nuclear decommissioning trust fund at Ameren Missouri and a $35 million increase due to the timing of nuclear fuel expenditures. In addition to the capital expenditure changes at Ameren Missouri and Ameren Illinois discussed below, Ameren’s capital expenditures were partially offset by a $43 million decrease in capital expenditures at ATXI and other electric transmission subsidiaries, primarily as a result of decreased Mark Twain transmission line expenditures, as it was placed in service in 2019. In 2020, ATXI placed the ninth and final line segment of the Illinois Rivers transmission line in service.
Ameren Missouri’s cash used in investing activities increased $809 million during 2020, compared with 2019, primarily as a result of $564 million in cash paid for the acquisition of the High Prairie Renewable Energy Center and a $139 million increase in net money pool advances. Cash used in investing activities also increased due to a $45 million increase in net investment activity in the nuclear decommissioning trust fund, a $35 million increase due to the timing of nuclear fuel expenditures, and a $26 million increase in capital expenditures, primarily related to electric delivery infrastructure upgrades and electric transmission system reliability projects.
Ameren Illinois’ cash used in investing activities increased $239 million during 2020, compared with 2019, due to an increase in capital expenditures, primarily related to electric transmission system reliability projects.
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Capital Expenditures
The following charts present our capital expenditures for the years ended December 31, 2020 and 2019:
2020 – Total Ameren $3,233(a)
2019 – Total Ameren $2,411(a)
aee-20201231_g25.jpgaee-20201231_g26.jpg
Ameren Missouri(b)
Ameren Illinois Natural GasATXI and other electric transmission subsidiaries
Ameren Illinois Electric DistributionAmeren Illinois Transmission
(a)Includes Other capital expenditures of $7 million and $(29) million for the years ended December 31, 2020 and 2019, respectively, which includes amounts for the elimination of intercompany transfers.
(b)Ameren Missouri capital expenditures include $564 million for the acquisition of the High Prairie Renewable Energy Center for the year ended December 31, 2020.
Ameren’s 2020 capital expenditures consisted of expenditures made by its subsidiaries, including ATXI and other electric transmission subsidiaries, which spent $113 million primarily on the Illinois Rivers transmission line. Of the $301 million in capital expenditures spent by Ameren Illinois Natural Gas during 2020, $189 million related to natural gas projects eligible for QIP recovery. In addition, Ameren Missouri expenditures included approximately $564 million for the acquisition of the High Prairie Renewable Energy Center. In both years, other capital expenditures were made principally to maintain, upgrade, and improve the reliability of the transmission and distribution systems of Ameren Missouri and Ameren Illinois by investing in substation upgrades, energy center projects, and smart-grid technology. Additionally, the Ameren Companies invested in various software projects.
Ameren’s 2019 capital expenditures consisted of expenditures made by its subsidiaries, including ATXI, which spent $156 million primarily on the Mark Twain and Illinois Rivers transmission lines. Of the $318 million in capital expenditures spent by Ameren Illinois Natural Gas during 2019, $203 million related to natural gas projects eligible for QIP recovery. Ameren Illinois exceeded the minimum capital spending levels required pursuant to IEIMA in 2019.
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The following table presents Ameren’s estimate of capital expenditures that will be incurred from 2021 through 2025, including construction expenditures, allowance for funds used during construction, and expenditures for compliance with existing environmental regulations:
20212022-2025Total
Ameren Missouri$2,205 $6,450 $7,130 $8,655 $9,335 
Ameren Illinois Electric Distribution515 2,060 2,280 2,575 2,795 
Ameren Illinois Natural Gas335 1,315 1,450 1,650 1,785 
Ameren Illinois Transmission615 2,715 3,000 3,330 3,615 
ATXI and Other Electric Transmission Subsidiaries55 130 140 185 195 
Other20 25 25 30 
Ameren$3,730 $12,690 $14,025 $16,420 $17,755 
Ameren Missouri’s estimated capital expenditures include transmission, distribution, grid modernization, and generation-related investments, as well as expenditures for compliance with environmental regulations. In addition, Ameren Missouri’s estimated capital expenditures include approximately $500 million related to 300 MWs of wind generation at the Atchison Renewable Energy Center, but exclude incremental renewable generation investment opportunities of 1,200 MWs by 2025, which are included in Ameren Missouri’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. Ameren Illinois’ estimated capital expenditures are primarily for electric and natural gas transmission and distribution-related investments, including capital expenditures to modernize its electric and gas distribution systems. 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.
Ameren Missouri continually reviews its generation portfolio and expected power needs. As a result, Ameren Missouri could modify its plan for generation capacity, the type of generation asset technology that will be employed, and whether capacity or power may be purchased, among other changes. Additionally, we continually review the reliability of our transmission and distribution systems, expected capacity needs, and opportunities for transmission investments within and outside our service territories. The timing and amount of investments could vary because of changes in expected capacity, the condition of transmission and distribution systems, and our ability and willingness to pursue transmission investments, among other factors. Any changes in future generation, transmission, or distribution needs could result in significant changes in capital expenditures or losses, which could be material. Compliance with environmental regulations could also have significant impacts on the level of capital expenditures.
Environmental Capital Expenditures
Ameren Missouri will continue to incur costs to comply with federal and state regulations, including those requiring the reduction of SO2, NOx, and mercury emissions from its coal-fired energy centers. See Note 14 – Commitments and Contingencies under Part II, Item 8, of this report for a discussion of existing and proposed environmental laws that affect, or may affect, our facilities and capital expenditures to comply with such laws.
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.
Ameren’s cash provided by financing activities increased $1,393 million during 2020, compared with 2019. During 2020, Ameren utilized net proceeds of $2,183 million from the issuance of long-term debt for general corporate purposes, including to repay then-outstanding short-term debt, including short-term debt incurred in connection with the repayment at maturity of long-term debt, to partially finance the acquisition of two wind generation facilities, and to repay other long-term debt. In addition, Ameren received cash proceeds of $425 million from the partial settlement of a forward sale agreement of common stock that were used to fund a portion of Ameren Missouri’s wind generation investments. Collectively, in 2020, Ameren repaid long-term debt of $442 million, received $50 million from net commercial paper issuances, and used cash provided by financing activities to fund, in part, investing activities. In comparison, in 2019, Ameren utilized net proceeds of $1,527 million from the issuance 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, and to repay at maturity other long-term debt. Collectively, in 2019, Ameren repaid long-term debt of $580 million, repaid net short-term debt of $157 million, and used cash provided by financing activities to fund, in part, investing activities. During 2020, Ameren paid common stock dividends of $494 million, compared with $472 million, in dividend payments in 2019.
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Ameren Missouri’s cash provided by financing activities increased $1,040 million during 2020, compared with 2019. During 2020, Ameren Missouri utilized net proceeds of $1,012 million from the issuance 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, and to partially finance the acquisition of two wind generation facilities. Collectively, in 2020, Ameren Missouri repaid long-term debt of $92 million, repaid net short-term debt of $234 million, and used cash provided by financing activities to fund, in part, investing activities. In comparison, in 2019, Ameren Missouri utilized net proceeds of $778 million from the issuance 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, and to repay at maturity other long-term debt. Collectively, in 2019, Ameren Missouri repaid long-term debt of $580 million, received $179 million from net commercial paper issuances, and used cash provided by financing activities to fund, in part, investing activities. During 2020, Ameren Missouri received $491 million in capital contributions from Ameren (parent), of which, $67 million was associated with the tax allocation agreement, compared with $124 million in capital contributions received in 2019. During 2020, Ameren Missouri paid common stock dividends of $66 million, compared with $430 million in dividend payments in 2019, due to an increase in investing cash needs, including the acquisition of wind generation facilities.
Ameren Illinois’ cash provided by financing activities increased $499 million during 2020, compared with 2019. During 2020, Ameren Illinois received $464 million in capital contributions from Ameren (parent), of which, $9 million was associated with the tax allocation agreement, compared with $15 million in capital contributions received in 2019. In addition, Ameren Illinois utilized net proceeds of $373 million from the issuance of long-term debt to repay then-outstanding short-term debt. Collectively, in 2020, Ameren Illinois repaid net short-term debt of $53 million, and used cash provided by financing activities to fund, in part, investing activities. In comparison, in 2019, Ameren Illinois utilized net proceeds of $299 million from the issuance of long-term debt to repay then-outstanding short-term debt. Collectively, in 2019 Ameren Illinois repaid net short-term debt of $19 million, and used cash provided by financing activities to fund, in part, investing activities. In addition, during 2020, Ameren Illinois borrowed $19 million from the money pool and paid common stock dividends of $9 million.
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 4 – Short-term Debt and Liquidity under Part II, Item 8, 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 net available liquidity as of December 31, 2020:
Available at
December 31, 2020
Ameren (parent) and Ameren Missouri(a):
Missouri Credit Agreement borrowing capacity
$1,200 
Less: Ameren (parent) commercial paper outstanding315 
Less: Letters of credit
Missouri Credit Agreement subtotal
882 
Ameren (parent) and Ameren Illinois(b):
Illinois Credit Agreement borrowing capacity
1,100 
Less: Ameren (parent) commercial paper outstanding175 
Less: Letters of credit
Illinois Credit Agreement subtotal
924 
Subtotal$1,806 
Cash and cash equivalents139 
Net Available Liquidity$1,945 
(a)     The maximum aggregate amount available to Ameren (parent) and Ameren Missouri under the Missouri Credit Agreement is $900 million and $850 million, respectively. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for further discussion of the Credit Agreements.
(b)     The maximum aggregate amount available to Ameren (parent) and Ameren Illinois under the Illinois Credit Agreement is $500 million and $800 million, respectively. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for further discussion of the Credit Agreements.
The Credit Agreements, among other things, provide $2.3 billion of credit until maturity in December 2024. See Note 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for additional information on the Credit Agreements. During the year ended December 31, 2020, 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.
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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 2020, the FERC issued orders authorizing Ameren Missouri and Ameren Illinois to each issue up to $1 billion of short-term debt securities through March 2022 and September 2022, respectively. In July 2019, the FERC issued an order authorizing ATXI to issue up to $300 million of short-term debt securities through 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 short-term 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 for the years ended December 31, 2020 and 2019. For additional information related to the terms and uses of these issuances and effective registration statements, and Ameren’s forward sale agreement relating to common stock, see Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of this report. For information on capital contributions received by Ameren Missouri and Ameren Illinois from Ameren (parent), see Note 13 – Related-party Transactions under Part II, Item 8, of this report. Additionally, Ameren Illinois will redeem all outstanding shares of its 6.625% and 7.75% series preferred stock in March 2021.
Month Issued, Redeemed, Repurchased, or Matured20202019
Issuances of Long-term Debt
Ameren:
3.50% Senior unsecured notes due 2031April$798 $— 
2.50% Senior unsecured notes due 2024September 450 
Ameren Missouri:
2.95% First mortgage bonds due 2030March465 — 
2.625% First mortgage bonds due 2051 (green bonds)October547 — 
3.50% First mortgage bonds due 2029March 450 
3.25% First mortgage bonds due 2049October 328 
Ameren Illinois:
1.55% First mortgage bonds due 2030November373 — 
3.25% First mortgage bonds due 2050November 299 
Total long-term debt issuances $2,183 $1,527 
Issuances of Common Stock
Ameren:
DRPlus and 401(k)(a)(b)
Various$51 $68 
Forward sale agreement(c)
December425 — 
Total common stock issuances$476 $68 
Total Ameren long-term debt and common stock issuances$2,659 $1,595 
Redemptions, Repurchases, and Maturities of Long-term Debt
Ameren:
2.70% Senior unsecured notes due 2020October$350 $— 
Ameren Missouri:
5.00% Senior secured notes due 2020February85 — 
6.70% Senior secured notes due 2019February 329 
5.10% Senior unsecured notes due 2019October 244 
5.45% First mortgage bonds due 2028October (d)
City of Bowling Green financing obligation (Peno Creek CT)December7 
Ameren Illinois:
5.70% First mortgage bonds due 2024September (d)
5.90% First mortgage bonds due 2023October (d)
Total long-term debt redemptions, repurchases, and maturities $442 $580 
(a)    Ameren issued a total of 0.7 million and 0.9 million shares of common stock under its DRPlus and 401(k) plan in 2020 and 2019, respectively.
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(b)    Excludes 0.5 million and 0.8 million shares of common stock valued at $38 million and $54 million issued for no cash consideration in connection with stock-based compensation in 2020 and 2019, respectively.
(c)    Ameren issued 5.9 million shares of common stock pursuant to a partial settlement of a forward sale agreement in December 2020.
(d)     Amount less than $1 million.
The Ameren Companies may sell securities registered under their effective registration statements if market conditions and capital requirements warrant such sales. Any offer and sale will be made only by means of a prospectus that meets the requirements of the Securities Act of 1933 and the rules and regulations thereunder.
Indebtedness Provisions and Other Covenants
At December 31, 2020, the Ameren Companies were in compliance with the provisions and covenants contained within 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 4 – Short-term Debt and Liquidity and Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of this report for a discussion of covenants and provisions (and applicable cross-default provisions) contained in our credit agreements, certain of the Ameren Companies’ indentures and articles of incorporation, and ATXI’s 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
Ameren paid to its shareholders common stock dividends totaling $494 million, or $2.00 per share, in 2020 and $472 million, or $1.92 per share, in 2019. 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 earnings over the next few years. On February 12, 2021, the board of directors of Ameren declared a quarterly dividend on Ameren’s common stock of 55 cents per share, payable on March 31, 2021, to shareholders of record on March 10, 2021.
Certain of our financial agreements and corporate organizational documents contain covenants and conditions that, among other things, restrict the Ameren Companies’ payment of dividends in certain circumstances.
Ameren Illinois’ articles of incorporation require its dividend payments on common stock to be based on ratios of common stock to total capitalization and other provisions with respect to certain operating expenses and accumulations of earned surplus. Additionally, Ameren has committed to the FERC to maintain a minimum of 30% equity in the capital structure at Ameren Illinois.
Ameren Missouri and Ameren Illinois, as well as certain other nonregistrant Ameren subsidiaries, are subject to Section 305(a) of the Federal Power Act, which makes it unlawful for any officer or director of a public utility, as defined in the Federal Power Act, to participate in the making or paying of any dividend from any funds “properly included in capital account.” The FERC has consistently interpreted the provision to allow dividends to be paid as long as (1) the source of the dividends is clearly disclosed, (2) the dividends are not excessive, and (3) there is no self-dealing on the part of corporate officials. At a minimum, Ameren believes that dividends can be paid by its subsidiaries that are public utilities from net income and from retained earnings. In addition, under Illinois law, Ameren Illinois and ATXI may not pay any dividend on their respective stock unless, among other things, their respective earnings and earned surplus are sufficient to declare and pay a dividend after provisions are made for reasonable and proper reserves, or unless Ameren Illinois or ATXI has specific authorization from the ICC.
At December 31, 2020, the amount of restricted net assets of Ameren’s subsidiaries that may not be distributed to Ameren in the form of a loan or dividend was $3.3 billion.
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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:
20202019
Ameren$494 $472 
Ameren Missouri66 430 
Ameren Illinois9 — 
ATXI30 15 
Ameren Missouri and Ameren Illinois each have issued preferred stock, which provides for cumulative preferred stock dividends. Each company’s board of directors considers the declaration of preferred stock dividends to shareholders of record on a certain date, stating the date on which the dividend is payable and the amount to be paid. See Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of this report for further detail concerning the preferred stock issuances.
Contractual Obligations
The following table presents our contractual obligations as of December 31, 2020. See Note 10 – Retirement Benefits under Part II, Item 8, of this report for information regarding expected minimum funding levels for our pension plans, which are not included in the table below. In addition, routine short-term purchase order commitments are not included.
20212022 – 20232024 – 20252026 and ThereafterTotal
Ameren:
Long-term debt and financing obligations(a)
$$745 $1,150 $9,287 $11,190 
Interest payments431 843 741 4,876 6,891 
Operating leases16 11 41 
Other obligations(b)
788 697 289 195 1,969 
Total cash contractual obligations$1,236 $2,301 $2,191 $14,363 $20,091 
Ameren Missouri:
Long-term debt and financing obligations(a)
$$295 $350 $4,499 $5,152 
Interest payments216 427 358 2,412 3,413 
Operating leases14 10 37 
Other obligations(b)
503 503 258 126 1,390 
Total cash contractual obligations$735 $1,239 $976 $7,042 $9,992 
Ameren Illinois:
Long-term debt(a)
$— $400 $300 $3,288 $3,988 
Interest payments148 283 268 2,166 2,865 
Other obligations(b)
290 200 33 47 570 
Total cash contractual obligations$438 $883 $601 $5,501 $7,423 
(a)Excludes unamortized discount and premium and debt issuance costs of $12 million, $48 million, and $42 million at Ameren, Ameren Missouri, and Ameren Illinois, respectively. See Note 5 – Long-term Debt and Equity Financings under Part II, Item 8 of this report, for discussion of items included herein.
(b)See Other Obligations in Note 14 – Commitments and Contingencies under Part II, Item 8 of this report, for discussion of items included herein.
Off-balance-sheet Arrangements
At December 31, 2020, none of the Ameren Companies had any significant off-balance-sheet financing arrangements, other than the forward sale agreement relating to common stock, which was fully settled by mid-February 2021, and variable interest entities. See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report for further detail concerning variable interest entities. See Note 5 – Long-term Debt and Equity Financings under Part II, Item 8, of this report 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.
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The following table presents the principal credit ratings of the Ameren Companies by Moody’s and S&P effective on the date of this report:
Moody’sS&P
Ameren:
Issuer/corporate credit ratingBaa1BBB+
Senior unsecured debtBaa1BBB
Commercial paperP-2A-2
Ameren Missouri:
Issuer/corporate credit ratingBaa1BBB+
Secured debtA2A
Senior unsecured debtBaa1Not Rated
Commercial paperP-2A-2
Ameren Illinois:
Issuer/corporate credit ratingA3BBB+
Secured debtA1A
Senior unsecured debtA3BBB+
Commercial paperP-2A-2
ATXI:
Issuer credit ratingA2Not Rated
Senior unsecured debtA2Not Rated
A credit rating is not a recommendation to buy, sell, or hold securities. It should be evaluated independently of any other rating. Ratings are subject to revision or withdrawal at any time by the rating organization.
Collateral Postings
Any weakening of our credit ratings may reduce access to capital and trigger additional collateral postings and prepayments. Such changes may also increase the cost of borrowing, resulting in an adverse effect on earnings. Cash collateral postings and prepayments made with external parties, including postings related to exchange-traded contracts, and cash collateral posted by external parties were immaterial at December 31, 2020. A sub-investment-grade issuer or senior unsecured debt rating (below “Baa3” from Moody’s or below “BBB-” from S&P) at December 31, 2020, 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 $119 million, $105 million, and $14 million, respectively.
Changes in commodity prices could trigger additional collateral postings and prepayments. Based on credit ratings at December 31, 2020, if market prices were 15% higher or lower than December 31, 2020 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 provide 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 2021 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 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; changes in deferred payment arrangements 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 II, Item 8, of this report.
Operations
In 2020, we experienced a net decrease in our sales volumes, which have been, and continue to be, affected by the COVID-19 pandemic, among other things, but we expect gradual improvement in economic activities in 2021. Further, our customers’ payment for services has been adversely affected by the COVID-19 pandemic, which 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
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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 provided for the recovery of bad debt expense in 2020, which reverted to the recovery of bad debt write-offs, net of any subsequent recoveries, in 2021. Ameren Missouri does not have a bad debt rider or tracker, and thus its earnings are exposed to increases in bad debt expense, absent regulatory relief. However, Ameren Missouri does not expect a material impact to earnings from increases in bad debt expense. See the Results of Operations section above for additional information on our accounts receivable balances and changes in Ameren Missouri’s sales volumes in 2020, compared to 2019, and sales volumes expected in 2021, compared to 2020. Additionally, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report 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 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 future regulatory rate reviews, and a June 2020 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.
In mid-February 2021, extremely cold weather in the central and southern United States, including in our service territories, caused a significant increase in customer demand for electricity and natural gas. These weather conditions resulted in industry natural gas supply disruptions and limitations, and operational issues at generation and transmission facilities throughout the regions. However, we did not experience significant generation or reliability issues. These events resulted in significant increases in power and natural gas prices in the energy markets. As a result of market purchases to serve incremental demand, Ameren Illinois and Ameren Missouri incurred additional natural gas costs of approximately $200 million and $50 million, respectively, for purchases made for resale between February 13, 2021, and February 17, 2021. These amounts are preliminary estimates and are subject to final settlement. The increase in our purchased power costs over the same time period was immaterial. Ameren Missouri and Ameren Illinois have riders to recover natural gas and purchased power costs. We do not expect this event will have a significant impact on our financial results or liquidity.
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, 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. 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 plan includes a portfolio of customer energy-efficiency programs through December 2022 and low-income customer energy-efficiency programs through December 2024, along with a rider. Ameren Missouri intends to invest $290 million over the life of the plan, including $65 million in 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. If the target goals are achieved for 2020, 2021, and 2022, additional revenues of $10 million, $13 million, and $11 million would be recognized in 2021, 2022, and 2022, respectively. 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 goals. Ameren Missouri’s ability to achieve and/or exceed targeted goals could be affected by the COVID-19 pandemic. Ameren Missouri recognized $6 million, $37 million, $11 million, and $28 million in revenues related to MEEIA performance incentives in 2020, 2019, 2018, and 2016, respectively.
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 pursuant to the FAC by approximately $115 million from the base level established 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 trackers. On an annualized basis, these changes reflect approximately $20 million of increased revenues and approximate decreases in purchased power expenses of $15 million, other operating and maintenance expenses of $60 million, and income tax
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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 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 by the end of March 2021. Ameren Missouri expects key drivers of the electric service regulatory rate review to include increased infrastructure investments and other costs of service.
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, the revenue requirements included in 2021 rates for Ameren Illinois’ and ATXI’s electric transmission businesses are $380 million and $200 million, respectively. These revenue requirements represent an increase in Ameren Illinois’ and ATXI’s revenue requirements of $67 million and $8 million, respectively, from the revenue requirements reflected in 2020 rates, primarily due to the expected rate base growth. These rates will affect Ameren Illinois’ and ATXI’s cash receipts during 2021, but will not determine their respective electric transmission service operating revenues, which will instead be based on 2021 actual recoverable costs, rate base, and a return on rate base at the applicable WACC as calculated under the FERC formula ratemaking framework.
The allowed base ROE for FERC-regulated transmission rates previously charged under the MISO tariff 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. A proposed rulemaking also has been issued by the FERC regarding the transmission incentives policy, including the basis points added for transmission owner participation in an RTO, and a separate notice of inquiry regarding the base ROE generally applicable to the industry. Ameren is unable to predict the ultimate impact of any changes to the FERC’s incentives policy, action on the notice of inquiry on ROE, 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 $11 million and $7 million, respectively, based on each company’s 2021 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, the performance-based formula ratemaking framework expires at the end of 2022. If not extended, Ameren Illinois would be required to establish future rates through a traditional regulatory rate review, which would allow the use of a future test year, with the ICC. The decoupling provisions extend beyond the end of the formula ratemaking 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, and filed a request with the ICC in April 2020, which, if approved, would allow Ameren Illinois to continue to reconcile electric distribution service rates to the last annual revenue requirement approved by the ICC under the performance-based formula ratemaking framework, for a period of up to two years after the framework expires or is no longer elected. Ameren Illinois expects a decision by the ICC in March 2021.
In December 2020, the ICC issued an order in Ameren Illinois’ annual update filing that approved a $49 million decrease in Ameren Illinois’ electric distribution service rates beginning in January 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’ 2021 electric distribution service revenues will be based on its 2021 actual recoverable costs, 2021 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. As of December 31, 2020, Ameren Illinois expects its 2021 year-end rate base to be $3.7 billion. With or without extension of the formula ratemaking framework, the 2021 revenue requirement reconciliation will be collected from, or refunded to, customers in 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 $10 million change in Ameren’s and Ameren Illinois’ annual net income, based on Ameren Illinois’ 2021 projected year-end rate base. Ameren Illinois’ allowed ROE for 2020 was based on an annual average of the monthly yields of the 30-year United States Treasury bonds of 1.56%.
Ameren Illinois earns a return at the applicable WACC on its electric energy-efficiency program investments. Ameren Illinois’ electric energy-efficiency investments are deferred as a regulatory asset and earn a return at the applicable WACC, with the ROE based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. The allowed ROE on electric energy-efficiency investments can be increased or decreased by up to 200 basis points, depending on the achievement of annual
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energy savings goals. Ameren Illinois plans to invest up to approximately $100 million per year in electric energy-efficiency programs through 2025, and will earn a return on those investments. 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 January 2021, the ICC issued an order in Ameren Illinois’ February 2020 natural gas delivery service regulatory rate review, which resulted in an increase to its annual revenues for natural gas delivery service of $76 million. The new rates became effective in January 2021. As a result of this order, the rate base under the QIP was reset to zero. Ameren Illinois used a 2021 future test year in this proceeding.
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 are amortized over the period between refueling and maintenance outages, which is approximately 18 months. 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 has begun to replace certain key components of the generator in order to return the energy center to service. Ameren Missouri expects generator repairs of $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 late June or early July 2021. As of December 31, 2020, Ameren Missouri deferred, as a regulatory asset, $39 million in maintenance expenses related to its scheduled fall 2020 outage, which it began to amortize in January 2021. The regulatory asset will be amortized until the completion of the next refueling and maintenance outage. 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 under the FAC. Ameren Missouri does not expect a significant increase to other operations and maintenance expense as a result of the unplanned outage. Prior to 2020, maintenance expenses for refueling and maintenance outages were expensed as incurred.
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 COVID-19, 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. We 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 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 additions remaining in 2021, see below.
In February 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 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 $8.4 billion over the five-year period from 2021 through 2025, with expenditures largely recoverable under the PISA and the RESRAM. The planned investments in 2024 and 2025 are based on the assumption that Ameren Missouri requests and receives MoPSC approval of an extension of the PISA through December 2028.
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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, which is subject to review by the MoPSC for 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. It also includes expanding renewable sources by adding 3,100 MWs of renewable generation by the end of 2030 and a total of 5,400 MWs of renewable generation by 2040. These amounts include the 700 MWs of wind generation projects discussed below, which will support Ameren Missouri’s compliance with the state of Missouri’s requirement of achieving 15% of native load sales from renewable energy sources 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 future 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, 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. The next integrated resource plan is expected to be filed in September 2023.
In December 2020, Ameren Missouri acquired a 400-MW wind generation project located in northeastern Missouri for approximately $615 million, and placed the assets in service as the High Prairie Renewable Energy Center. In January 2021, Ameren Missouri acquired an up-to 300-MW wind generation project located in northwestern Missouri. At the date of this filing, Ameren Missouri placed 120 MWs in service as the Atchison Renewable Energy Center, with a purchase price of approximately $200 million. There have been changes to the schedule for this project, particularly as a result of component delivery delays. Ameren Missouri expects approximately 150 MWs of the up-to 300-MW project to be in service by the end of the first quarter of 2021, and the remaining portion to be in service later in 2021. See discussion below related to production tax credits.
Through 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 $17.8 billion (Ameren Missouri – up to $9.3 billion; Ameren Illinois – up to $8.2 billion; ATXI – up to $0.2 billion) of capital expenditures during the period from 2021 through 2025. Ameren’s and Ameren Missouri’s estimates include 300 MWs of wind generation at the Atchison Renewable Energy Center, but exclude incremental renewable generation investment opportunities of 1,200 MWs by 2025, which are included in Ameren Missouri’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 requirements that may result from the NSR and Clean Air Act Litigation discussed in Note 14 – Commitments and Contingencies under Part II, Item 8, of this report, could result in significant increases in capital expenditures and operating costs. Regulations enacted by a prior federal administration and under legal challenge can be reviewed or recommended for repeal by the EPA, and new replacement or alternative regulations 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 4 – Short-term Debt and Liquidity under Part II, Item 8, of this report for additional information regarding the Credit Agreements. The Ameren Companies have no material maturities of long-term debt until
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2022. With the recently completed Ameren Missouri and Ameren Illinois debt issuances and availability under the Credit Agreements, as well as the proceeds from the recent settlement of the forward sale agreement, Ameren, Ameren Missouri, and Ameren Illinois believe that their liquidity is adequate given their expected operating cash flows, capital expenditures, including expected wind generation 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 these cash flow requirements, 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 2025. Ameren expects these issuances to provide equity of about $100 million annually. In addition to the issuance of common shares in connection with the 2021 settlement of the remaining portion of the forward sale agreement, Ameren plans to issue incremental equity of about $150 million in 2021 and about $300 million each year from 2022 to 2025. Ameren expects its equity to total capitalization to be about 45% through December 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).
As of December 31, 2020, Ameren had $90 million in tax benefits related to federal and state income tax credit carryforwards and $7 million in tax benefits from state net operating loss carryforwards, 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 and existing tax credit carryforwards.
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 II, Item 8, of this report.
ACCOUNTING MATTERS
Critical Accounting Estimates
Preparation of the financial statements and related disclosures in compliance with GAAP requires the application of appropriate technical accounting rules and guidance, as well as the use of estimates. These estimates involve judgments regarding many factors that in and of themselves could materially affect the financial statements and disclosures. We have outlined below the critical accounting estimates that we believe are the most difficult, subjective, or complex. Any change in the assumptions or judgments applied in determining the following matters, among others, could have a material impact on future financial results.
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Accounting EstimateUncertainties Affecting Application
Regulatory Mechanisms and Cost Recovery
We defer costs and recognize revenues that we intend to collect in future rates.
Regulatory environment and external regulatory decisions and requirements
Anticipated future regulatory decisions and our assessment of their impact
The impact of prudence reviews, complaint cases, limitations on electric rate increases in Missouri, and opposition during the ratemaking process that may limit our ability to timely recover costs and earn a fair return on our investments
Ameren Illinois’ assessment of and ability to estimate the current year’s electric distribution service costs to be reflected in revenues and recovered from customers in a subsequent year under performance-based formula ratemaking framework
Ameren Illinois’ and ATXI’s assessment of and ability to estimate the current year’s electric transmission service costs to be reflected in revenues and recovered from customers in a subsequent year under the FERC ratemaking frameworks
Ameren Missouri’s estimate of revenue recovery under the MEEIA plans
Basis for Judgment
The application of accounting guidance for rate-regulated businesses results in recording regulatory assets and liabilities. Regulatory assets represent the deferral of incurred costs that are probable of future recovery in customer rates. Regulatory assets are amortized as the incurred costs are recovered through customer rates. In some cases, we record regulatory assets before approval for recovery has been received from the applicable regulatory commission. We must use judgment to conclude that costs deferred as regulatory assets are probable of future recovery. We base our conclusion on certain factors including, but not limited to, orders issued by our regulatory commissions, legislation, or historical experience, as well as discussions with legal counsel. If facts and circumstances lead us to conclude that a recorded regulatory asset is no longer probable of recovery or that plant assets are probable of disallowance, we record a charge to earnings, which could be material. Regulatory liabilities represent revenues received from customers to fund expected costs that have not yet been incurred or that are probable of future refunds to customers. We also recognize revenues for alternative revenue programs authorized by our regulators that allow for an automatic rate adjustment, are probable of recovery, and are collected within 24 months following the end of the annual period in which they are recognized. Under performance-based formula ratemaking, which expires at the end of 2022 unless extended, Ameren Illinois estimates its annual electric distribution revenue requirement for interim periods by using internal forecasted rate base and published forecasted data regarding the annual average of the monthly yields of the 30-year United States Treasury bonds. Ameren Illinois estimates its annual revenue requirement as of December 31 of each year using that year’s actual operating results and assesses the probability of recovery from or refund to customers that the ICC will order at the end of the following year. Variations in investments made or orders by the ICC or courts can result in a subsequent change in Ameren Illinois’ estimate. Ameren Illinois and ATXI follow a similar process for their FERC rate-regulated electric transmission businesses. Ameren Missouri estimates lost electric margins resulting from its MEEIA customer energy-efficiency programs, which are subsequently recovered through the MEEIA rider. See Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for a description of our regulatory mechanisms and quantification of these assets or liabilities for each of the Ameren Companies.
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Accounting EstimateUncertainties Affecting Application
Benefit Plan Accounting
Based on actuarial calculations, we accrue costs of providing future employee benefits for the benefit plans we offer our employees. See Note 10 – Retirement Benefits under Part II, Item 8, of this report.
Valuation inputs and assumptions used in the fair value measurements of plan assets, excluding those inputs that are readily observable
Discount rate
Cash balance plan interest crediting rate on certain plans
Future compensation increase assumption
Health care cost trend rates
Assumptions on the timing of employee retirements, terminations, benefit payments, and mortality
Ability to recover certain benefit plan costs from our customers
Changing market conditions that may affect investment and interest rate environments
Future rate of return on pension and other plan assets
Basis for Judgment
Ameren has defined benefit pension plans covering substantially all of its employees and has postretirement benefit plans covering non-union employees hired before October 2015 and union employees hired before January 2020. Our ultimate selection of the discount rate, health care trend rate, and expected rate of return on pension and other postretirement benefit plan assets is based on our consistent application of assumption-setting methodologies and our review of available historical, current, and projected rates, as applicable. We also make mortality assumptions to estimate our pension and other postretirement benefit obligations. See Note 10 – Retirement Benefits under Part II, Item 8, of this report for these assumptions and the sensitivity of Ameren’s benefit plans to potential changes in these assumptions.
Accounting EstimateUncertainties Affecting Application
Accounting for Contingencies
We make judgments and estimates in the recording and the disclosing of liabilities for claims, litigation, environmental remediation, the actions of various regulatory agencies, or other matters that occur in the normal course of business. We record a loss contingency when it is probable that a liability has been incurred and that the amount of the loss can be reasonably estimated.
Estimating financial impact of events
Estimating likelihood of various potential outcomes
Regulatory and political environments and requirements
Outcome of legal proceedings, settlements, or other factors
Changes in regulation, expected scope of work, technology, or timing of environmental remediation
Basis for Judgment
The determination of a loss contingency requires significant judgment as to the expected outcome of the contingency in future periods. In making the determination as to the amount of potential loss and the probability of loss, we consider the nature of the litigation, the claim or assessment, opinions or views of legal counsel, and the expected outcome of potential litigation, among other things. If no estimate is better than another within our range of estimates, we record as our best estimate of a loss the minimum value of our estimated range of outcomes. As additional information becomes available, we reassess the potential liability related to the contingency and revise our estimates. The amount recorded for any contingency may differ from actual costs incurred when the contingency is resolved. Contingencies are normally resolved over long periods of time. In our evaluation of legal matters, management consults with legal counsel and relies on analysis of relevant case law and legal precedents. See Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, and Note 14 – Commitments and Contingencies under Part II, Item 8, of this report for information on the Ameren Companies’ contingencies.
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Accounting EstimateUncertainties Affecting Application
Accounting for Income Taxes
We record a provision for income taxes, deferred tax assets and liabilities, and a valuation allowance against net deferred tax assets, if any. See Note 12 – Income Taxes under Part II, Item 8, of this report.
Changes in business, industry, laws, technology, or economic and market conditions affecting forecasted financial condition and/or results of operations
Estimates of the amount and character of future taxable income and forecasted use of our tax credit carryforwards
Enacted tax rates applicable to taxable income in years in which temporary differences are recovered or settled
Effectiveness of implementing tax planning strategies
Changes in income tax laws, including amounts subject to income tax, and the regulatory treatment of any tax reform changes
Results of audits and examinations by taxing authorities
Basis for Judgment
The reporting of tax-related assets and liabilities requires the use of estimates and significant management judgment. Deferred tax assets and liabilities are recorded to represent future effects on income taxes for temporary differences between the basis of assets for financial reporting and tax purposes. Although management believes that current estimates for deferred tax assets and liabilities are reasonable, actual results could differ from these estimates for a variety of reasons, including: a change in forecasted financial condition and/or results of operations; changes in income tax laws, enacted tax rates or amounts subject to income tax; the form, structure, and timing of asset or stock sales or dispositions; changes in the regulatory treatment of any tax reform benefits; and changes resulting from audits and examinations by taxing authorities. Valuation allowances against deferred tax assets are recorded when management concludes it is more likely than not such asset will not be realized in future periods. Accounting for income taxes also requires that only tax benefits for positions taken or expected to be taken on tax returns that meet the more-likely-than-not recognition threshold can be recognized or continue to be recognized. Management evaluates each position solely on the technical merits and facts and circumstances of the position, assuming that the position will be examined by a taxing authority that has full knowledge of all relevant information. Significant judgment is required to determine recognition thresholds and the related amount of tax benefits to be recognized. At each period end, and as new developments occur, management reevaluates its tax positions. See Note 12 – Income Taxes under Part II, Item 8, of this report for the amount of deferred income taxes recorded at December 31, 2020.
Accounting EstimateUncertainties Affecting Application
Accounting for Asset Retirement Obligations
We record the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets. See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
Discount rates
Cost escalation rates
Changes in regulation, expected scope of work, technology, or timing of environmental remediation
Estimates as to the probability, timing, or amount of cash expenditures associated with AROs
Basis for Judgment
We record the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the liabilities are incurred and capitalize a corresponding amount as part of the book value of the related long-lived asset. In subsequent periods, we adjust AROs for accretion and changes in the estimated fair values of the obligations, with a corresponding increase or decrease in the asset book value for the fair value changes. We estimate the fair value of our AROs using present value techniques, in which we make various assumptions about discount rates and cost escalation rates. In addition, these estimates include assumptions of the probability, timing, and amount of cash expenditures to settle the ARO, and are based on currently available technology. Ameren and Ameren Missouri have recorded AROs for retirement costs associated with the decommissioning of Ameren Missouri’s Callaway and High Prairie Renewable energy centers, CCR facilities, and river structures. Also, Ameren, Ameren Missouri, and Ameren Illinois have recorded AROs for retirement costs associated with asbestos removal and the disposal of certain transformers. An increase of 0.25% in the assumed escalation rates would increase Ameren’s AROs at December 31, 2020, by $78 million. See Note 15 – Supplemental Information under Part II, Item 8, of this report for the amount of AROs recorded at December 31, 2020.
Impact of New Accounting Pronouncements
See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report.
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EFFECTS OF INFLATION AND CHANGING PRICES
Ameren’s rates for retail electric and natural gas utility service are regulated by the MoPSC and the ICC. Nonretail electric rates are regulated by the FERC. Rate regulation is generally based on the recovery of historical or projected costs. As a result, revenue increases could lag changing prices. The current replacement cost of our utility plant substantially exceeds our recorded historical cost. Under existing regulatory practice, the historical cost of plant is recoverable from customers. As a result, customer rates designed to provide recovery of historical costs through depreciation might not be adequate to replace plant in future years.
Ameren Illinois participates in performance-based formula ratemaking for its electric distribution business and its electric energy-efficiency investments. Within those ratemaking frameworks, the annual average of the monthly yields of the 30-year United States Treasury bonds are the basis for Ameren Illinois’ allowed ROE. Therefore, there is a direct correlation between the yield of United States Treasury bonds, which are affected by inflation, and the allowed ROE applicable to Ameren Illinois’ electric distribution business and electric energy-efficiency investments. Ameren Illinois’ and ATXI’s electric transmission rates are determined pursuant to formula ratemaking. Additionally, Ameren Illinois and ATXI use a company-specific, forward-looking formula ratemaking framework in setting their transmission rates. These forward-looking rates are updated each January with forecasted information. A reconciliation during the year, which adjusts for the actual revenue requirement and for actual sales volumes, is used to adjust billing rates in a subsequent year.
Ameren Missouri recovers the cost of fuel for electric generation and the cost of purchased power by adjusting rates as allowed through the FAC. However, the FAC excludes substantially all transmission revenues and charges. Ameren Missouri is therefore exposed to transmission charges to the extent that they exceed transmission revenues. Ameren Illinois is required to purchase all of its expected power supply through procurement processes administered by the IPA. The cost of procured power can be affected by inflation. Ameren Illinois recovers power supply costs from electric customers by adjusting rates through a rider mechanism to accommodate changes in power prices.
In our Missouri and Illinois retail natural gas utility jurisdictions, changes in natural gas costs are generally reflected in billings to natural gas customers through PGA clauses.
See Part I, Item 1, and Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report for additional information on our recovery mechanisms.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk is the risk of changes in value of a physical asset or a financial instrument, derivative or nonderivative, caused by fluctuations in market variables such as interest rates, commodity prices, and equity security prices. A derivative is a contract whose value is dependent on, or derived from, the value of some underlying asset or index. The following discussion of our risk management activities includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. We handle market risks in accordance with established policies, which may include entering into various derivative transactions. In the normal course of business, we also face risks that are either nonfinancial or nonquantifiable. Such risks, principally business, legal, and operational risks, are not part of the following discussion.
Our risk management objectives are to optimize our physical generating assets and to pursue market opportunities within prudent risk parameters. Our risk management policies are set by a risk management steering committee, which is composed of senior-level Ameren officers, with Ameren board of directors’ oversight.
Interest Rate Risk
We are exposed to market risk through changes in interest rates associated with:
short-term variable-rate debt;
fixed-rate debt;
United States Treasury bonds; and
the discount rate applicable to asset retirement obligations, goodwill, and defined pension and postretirement benefit plans.
We manage our interest rate exposure by controlling the amount of debt instruments within our total capitalization portfolio and by monitoring the effects of market changes on interest rates. For defined pension and postretirement benefit plans, we control the duration and the portfolio mix of our plan assets. See Note 1 – Summary of Significant Accounting Policies and Note 10 – Retirement Benefits under Part II, Item 8, of this report for additional information related to asset retirement obligations, goodwill, and the defined pension and postretirement benefit plans.
The estimated increase in our annual interest expense and decrease in net income if interest rates were to increase by 100 basis points on variable-rate debt outstanding at December 31, 2020 is immaterial.
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The allowed ROE under Ameren Illinois’ electric distribution service and its electric energy-efficiency investments formula ratemaking recovery mechanisms is based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. Therefore, Ameren Illinois’ annual ROE for its electric distribution business is directly correlated to the yields on such bonds, which are outside of Ameren Illinois’ control. 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 $10 million change in Ameren’s and Ameren Illinois’ annual net income, based on its 2021 projected rate base. Interest rate levels also influence the ROE allowed by our regulators in our other ratemaking jurisdictions as well as the carrying costs associated with certain regulatory assets and liabilities.
Credit Risk
Credit risk represents the loss that would be recognized if counterparties should fail to perform as contracted. Exchange-traded contracts are supported by the financial and credit quality of the clearing members of the respective exchanges and carry only a nominal credit risk. In all other transactions, we are exposed to credit risk in the event of nonperformance by the counterparties to the transaction. See Note 7 – Derivative Financial Instruments under Part II, Item 8, of this report for information on the potential loss on counterparty exposure as of December 31, 2020.
Our revenues are primarily derived from sales or delivery of electricity and natural gas to customers in Missouri and Illinois. Our physical and financial instruments are subject to credit risk consisting of trade accounts receivables and executory contracts with market risk exposures. The risk associated with trade receivables is mitigated by the large number of customers in a broad range of industry groups who make up our customer base. At December 31, 2020, no nonaffiliated customer represented more than 10% of our accounts receivable. Additionally, Ameren Illinois faces risks associated with the purchase of receivables. The Illinois Public Utilities Act requires Ameren Illinois to establish electric utility consolidated billing and purchase of receivables services. At the option of an alternative retail electric supplier, Ameren Illinois may be required to purchase the supplier’s receivables relating to Ameren Illinois’ distribution customers who elected to receive power supply from the alternative retail electric supplier. When that option is selected, Ameren Illinois produces consolidated bills for the applicable retail customers to reflect charges for electric distribution and purchased receivables. As of December 31, 2020, Ameren Illinois’ balance of purchased accounts receivable associated with the utility consolidated billing and purchase of receivables services was $28 million. The risk associated with Ameren Illinois’ electric and natural gas trade receivables is also mitigated by a rider that allows Ameren Illinois to recover the difference between its actual net bad debt write-offs under GAAP and the amount of net bad debt write-offs included in its base rates. Ameren Missouri and Ameren Illinois continue to monitor the impact of increasing rates on customer collections, as applicable, and increasing customer account balances largely associated with the COVID-19 pandemic. Ameren Missouri and Ameren Illinois make adjustments to their respective allowance for doubtful accounts as deemed necessary to ensure that such allowances are adequate to cover estimated uncollectible customer account balances. See Note 1 – Summary of Significant Accounting Policies under Part II, Item 8, of this report for more information on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ accounts receivable balances that were 30 days or greater past due or that were a part of a deferred payment arrangement as of December 31, 2020. In addition, for information regarding Ameren Missouri’s and Ameren Illinois’ suspensions and reinstatement of customer disconnection activities and late fee charges for nonpayment, see Note 2 – Rate and Regulatory Matters under Part II, Item 8, of this report.
Investment Price Risk
Plan assets of the pension and postretirement trusts, the nuclear decommissioning trust fund, and company-owned life insurance contracts include equity and debt securities. The equity securities are exposed to price fluctuations in equity markets. The debt securities are exposed to changes in interest rates.
Our costs for providing defined benefit retirement and postretirement benefit plans are dependent upon a number of factors, including the rate of return on plan assets. Ameren manages plan assets in accordance with the “prudent investor” guidelines contained in ERISA. Ameren’s goal is to ensure that sufficient funds are available to provide benefits at the time they are payable, while also maximizing total return on plan assets and minimizing expense volatility consistent with its tolerance for risk. Ameren delegates investment management to specialists. Where appropriate, Ameren provides the investment manager with guidelines that specify allowable and prohibited investment types. Ameren regularly monitors manager performance and compliance with investment guidelines.
The expected return on plan assets assumption is based on historical and projected rates of return for current and planned asset classes in the investment portfolio. Projected rates of return for each asset class are estimated after an analysis of historical experience, future expectations, and the volatility of the various asset classes. After considering the target asset allocation for each asset class, we adjust the overall expected rate of return for the portfolio for historical and expected experience of active portfolio management results compared with benchmark returns, and for the effect of expenses paid from plan assets. Contributions to the plans and future costs could increase materially if we do not achieve pension and postretirement asset portfolio investment returns equal to or in excess of our 2021 assumed return on plan assets of 6.50%.
Ameren Missouri also maintains a trust fund, as required by the NRC and Missouri law, to fund certain costs of nuclear plant decommissioning. As of December 31, 2020, this fund was invested in domestic equity securities (69%) and debt securities (30%). By
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maintaining a portfolio that includes long-term equity investments, Ameren Missouri seeks to maximize the returns to be used to fund nuclear decommissioning costs within acceptable parameters of risk. Ameren Missouri actively monitors the portfolio by benchmarking the performance of its investments against certain indices and by maintaining and periodically reviewing established target allocation percentages of the trust assets to various investment options. Ameren Missouri’s exposure to equity price market risk is in large part mitigated because Ameren Missouri is currently allowed to recover its decommissioning costs, which would include unfavorable investment results, through electric rates.
Additionally, Ameren and Ameren Illinois have company-owned life insurance contracts with net asset values of $165 million and $8 million, respectively, as of December 31, 2020. Changes in the market values of these contracts are reflected in earnings.
Commodity Price Risk
Ameren Missouri’s and Ameren Illinois’ electric and natural gas distribution businesses’ exposure to changing market prices for commodities is in large part mitigated by the fact that there are cost recovery mechanisms in place. These cost recovery mechanisms allow Ameren Missouri and Ameren Illinois to pass on to retail customers prudently incurred costs for fuel, purchased power, and natural gas supply.
Ameren Missouri’s and Ameren Illinois’ strategy is designed to reduce the effect of market fluctuations for their customers. The effects of price volatility cannot be eliminated. However, procurement and sales strategies involve risk management techniques and instruments, as well as the management of physical assets.
Ameren Missouri has a FAC that allows it to recover or refund, through customer rates, 95% of the variance in net energy costs from the amount set in base rates without a traditional regulatory rate review, subject to MoPSC prudence reviews. Ameren Missouri remains exposed to the remaining 5% of such changes.
Ameren Illinois has cost recovery mechanisms for power purchased, capacity, zero emission credit, and renewable energy credit costs and expects full recovery of such costs. Ameren Illinois is required to serve as the provider of last resort for electric customers in its service territory who have not chosen an alternative retail electric supplier. In 2020, Ameren Illinois procured power on behalf of its customers for 23% of its total kilowatthour sales. Ameren Illinois purchases energy and capacity through the MISO and through bilateral contracts resulting from IPA procurement events. The IPA has proposed and the ICC has approved multiple procurement events covering portions of years through 2023 for capacity and energy. Ameren Illinois has also entered into ICC-approved contracts for zero emission credits through 2026 and for renewable energy credits with various terms, including contracts with a 20-year term ending 2032, and contracts entered into beginning 2018 with 15-year terms commencing on the date of first renewable energy credit delivery. Ameren Illinois does not generate earnings based on the resale of power or purchase of zero emission credits or renewable energy credits but rather on the delivery of the energy.
Ameren Missouri and Ameren Illinois have PGA clauses that permit costs incurred for natural gas to be recovered directly from utility customers without a traditional regulatory rate review, subject to prudence reviews.
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The following table presents, as of December 31, 2020, the percentages of the projected required supply of coal and coal transportation for Ameren Missouri’s coal-fired energy centers, nuclear fuel for Ameren Missouri’s Callaway Energy Center, natural gas for Ameren Missouri’s retail distribution, and purchased power for Ameren Illinois that are price-hedged over the period 2021 through 2025. The projected required supply of these commodities could be significantly affected by changes in our assumptions about customer demand for our electric generation and our electric and natural gas distribution services, generation output, and inventory levels, among other matters.
202120222023 – 2025
Ameren:
Coal100 %87 %39 %
Coal transportation100 99 98 
Nuclear fuel(a)
— 82 53 
Natural gas for distribution(b)
73 31 10 
Purchased power for Ameren Illinois(c)
69 35 11 
Ameren Missouri:
Coal100 %87 %39 %
Coal transportation100 99 98 
Nuclear fuel(a)
— 82 53 
Natural gas for distribution(b)
68 36 21 
Ameren Illinois:
Natural gas for distribution(b)
73 %30 %%
Purchased power(c)
69 35 11 
(a)The Callaway Energy Center has historically required refueling at 18-month intervals. 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 has begun to replace certain key components of the generator in order to return the energy center to service. As of the date of this filing, due to the long lead time for the manufacture, repair, and installation of these components, the energy center is expected to return to service in late June or early July 2021. As there are no refuelings scheduled to occur during 2021 or 2024, there are also no nuclear fuel deliveries anticipated to occur in these years.
(b)Represents the percentage of natural gas price-hedged for peak winter season of November through March. The year 2021 represents January 2021 through March 2021. The year 2022 represents November 2021 through March 2022. This continues each successive year through March 2025.
(c)Represents the percentage of purchased power price-hedged for fixed-price residential and nonresidential customers with less than 150 kilowatts of demand.
Our exposure to commodity price risk for construction and maintenance activities is related to changes in market prices for metal commodities and to labor availability.
Also see Note 14 – Commitments and Contingencies under Part II, Item 8, of this report for additional information.
Commodity Supplier Risk
The use of low-sulfur coal is part of Ameren Missouri’s environmental compliance strategy. Ameren Missouri has agreements with multiple suppliers to purchase low-sulfur coal through 2025 to comply with environmental regulations. Disruptions to the deliveries of low-sulfur coal from a supplier could compromise Ameren Missouri’s ability to operate in compliance with emission standards. The suppliers of low-sulfur coal are limited, and the construction of pollution control equipment requires significant lead time. In addition, low-sulfur coal suppliers have experienced financial hardships in recent years and could continue to experience financial hardships that could impact their ability to deliver shipments of low-sulfur coal in accordance with existing supply contracts. If Ameren Missouri were to experience a temporary disruption of low-sulfur coal deliveries that caused it to exhaust its existing inventory, and if other sources of low-sulfur coal were not available, Ameren Missouri would have to use its existing emission allowances, purchase emission allowances to achieve compliance with environmental regulations, or purchase power necessary to meet demand.
Currently, the Callaway Energy Center has a single NRC-licensed supplier able to provide fuel assemblies to the Callaway Energy Center. Ameren Missouri is pursuing a program to qualify an alternate NRC-licensed supplier, and expects to obtain NRC approval in 2023.
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ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
of Ameren Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Ameren Corporation and its subsidiaries (the “Company”) as of December 31, 2020 and 2019, and the related consolidated statements of income and comprehensive income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedules listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Regulation
As described in Notes 1 and 2 to the consolidated financial statements, the Company has operations that are subject to the decisions and requirements of its regulators. The Company’s use of accounting guidance for rate-regulated businesses results in recording regulatory assets and liabilities for certain transactions that management expects will be recovered from or returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. As of December 31, 2020, the Company’s consolidated balance sheet reflected $1.2 billion of regulatory assets and $5.4 billion of regulatory liabilities. As disclosed by management, in some cases, management must apply judgment related to the probability of recovery if regulatory balances are recorded before approval has been received from the regulator or probability of refund of amounts collected in rates that may be returned to customers. Additionally, management recognizes revenue for alternative revenue programs that allow for an automatic rate adjustment, are probable of recovery, and are collected within 24 months of the end of the annual period in which they are recognized. Management’s conclusions are based on certain factors including, but not limited to, regulatory commission orders, legislation, or historical experience, as well as management’s discussions with legal counsel.
The principal considerations for our determination that performing procedures relating to accounting for the effects of regulation is a critical audit matter are the significant judgment by management when accounting for (i) new or existing regulatory assets or liabilities that were impacted by updates in regulatory commission orders, legislation, historical experience, or management’s discussions with legal counsel, (ii) the probability of recovery of regulatory assets and refund of regulatory liabilities recorded before approval has been received from the regulator, and (iii) regulatory mechanisms meeting the alternative revenue program criteria, which in turn led to a high degree of auditor judgment, subjectivity, and effort when performing audit procedures and evaluating audit evidence obtained related to management’s application of regulatory accounting, assessment of probability of recovery of regulatory assets and refund of regulatory liabilities, and expected timing of collection within 24 months of the end of the annual period in which mechanisms are recognized.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s implementation and application of new or existing regulatory assets or liabilities, including controls related to evaluating the probability of recovery of regulatory assets and refund of regulatory liabilities, and alternative revenue programs. These procedures also included, among others, (i) testing calculations of new and existing regulatory assets or liabilities by comparison to provisions and formulas outlined in regulatory commission orders, legislation, or external legal counsel correspondence, (ii) evaluating management’s assessment of the probability of recovery of regulatory assets and refund of regulatory liabilities, and (iii) evaluating management’s assessment of regulatory mechanisms meeting the alternative revenue program criteria and the expected timing of collection within 24 months of the end of the annual period in which mechanisms are recognized.
/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri
February 22, 2021
We have served as the Company’s auditor since at least 1932. We have not been able to determine the specific year we began serving as auditor of the Company.
75

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
of Union Electric Company
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Union Electric Company (the “Company”) as of December 31, 2020 and 2019, and the related statements of income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Regulation
As described in Notes 1 and 2 to the financial statements, the Company has operations that are subject to the decisions and requirements of its regulators. The Company’s use of accounting guidance for rate-regulated businesses results in recording regulatory assets and liabilities for certain transactions that management expects will be recovered from or returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. As of December 31, 2020, the Company’s balance sheet reflected $0.4 billion of regulatory assets and $3.1 billion of regulatory liabilities. As disclosed by management, in some cases, management must apply judgment related to the probability of recovery if regulatory balances are recorded before approval has been received from the regulator or probability of refund of amounts collected in rates that may be returned to customers. Management’s conclusions are based on certain factors including, but not limited to, regulatory commission orders, legislation, or historical experience, as well as management’s discussions with legal counsel.
The principal considerations for our determination that performing procedures relating to accounting for the effects of regulation is a critical audit matter are the significant judgment by management when accounting for (i) new or existing regulatory assets or liabilities that were impacted by updates in regulatory commission orders, legislation, historical experience, or management’s discussions with legal counsel, and (ii) the probability of recovery of regulatory assets and refund of regulatory liabilities recorded before approval has been received from the regulator, which in turn led to a high degree of auditor judgment, subjectivity, and audit effort when performing audit procedures and
76

evaluating audit evidence obtained related to management’s application of regulatory accounting and assessment of probability of recovery of regulatory assets and refund of regulatory liabilities.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to management’s implementation and application of new or existing regulatory assets or liabilities, including controls related to evaluating the probability of recovery of regulatory assets and refund of regulatory liabilities. These procedures also included, among others, (i) testing calculations of new and existing regulatory assets or liabilities by comparison to provisions and formulas outlined in regulatory commission orders, legislation, or external legal counsel correspondence, and (ii) evaluating management’s assessment of the probability of recovery of regulatory assets and refund of regulatory liabilities.
/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri
February 22, 2021
We have served as the Company’s auditor since at least 1932. We have not been able to determine the specific year we began serving as auditor of the Company.
77

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders
of Ameren Illinois Company
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Ameren Illinois Company (the “Company”) as of December 31, 2020 and 2019, and the related statements of income, of shareholders’ equity and of cash flows for each of the three years in the period ended December 31, 2020, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Accounting for the Effects of Regulation
As described in Notes 1 and 2 to the financial statements, the Company has operations that are subject to the decisions and requirements of its regulators. The Company’s use of accounting guidance for rate-regulated businesses results in recording regulatory assets and liabilities for certain transactions that management expects will be recovered from or returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. As of December 31, 2020, the Company’s balance sheet reflected $0.8 billion of regulatory assets and $2.2 billion of regulatory liabilities. As disclosed by management, in some cases, management must apply judgment related to the probability of recovery if regulatory balances are recorded before approval has been received from the regulator or probability of refund of amounts collected in rates that may be returned to customers. Additionally, management recognizes revenue for alternative revenue programs that allow for an automatic rate adjustment, are probable of recovery, and are collected within 24 months of the end of the annual period in which they are recognized. Management’s conclusions are based on certain factors including, but not limited to, regulatory commission orders, legislation, or historical experience, as well as management’s discussions with legal counsel.
The principal considerations for our determination that performing procedures relating to accounting for the effects of regulation is a critical audit matter are the significant judgment by management when accounting for (i) new or existing regulatory assets or liabilities that were impacted by updates in regulatory commission orders, legislation, historical experience, or management’s discussions with legal counsel, (ii) the probability of recovery of regulatory assets and refund of regulatory liabilities recorded before approval has been received from the regulator, and (iii) regulatory mechanisms meeting the alternative revenue program criteria, which in turn led to a high degree of auditor
78

judgment, subjectivity, and effort when performing audit procedures and evaluating audit evidence obtained related to management’s application of regulatory accounting, assessment of probability of recovery of regulatory assets and refund of regulatory liabilities, and expected timing of collection within 24 months of the end of the annual period in which mechanisms are recognized.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. These procedures included testing the effectiveness of controls relating to management’s implementation and application of new or existing regulatory assets or liabilities, including controls related to evaluating the probability of recovery of regulatory assets and refund of regulatory liabilities, and alternative revenue programs. These procedures also included, among others, (i) testing calculations of new and existing regulatory assets or liabilities by comparison to provisions and formulas outlined in regulatory commission orders, legislation, or external legal counsel correspondence, (ii) evaluating management’s assessment of the probability of recovery of regulatory assets and refund of regulatory liabilities, and (iii) evaluating management’s assessment of regulatory mechanisms meeting the alternative revenue program criteria and the expected timing of collection within 24 months of the end of the annual period in which mechanisms are recognized.
/s/ PricewaterhouseCoopers LLP

St. Louis, Missouri
February 22, 2021
We have served as the Company’s auditor since 1998.
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AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(In millions, except per share amounts)
 Year Ended December 31,
 202020192018
Operating Revenues:
Electric$4,911 $4,981 $5,339 
Natural gas883 929 952 
Total operating revenues5,794 5,910 6,291 
Operating Expenses:
Fuel490 535 769 
Purchased power513 556 581 
Natural gas purchased for resale272 331 374 
Other operations and maintenance1,661 1,745 1,772 
Depreciation and amortization1,075 995 955 
Taxes other than income taxes483 481 483 
Total operating expenses4,494 4,643 4,934 
Operating Income1,300 1,267 1,357 
Other Income, Net151 130 102 
Interest Charges419 381 401 
Income Before Income Taxes1,032 1,016 1,058 
Income Taxes155 182 237 
Net Income877 834 821 
Less: Net Income Attributable to Noncontrolling Interests6 
Net Income Attributable to Ameren Common Shareholders$871 $828 $815 
Net Income$877 $834 $821 
Other Comprehensive Income (Loss), Net of Taxes
Pension and other postretirement benefit plan activity, net of income taxes (benefit) of $5, $1, and $(1), respectively16 (4)
Comprehensive Income893 839 817 
Less: Comprehensive Income Attributable to Noncontrolling Interests6 
Comprehensive Income Attributable to Ameren Common Shareholders$887 $833 $811 
Earnings per Common Share – Basic$3.53 $3.37 $3.34 
Earnings per Common Share – Diluted$3.50 $3.35 $3.32 
Weighted-average Common Shares Outstanding – Basic247.0 245.6 243.8 
Weighted-average Common Shares Outstanding – Diluted248.7 247.1 245.8 
The accompanying notes are an integral part of these consolidated financial statements.
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AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(In millions, except per share amounts)
 December 31,
 20202019
ASSETS
Current Assets:
Cash and cash equivalents$139 $16 
Accounts receivable – trade (less allowance for doubtful accounts of $50 and $17, respectively)415 393 
Unbilled revenue269 278 
Miscellaneous accounts receivable65 63 
Inventories521 494 
Current regulatory assets109 69 
Other current assets135 118 
Total current assets1,653 1,431 
Property, Plant, and Equipment, Net26,807 24,376 
Investments and Other Assets:
Nuclear decommissioning trust fund982 847 
Goodwill411 411 
Regulatory assets1,100 992 
Other assets1,077 876 
Total investments and other assets3,570 3,126 
TOTAL ASSETS$32,030 $28,933 
LIABILITIES AND EQUITY
Current Liabilities:
Current maturities of long-term debt$8 $442 
Short-term debt490 440 
Accounts and wages payable958 874 
Interest accrued114 94 
Current regulatory liabilities121 164 
Other current liabilities489 491 
Total current liabilities2,180 2,505 
Long-term Debt, Net11,078 8,915 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net3,211 2,919 
Regulatory liabilities5,282 4,887 
Asset retirement obligations696 638 
Pension and other postretirement benefits37 401 
Other deferred credits and liabilities466 467 
Total deferred credits and other liabilities9,692 9,312 
Commitments and Contingencies (Notes 2, 9, and 14)00
Ameren Corporation Shareholders’ Equity:
Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 253.3 and 246.2, respectively3 
Other paid-in capital, principally premium on common stock6,179 5,694 
Retained earnings2,757 2,380 
Accumulated other comprehensive loss(1)(17)
Total Ameren Corporation shareholders’ equity8,938 8,059 
Noncontrolling Interests142 142 
Total equity9,080 8,201 
TOTAL LIABILITIES AND EQUITY$32,030 $28,933 
The accompanying notes are an integral part of these consolidated financial statements.
81


AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
 Year Ended December 31,
 202020192018
Cash Flows From Operating Activities:
Net income$877 $834 $821 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization1,085 1,002 938 
Amortization of nuclear fuel68 79 95 
Amortization of debt issuance costs and premium/discounts22 19 20 
Deferred income taxes and investment tax credits, net148 167 224 
Allowance for equity funds used during construction(32)(28)(36)
Stock-based compensation costs21 20 20 
Other22 (14)44 
Changes in assets and liabilities:
Receivables(47)79 (24)
Inventories(25)(10)39 
Accounts and wages payable40 (3)(22)
Taxes accrued34 (8)(10)
Regulatory assets and liabilities(254)164 201 
Assets, other(83)(59)
Liabilities, other(111)(33)(117)
Pension and other postretirement benefits(38)(39)(25)
Net cash provided by operating activities1,727 2,170 2,170 
Cash Flows From Investing Activities:
Capital expenditures(2,669)(2,411)(2,286)
Wind generation expenditures(564)
Nuclear fuel expenditures(66)(31)(52)
Purchases of securities – nuclear decommissioning trust fund(224)(256)(315)
Sales and maturities of securities – nuclear decommissioning trust fund183 260 299 
Purchase of bonds0 (207)
Proceeds from sale of remarketed bonds0 207 
Other11 18 
Net cash used in investing activities(3,329)(2,435)(2,336)
Cash Flows From Financing Activities:
Dividends on common stock(494)(472)(451)
Dividends paid to noncontrolling interest holders(6)(6)(6)
Short-term debt, net50 (157)112 
Maturities of long-term debt(442)(580)(841)
Issuances of long-term debt2,183 1,527 1,352 
Issuances of common stock476 68 74 
Employee payroll taxes related to stock-based compensation(20)(29)(19)
Debt issuance costs(20)(17)(14)
Other0 (2)
Net cash provided by financing activities1,727 334 205 
Net change in cash, cash equivalents, and restricted cash125 69 39 
Cash, cash equivalents, and restricted cash at beginning of year176 107 68 
Cash, cash equivalents, and restricted cash at end of year$301 $176 $107 
Cash Paid During the Year:
Interest (net of $16, $20, and $21 capitalized, respectively)$383 $367 $387 
Income taxes, net13 13 21 
The accompanying notes are an integral part of these consolidated financial statements.
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AMEREN CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(In millions)
December 31,
202020192018
Common Stock:
Beginning of year$2 $$
Settlement of forward sale agreement through common shares issuance1 — 
Common stock, end of year3 
Other Paid-in Capital:
Beginning of year5,694 5,627 5,540 
Settlement of forward sale agreement through common shares issuance424 
Shares issued under the DRPlus and 401(k) plan51 68 74 
Stock-based compensation activity10 (1)13 
Other paid-in capital, end of year6,179 5,694 5,627 
Retained Earnings:
Beginning of year2,380 2,024 1,660 
Net income attributable to Ameren common shareholders871 828 815 
Dividends on common stock(494)(472)(451)
Retained earnings, end of year2,757 2,380 2,024 
Accumulated Other Comprehensive Loss:
Deferred retirement benefit costs, beginning of year(17)(22)(18)
Change in deferred retirement benefit costs16 (4)
Deferred retirement benefit costs, end of year(1)(17)(22)
Total accumulated other comprehensive loss, end of year(1)(17)(22)
Total Ameren Corporation Shareholders’ Equity$8,938 $8,059 $7,631 
Noncontrolling Interests:
Beginning of year142 142 142 
Net income attributable to noncontrolling interest holders6 
Dividends paid to noncontrolling interest holders(6)(6)(6)
Noncontrolling interests, end of year142 142 142 
Total Equity$9,080 $8,201 $7,773 
Common stock shares outstanding at beginning of year246.2 244.5 242.6 
Shares issued under forward sale agreement5.9 0 
Shares issued under the DRPlus and 401(k) plan0.7 0.9 1.2 
Shares issued for stock-based compensation0.5 0.8 0.7 
Common stock shares outstanding at end of year253.3 246.2 244.5 
Dividends per common share$2.0000 $1.9200 $1.8475 
The accompanying notes are an integral part of these consolidated financial statements.
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UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF INCOME
(In millions)
 Year Ended December 31,
 202020192018
Operating Revenues:
Electric$2,984 $3,109 $3,451 
Natural gas125 134 138 
Total operating revenues3,109 3,243 3,589 
Operating Expenses:
Fuel490 535 769 
Purchased power171 193 164 
Natural gas purchased for resale43 53 56 
Other operations and maintenance886 960 972 
Depreciation and amortization604 556 550 
Taxes other than income taxes328 329 329 
Total operating expenses2,522 2,626 2,840 
Operating Income587 617 749 
Other Income, Net76 58 56 
Interest Charges190 178 200 
Income Before Income Taxes473 497 605 
Income Taxes34 68 124 
Net Income439 429 481 
Preferred Stock Dividends3 
Net Income Available to Common Shareholder$436 $426 $478 
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
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UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
BALANCE SHEET
(In millions, except per share amounts)
 December 31,
 20202019
ASSETS
Current Assets:
Cash and cash equivalents$136 $
Advances to money pool139 
Accounts receivable – trade (less allowance for doubtful accounts of $16 and $7, respectively)166 164 
Accounts receivable – affiliates57 30 
Unbilled revenue133 139 
Miscellaneous accounts receivable36 33 
Inventories386 373 
Current regulatory assets60 
Other current assets79 58 
Total current assets1,192 814 
Property, Plant, and Equipment, Net13,879 12,635 
Investments and Other Assets:
Nuclear decommissioning trust fund982 847 
Regulatory assets347 285 
Other assets383 356 
Total investments and other assets1,712 1,488 
TOTAL ASSETS$16,783 $14,937 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt$8 $92 
Short-term debt0 234 
Accounts and wages payable501 465 
Accounts payable – affiliates46 52 
Taxes accrued42 24 
Interest accrued53 48 
Current asset retirement obligations60 53 
Current regulatory liabilities26 62 
Other current liabilities97 96 
Total current liabilities833 1,126 
Long-term Debt, Net5,096 4,098 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes and investment tax credits, net1,742 1,612 
Regulatory liabilities3,110 2,937 
Asset retirement obligations691 634 
Pension and other postretirement benefits35 141 
Other deferred credits and liabilities66 40 
Total deferred credits and other liabilities5,644 5,364 
Commitments and Contingencies (Notes 2, 9, 13, and 14)00
Shareholders’ Equity:
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding511 511 
Other paid-in capital, principally premium on common stock2,518 2,027 
Preferred stock80 80 
Retained earnings2,101 1,731 
Total shareholders’ equity5,210 4,349 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$16,783 $14,937 
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
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UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF CASH FLOWS
(In millions)
 Year Ended December 31,
 202020192018
Cash Flows From Operating Activities:
Net income$439 $429 $481 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization613 564 533 
Amortization of nuclear fuel68 79 95 
Amortization of debt issuance costs and premium/discounts6 
Deferred income taxes and investment tax credits, net17 (19)(9)
Allowance for equity funds used during construction(19)(19)(27)
Other22 13 17 
Changes in assets and liabilities:
Receivables(8)75 (32)
Inventories(11)(13)30 
Accounts and wages payable26 16 (21)
Taxes accrued9 (15)(1)
Regulatory assets and liabilities(166)17 201 
Assets, other(2)(28)
Liabilities, other(80)(32)(13)
Pension and other postretirement benefits(3)(5)(2)
Net cash provided by operating activities911 1,067 1,260 
Cash Flows From Investing Activities:
Capital expenditures(1,102)(1,076)(914)
Wind generation expenditures(564)
Nuclear fuel expenditures(66)(31)(52)
Purchases of securities – nuclear decommissioning trust fund(224)(256)(315)
Sales and maturities of securities – nuclear decommissioning trust fund183 260 299 
Purchase of bonds0 (207)
Proceeds from sale of remarketed bonds0 207 
Money pool advances, net(139)
Other8 
Net cash used in investing activities(1,904)(1,095)(976)
Cash Flows From Financing Activities:
Dividends on common stock(66)(430)(375)
Dividends on preferred stock(3)(3)(3)
Short-term debt, net(234)179 16 
Maturities of long-term debt(92)(580)(384)
Issuances of long-term debt1,012 778 423 
Debt issuance costs(9)(9)(5)
Capital contribution from parent491 124 45 
Net cash provided by (used in) financing activities1,099 59 (283)
Net change in cash, cash equivalents, and restricted cash106 31 
Cash, cash equivalents, and restricted cash at beginning of year39 
Cash, cash equivalents, and restricted cash at end of year$145 $39 $
Cash Paid During the Year: