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.
OVERVIEW
Our core strategy is driven by the following three pillars:
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Investing in and operating our utilities in a manner consistent with existing regulatory frameworks
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Enhancing regulatory frameworks and advocating for responsible energy and economic policies
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Creating and capitalizing on opportunities for investment for the benefit of our customers and shareholders
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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.
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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.
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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.
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Customer Rates, (¢/KWH)(e)
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Rate Base ($ in billions)(a)
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Constructive Regulatory Frameworks(c)
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TSR 2015-2020(f)
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Segment
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Regulatory Framework
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Ameren
Transmission
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Formula ratemaking
Allowed ROE is 10.52%
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Ameren Illinois
Natural Gas
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Future test year ratemaking and QIP, PGA, VBA
Allowed ROE is 9.67%
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Ameren Illinois
Electric Distribution
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Formula ratemaking
Allowed ROE is 30-year U.S. Treasury + 5.8%
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Ameren
Missouri
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Historical test year ratemaking and
PISA, RESRAM, FAC, MEEIA
Allowed ROE is 9.4% - 9.8%(d)
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(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
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
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.
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:
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2020 Capital Expenditures by Segment
(Total Ameren – $3.2 billion)
(in billions)
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Midpoint of 2021 – 2025 Projected Capital
Expenditures by Segment (Total Ameren – $17.1 billion)
(in billions)
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Ameren Missouri(a)
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Ameren Illinois Natural Gas
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Ameren Illinois Electric Distribution
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Ameren Transmission
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(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 $17.8 billion. The following table presents the range of projected spending by segment:
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Range (in billions)
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Ameren Missouri(a)
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$
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8.7
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–
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$
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9.3
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Ameren Illinois Electric Distribution
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2.6
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–
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2.8
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Ameren Illinois Natural Gas
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1.7
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–
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1.8
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Ameren Transmission
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3.5
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–
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3.8
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Ameren(a)
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$
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16.4
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–
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$
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17.8
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(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
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:
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2020 versus 2019
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Estimated 2021 versus 2020
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Ameren Missouri Customer Class
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Residential
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3.0
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%
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1
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%
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Commercial
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(7.0)
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%
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2
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%
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Industrial
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(2.1)
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%
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3
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%
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Total
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(2.2)
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%
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2
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%
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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:
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2020
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2019
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Net income attributable to Ameren common shareholders
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$
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871
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$
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828
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Earnings per common share – diluted
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3.50
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3.35
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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.
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.
Below is Ameren’s table of income statement components by segment for the years ended December 31, 2020 and 2019:
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2020
|
Ameren Missouri
|
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Ameren
Illinois
Electric
Distribution
|
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Ameren
Illinois
Natural Gas
|
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Ameren Transmission
|
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Other /
Intersegment
Eliminations
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Ameren
|
Electric margins
|
$
|
2,323
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|
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$
|
1,091
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$
|
—
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$
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523
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$
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(29)
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$
|
3,908
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Natural gas margins
|
82
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—
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531
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—
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(2)
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611
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|
|
|
|
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, net
|
76
|
|
|
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 margins
|
81
|
|
|
—
|
|
|
519
|
|
|
—
|
|
|
(2)
|
|
|
598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other operations and maintenance expenses
|
(960)
|
|
|
(498)
|
|
|
(233)
|
|
|
(60)
|
|
|
6
|
|
|
(1,745)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
(556)
|
|
|
(273)
|
|
|
(78)
|
|
|
(84)
|
|
|
(4)
|
|
|
(995)
|
|
Taxes other than income taxes
|
(329)
|
|
|
(73)
|
|
|
(67)
|
|
|
(4)
|
|
|
(8)
|
|
|
(481)
|
|
Other income, net
|
58
|
|
|
33
|
|
|
12
|
|
|
8
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below is Ameren Illinois’ table of income statement components by segment for the years ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Illinois Transmission
|
|
|
|
Ameren 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, net
|
33
|
|
|
13
|
|
|
13
|
|
|
|
|
59
|
|
Interest charges
|
(72)
|
|
|
(41)
|
|
|
(42)
|
|
|
|
|
(155)
|
|
Income taxes
|
(42)
|
|
|
(36)
|
|
|
(46)
|
|
|
|
|
(124)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
144
|
|
|
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, net
|
33
|
|
|
12
|
|
|
8
|
|
|
|
|
53
|
|
Interest charges
|
(71)
|
|
|
(38)
|
|
|
(38)
|
|
|
|
|
(147)
|
|
Income taxes
|
(45)
|
|
|
(30)
|
|
|
(35)
|
|
|
|
|
(110)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
147
|
|
|
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.
Electric Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment(a)
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $18 Million)
|
|
(a)Includes other/intersegment eliminations of $(29) million and $(29) million in 2020 and 2019, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Transmission
|
|
|
Other/Intersegment Eliminations
|
|
Natural Gas Margins
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment(a)
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $13 Million)
|
|
(a)Includes other/intersegment eliminations of $(2) million and $(2) million in 2020 and 2019, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
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 2019
|
Ameren
Missouri
|
|
Ameren Illinois
Electric Distribution
|
|
Ameren Illinois
Natural Gas
|
|
Ameren
Transmission(a)
|
|
Other /
Intersegment
Eliminations
|
|
Ameren
|
|
|
|
|
|
Electric revenue change:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of weather (estimate)(b)
|
$
|
(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 sales
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
|
|
|
|
Customer late fees and reconnection fees
|
(4)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4)
|
|
|
|
|
|
|
Energy-efficiency program investments
|
—
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|
|
|
|
|
Transmission service revenues
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
|
|
|
|
Other
|
(1)
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
6
|
|
|
|
|
|
|
Cost recovery mechanisms – offset in fuel and purchased power(d)
|
(4)
|
|
|
(23)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(27)
|
|
|
|
|
|
|
Other cost recovery mechanisms(e)
|
2
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
Total electric revenue change
|
$
|
(125)
|
|
|
$
|
(6)
|
|
|
$
|
—
|
|
|
$
|
59
|
|
|
$
|
2
|
|
|
$
|
(70)
|
|
|
|
|
|
|
Fuel and purchased power change:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy costs (excluding the estimated effect of weather)
|
$
|
(34)
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(34)
|
|
|
|
|
|
|
Effect of weather (estimate)(b)
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
|
|
|
|
Effect of lower net energy costs included in base rates
|
92
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92
|
|
|
|
|
|
|
Transmission service charges
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
|
|
|
|
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
(2)
|
|
|
|
|
|
|
Cost recovery mechanisms – offset in electric revenue(d)
|
4
|
|
|
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
|
3
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
|
|
|
|
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)
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
|
|
|
|
Cost recovery mechanisms – offset in natural gas revenue(d)
|
6
|
|
|
—
|
|
|
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
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.
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)
|
|
(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 Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
|
Other/Intersegment Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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.
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.
Depreciation and Amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment(a)
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $80 Million)
|
|
(a)Includes other/intersegment eliminations of $4 million and $4 million in 2020 and 2019, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
|
Other/Intersegment Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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.
Taxes Other Than Income Taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment(a)
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $2 Million)
|
|
(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 Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
|
Other/Intersegment Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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.
Other Income, Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $21 Million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
|
Other/Intersegment Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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.
Interest Charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total by Segment
|
|
Increase (Decrease) by Segment
|
|
|
|
(Overall Ameren Increase of $38 Million)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
Ameren Illinois Natural Gas
|
|
|
Other/Intersegment Eliminations
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
|
Ameren
|
15%
|
|
18%
|
|
|
|
Ameren Missouri
|
7%
|
|
14%
|
|
|
|
Ameren Illinois
|
24%
|
|
24%
|
|
|
|
Ameren Illinois Electric Distribution
|
22%
|
|
23%
|
|
|
|
Ameren Illinois Natural Gas
|
26%
|
|
26%
|
|
|
|
Ameren Illinois Transmission
|
25%
|
|
24%
|
|
|
|
Ameren Transmission
|
26%
|
|
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.
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
|
|
2020
|
|
2019
|
|
|
Variance
|
|
2020
|
|
2019
|
|
|
Variance
|
|
2020
|
|
2019
|
|
|
Variance
|
Ameren
|
$
|
1,727
|
|
|
$
|
2,170
|
|
|
|
$
|
(443)
|
|
|
$
|
(3,329)
|
|
|
$
|
(2,435)
|
|
|
|
$
|
(894)
|
|
|
$
|
1,727
|
|
|
$
|
334
|
|
|
|
$
|
1,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
911
|
|
|
1,067
|
|
|
|
(156)
|
|
|
(1,904)
|
|
|
(1,095)
|
|
|
|
(809)
|
|
|
1,099
|
|
|
59
|
|
|
|
1,040
|
|
Ameren Illinois
|
679
|
|
|
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.
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
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.
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri(b)
|
|
Ameren Illinois Natural Gas
|
|
ATXI and other electric transmission subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren 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.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2022-2025
|
|
Total
|
Ameren Missouri
|
$
|
2,205
|
|
|
$
|
6,450
|
|
–
|
$
|
7,130
|
|
|
$
|
8,655
|
|
–
|
$
|
9,335
|
|
Ameren Illinois Electric Distribution
|
515
|
|
|
2,060
|
|
–
|
2,280
|
|
|
2,575
|
|
–
|
2,795
|
|
Ameren Illinois Natural Gas
|
335
|
|
|
1,315
|
|
–
|
1,450
|
|
|
1,650
|
|
–
|
1,785
|
|
Ameren Illinois Transmission
|
615
|
|
|
2,715
|
|
–
|
3,000
|
|
|
3,330
|
|
–
|
3,615
|
|
ATXI and Other Electric Transmission Subsidiaries
|
55
|
|
|
130
|
|
–
|
140
|
|
|
185
|
|
–
|
195
|
|
Other
|
5
|
|
|
20
|
|
–
|
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.
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 outstanding
|
|
315
|
|
|
|
|
Less: Letters of credit
|
|
3
|
|
Missouri Credit Agreement – subtotal
|
|
882
|
|
Ameren (parent) and Ameren Illinois(b):
|
|
|
Illinois Credit Agreement – borrowing capacity
|
|
1,100
|
|
Less: Ameren (parent) commercial paper outstanding
|
|
175
|
|
|
|
|
Less: Letters of credit
|
|
1
|
|
Illinois Credit Agreement – subtotal
|
|
924
|
|
Subtotal
|
|
$
|
1,806
|
|
Cash and cash equivalents
|
|
139
|
|
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.
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 Matured
|
|
2020
|
|
2019
|
|
|
Issuances of Long-term Debt
|
|
|
|
|
|
|
|
Ameren:
|
|
|
|
|
|
|
|
3.50% Senior unsecured notes due 2031
|
April
|
|
$
|
798
|
|
|
$
|
—
|
|
|
|
2.50% Senior unsecured notes due 2024
|
September
|
|
—
|
|
|
450
|
|
|
|
Ameren Missouri:
|
|
|
|
|
|
|
|
2.95% First mortgage bonds due 2030
|
March
|
|
465
|
|
|
—
|
|
|
|
2.625% First mortgage bonds due 2051 (green bonds)
|
October
|
|
547
|
|
|
—
|
|
|
|
3.50% First mortgage bonds due 2029
|
March
|
|
—
|
|
|
450
|
|
|
|
3.25% First mortgage bonds due 2049
|
October
|
|
—
|
|
|
328
|
|
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
1.55% First mortgage bonds due 2030
|
November
|
|
373
|
|
|
—
|
|
|
|
3.25% First mortgage bonds due 2050
|
November
|
|
—
|
|
|
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)
|
December
|
|
425
|
|
|
—
|
|
|
|
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 2020
|
October
|
|
$
|
350
|
|
|
$
|
—
|
|
|
|
Ameren Missouri:
|
|
|
|
|
|
|
|
5.00% Senior secured notes due 2020
|
February
|
|
85
|
|
|
—
|
|
|
|
6.70% Senior secured notes due 2019
|
February
|
|
—
|
|
|
329
|
|
|
|
5.10% Senior unsecured notes due 2019
|
October
|
|
—
|
|
|
244
|
|
|
|
5.45% First mortgage bonds due 2028
|
October
|
|
—
|
|
|
(d)
|
|
|
City of Bowling Green financing obligation (Peno Creek CT)
|
December
|
|
7
|
|
|
7
|
|
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
5.70% First mortgage bonds due 2024
|
September
|
|
—
|
|
|
(d)
|
|
|
5.90% First mortgage bonds due 2023
|
October
|
|
—
|
|
|
(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.
(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.
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:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
|
Ameren
|
$
|
494
|
|
|
$
|
472
|
|
|
|
Ameren Missouri
|
66
|
|
|
430
|
|
|
|
Ameren Illinois
|
9
|
|
|
—
|
|
|
|
ATXI
|
30
|
|
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2022 – 2023
|
|
2024 – 2025
|
|
2026 and Thereafter
|
|
Total
|
Ameren:
|
|
|
|
|
|
|
|
|
|
Long-term debt and financing obligations(a)
|
$
|
8
|
|
|
$
|
745
|
|
|
$
|
1,150
|
|
|
$
|
9,287
|
|
|
$
|
11,190
|
|
Interest payments
|
431
|
|
|
843
|
|
|
741
|
|
|
4,876
|
|
|
6,891
|
|
Operating leases
|
9
|
|
|
16
|
|
|
11
|
|
|
5
|
|
|
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)
|
$
|
8
|
|
|
$
|
295
|
|
|
$
|
350
|
|
|
$
|
4,499
|
|
|
$
|
5,152
|
|
Interest payments
|
216
|
|
|
427
|
|
|
358
|
|
|
2,412
|
|
|
3,413
|
|
Operating leases
|
8
|
|
|
14
|
|
|
10
|
|
|
5
|
|
|
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 payments
|
148
|
|
|
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.
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’s
|
S&P
|
Ameren:
|
|
|
Issuer/corporate credit rating
|
Baa1
|
BBB+
|
Senior unsecured debt
|
Baa1
|
BBB
|
Commercial paper
|
P-2
|
A-2
|
Ameren Missouri:
|
|
|
Issuer/corporate credit rating
|
Baa1
|
BBB+
|
Secured debt
|
A2
|
A
|
Senior unsecured debt
|
Baa1
|
Not Rated
|
Commercial paper
|
P-2
|
A-2
|
Ameren Illinois:
|
|
|
Issuer/corporate credit rating
|
A3
|
BBB+
|
Secured debt
|
A1
|
A
|
Senior unsecured debt
|
A3
|
BBB+
|
Commercial paper
|
P-2
|
A-2
|
ATXI:
|
|
|
Issuer credit rating
|
A2
|
Not Rated
|
Senior unsecured debt
|
A2
|
Not Rated
|
A credit rating is not a recommendation to buy, sell, or hold securities. It should be evaluated independently of any other rating. Ratings are subject to revision or withdrawal at any time by the rating organization.
Collateral Postings
Any weakening of our credit ratings may reduce access to capital and trigger additional collateral postings and prepayments. Such changes may also increase the cost of borrowing, resulting in an adverse effect on earnings. Cash collateral postings and prepayments made with external parties, including postings related to exchange-traded contracts, and cash collateral posted by external parties were immaterial at 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
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
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
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.
•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
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 Estimate
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Uncertainties Affecting Application
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Regulatory Mechanisms and Cost Recovery
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We defer costs and recognize revenues that we intend to collect in future rates.
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•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
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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 Estimate
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Uncertainties Affecting Application
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Benefit Plan Accounting
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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.
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•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
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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.
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Accounting Estimate
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Uncertainties Affecting Application
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Accounting for Contingencies
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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.
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•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
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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 Estimate
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Uncertainties Affecting Application
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Accounting for Income Taxes
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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.
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•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
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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.
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Accounting Estimate
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Uncertainties Affecting Application
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Accounting for Asset Retirement Obligations
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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.
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•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
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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.
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.
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
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.
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.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2022
|
|
2023 – 2025
|
Ameren:
|
|
|
|
|
|
Coal
|
100
|
%
|
|
87
|
%
|
|
39
|
%
|
Coal transportation
|
100
|
|
|
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:
|
|
|
|
|
|
Coal
|
100
|
%
|
|
87
|
%
|
|
39
|
%
|
Coal transportation
|
100
|
|
|
99
|
|
|
98
|
|
Nuclear fuel(a)
|
—
|
|
|
82
|
|
|
53
|
|
|
|
|
|
|
|
Natural gas for distribution(b)
|
68
|
|
|
36
|
|
|
21
|
|
Ameren Illinois:
|
|
|
|
|
|
Natural gas for distribution(b)
|
73
|
%
|
|
30
|
%
|
|
8
|
%
|
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.
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.
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.
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
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.
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
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.
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Operating Revenues:
|
|
|
|
|
|
Electric
|
$
|
4,911
|
|
|
$
|
4,981
|
|
|
$
|
5,339
|
|
Natural gas
|
883
|
|
|
929
|
|
|
952
|
|
Total operating revenues
|
5,794
|
|
|
5,910
|
|
|
6,291
|
|
Operating Expenses:
|
|
|
|
|
|
Fuel
|
490
|
|
|
535
|
|
|
769
|
|
Purchased power
|
513
|
|
|
556
|
|
|
581
|
|
Natural gas purchased for resale
|
272
|
|
|
331
|
|
|
374
|
|
Other operations and maintenance
|
1,661
|
|
|
1,745
|
|
|
1,772
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,075
|
|
|
995
|
|
|
955
|
|
Taxes other than income taxes
|
483
|
|
|
481
|
|
|
483
|
|
Total operating expenses
|
4,494
|
|
|
4,643
|
|
|
4,934
|
|
Operating Income
|
1,300
|
|
|
1,267
|
|
|
1,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net
|
151
|
|
|
130
|
|
|
102
|
|
Interest Charges
|
419
|
|
|
381
|
|
|
401
|
|
Income Before Income Taxes
|
1,032
|
|
|
1,016
|
|
|
1,058
|
|
Income Taxes
|
155
|
|
|
182
|
|
|
237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
877
|
|
|
834
|
|
|
821
|
|
Less: Net Income Attributable to Noncontrolling Interests
|
6
|
|
|
6
|
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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), respectively
|
16
|
|
|
5
|
|
|
(4)
|
|
Comprehensive Income
|
893
|
|
|
839
|
|
|
817
|
|
Less: Comprehensive Income Attributable to Noncontrolling Interests
|
6
|
|
|
6
|
|
|
6
|
|
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 – Basic
|
247.0
|
|
|
245.6
|
|
|
243.8
|
|
Weighted-average Common Shares Outstanding – Diluted
|
248.7
|
|
|
247.1
|
|
|
245.8
|
|
The accompanying notes are an integral part of these consolidated financial statements.
AMEREN CORPORATION
CONSOLIDATED BALANCE SHEET
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
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 revenue
|
269
|
|
|
278
|
|
Miscellaneous accounts receivable
|
65
|
|
|
63
|
|
Inventories
|
521
|
|
|
494
|
|
|
|
|
|
Current regulatory assets
|
109
|
|
|
69
|
|
|
|
|
|
Other current assets
|
135
|
|
|
118
|
|
|
|
|
|
Total current assets
|
1,653
|
|
|
1,431
|
|
Property, Plant, and Equipment, Net
|
26,807
|
|
|
24,376
|
|
Investments and Other Assets:
|
|
|
|
Nuclear decommissioning trust fund
|
982
|
|
|
847
|
|
Goodwill
|
411
|
|
|
411
|
|
|
|
|
|
Regulatory assets
|
1,100
|
|
|
992
|
|
Other assets
|
1,077
|
|
|
876
|
|
|
|
|
|
Total investments and other assets
|
3,570
|
|
|
3,126
|
|
TOTAL ASSETS
|
$
|
32,030
|
|
|
$
|
28,933
|
|
LIABILITIES AND EQUITY
|
|
|
|
Current Liabilities:
|
|
|
|
Current maturities of long-term debt
|
$
|
8
|
|
|
$
|
442
|
|
Short-term debt
|
490
|
|
|
440
|
|
Accounts and wages payable
|
958
|
|
|
874
|
|
|
|
|
|
Interest accrued
|
114
|
|
|
94
|
|
|
|
|
|
|
|
|
|
Current regulatory liabilities
|
121
|
|
|
164
|
|
Other current liabilities
|
489
|
|
|
491
|
|
|
|
|
|
Total current liabilities
|
2,180
|
|
|
2,505
|
|
|
|
|
|
Long-term Debt, Net
|
11,078
|
|
|
8,915
|
|
Deferred Credits and Other Liabilities:
|
|
|
|
Accumulated deferred income taxes and investment tax credits, net
|
3,211
|
|
|
2,919
|
|
|
|
|
|
Regulatory liabilities
|
5,282
|
|
|
4,887
|
|
Asset retirement obligations
|
696
|
|
|
638
|
|
Pension and other postretirement benefits
|
37
|
|
|
401
|
|
Other deferred credits and liabilities
|
466
|
|
|
467
|
|
|
|
|
|
Total deferred credits and other liabilities
|
9,692
|
|
|
9,312
|
|
Commitments and Contingencies (Notes 2, 9, and 14)
|
|
|
|
Ameren Corporation Shareholders’ Equity:
|
|
|
|
Common stock, $.01 par value, 400.0 shares authorized – shares outstanding of 253.3 and 246.2, respectively
|
3
|
|
|
2
|
|
Other paid-in capital, principally premium on common stock
|
6,179
|
|
|
5,694
|
|
Retained earnings
|
2,757
|
|
|
2,380
|
|
Accumulated other comprehensive loss
|
(1)
|
|
|
(17)
|
|
Total Ameren Corporation shareholders’ equity
|
8,938
|
|
|
8,059
|
|
Noncontrolling Interests
|
142
|
|
|
142
|
|
Total equity
|
9,080
|
|
|
8,201
|
|
TOTAL LIABILITIES AND EQUITY
|
$
|
32,030
|
|
|
$
|
28,933
|
|
The accompanying notes are an integral part of these consolidated financial statements.
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
Net income
|
$
|
877
|
|
|
$
|
834
|
|
|
$
|
821
|
|
|
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
1,085
|
|
|
1,002
|
|
|
938
|
|
Amortization of nuclear fuel
|
68
|
|
|
79
|
|
|
95
|
|
Amortization of debt issuance costs and premium/discounts
|
22
|
|
|
19
|
|
|
20
|
|
Deferred income taxes and investment tax credits, net
|
148
|
|
|
167
|
|
|
224
|
|
Allowance for equity funds used during construction
|
(32)
|
|
|
(28)
|
|
|
(36)
|
|
Stock-based compensation costs
|
21
|
|
|
20
|
|
|
20
|
|
|
|
|
|
|
|
Other
|
22
|
|
|
(14)
|
|
|
44
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Receivables
|
(47)
|
|
|
79
|
|
|
(24)
|
|
Inventories
|
(25)
|
|
|
(10)
|
|
|
39
|
|
Accounts and wages payable
|
40
|
|
|
(3)
|
|
|
(22)
|
|
Taxes accrued
|
34
|
|
|
(8)
|
|
|
(10)
|
|
Regulatory assets and liabilities
|
(254)
|
|
|
164
|
|
|
201
|
|
Assets, other
|
(83)
|
|
|
(59)
|
|
|
2
|
|
Liabilities, other
|
(111)
|
|
|
(33)
|
|
|
(117)
|
|
Pension and other postretirement benefits
|
(38)
|
|
|
(39)
|
|
|
(25)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
1,727
|
|
|
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 fund
|
183
|
|
|
260
|
|
|
299
|
|
Purchase of bonds
|
—
|
|
|
(207)
|
|
|
—
|
|
Proceeds from sale of remarketed bonds
|
—
|
|
|
207
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
11
|
|
|
3
|
|
|
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, net
|
50
|
|
|
(157)
|
|
|
112
|
|
|
|
|
|
|
|
Maturities of long-term debt
|
(442)
|
|
|
(580)
|
|
|
(841)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuances of long-term debt
|
2,183
|
|
|
1,527
|
|
|
1,352
|
|
Issuances of common stock
|
476
|
|
|
68
|
|
|
74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee payroll taxes related to stock-based compensation
|
(20)
|
|
|
(29)
|
|
|
(19)
|
|
Debt issuance costs
|
(20)
|
|
|
(17)
|
|
|
(14)
|
|
Other
|
—
|
|
|
—
|
|
|
(2)
|
|
Net cash provided by financing activities
|
1,727
|
|
|
334
|
|
|
205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents, and restricted cash
|
125
|
|
|
69
|
|
|
39
|
|
Cash, cash equivalents, and restricted cash at beginning of year
|
176
|
|
|
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, net
|
13
|
|
|
13
|
|
|
21
|
|
The accompanying notes are an integral part of these consolidated financial statements.
AMEREN CORPORATION
CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
|
2018
|
Common Stock:
|
|
|
|
|
|
Beginning of year
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
2
|
|
Settlement of forward sale agreement through common shares issuance
|
1
|
|
|
—
|
|
|
—
|
|
Common stock, end of year
|
3
|
|
|
2
|
|
|
2
|
|
|
|
|
|
|
|
Other Paid-in Capital:
|
|
|
|
|
|
Beginning of year
|
5,694
|
|
|
5,627
|
|
|
5,540
|
|
Settlement of forward sale agreement through common shares issuance
|
424
|
|
|
—
|
|
|
—
|
|
Shares issued under the DRPlus and 401(k) plan
|
51
|
|
|
68
|
|
|
74
|
|
Stock-based compensation activity
|
10
|
|
|
(1)
|
|
|
13
|
|
|
|
|
|
|
|
Other paid-in capital, end of year
|
6,179
|
|
|
5,694
|
|
|
5,627
|
|
|
|
|
|
|
|
Retained Earnings:
|
|
|
|
|
|
Beginning of year
|
2,380
|
|
|
2,024
|
|
|
1,660
|
|
Net income attributable to Ameren common shareholders
|
871
|
|
|
828
|
|
|
815
|
|
Dividends on common stock
|
(494)
|
|
|
(472)
|
|
|
(451)
|
|
|
|
|
|
|
|
Retained earnings, end of year
|
2,757
|
|
|
2,380
|
|
|
2,024
|
|
|
|
|
|
|
|
Accumulated Other Comprehensive Loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred retirement benefit costs, beginning of year
|
(17)
|
|
|
(22)
|
|
|
(18)
|
|
Change in deferred retirement benefit costs
|
16
|
|
|
5
|
|
|
(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 year
|
142
|
|
|
142
|
|
|
142
|
|
Net income attributable to noncontrolling interest holders
|
6
|
|
|
6
|
|
|
6
|
|
Dividends paid to noncontrolling interest holders
|
(6)
|
|
|
(6)
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interests, end of year
|
142
|
|
|
142
|
|
|
142
|
|
Total Equity
|
$
|
9,080
|
|
|
$
|
8,201
|
|
|
$
|
7,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock shares outstanding at beginning of year
|
246.2
|
|
|
244.5
|
|
|
242.6
|
|
Shares issued under forward sale agreement
|
5.9
|
|
|
—
|
|
|
—
|
|
Shares issued under the DRPlus and 401(k) plan
|
0.7
|
|
|
0.9
|
|
|
1.2
|
|
Shares issued for stock-based compensation
|
0.5
|
|
|
0.8
|
|
|
0.7
|
|
Common stock shares outstanding at end of year
|
253.3
|
|
|
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.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF INCOME
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Operating Revenues:
|
|
|
|
|
|
Electric
|
$
|
2,984
|
|
|
$
|
3,109
|
|
|
$
|
3,451
|
|
Natural gas
|
125
|
|
|
134
|
|
|
138
|
|
|
|
|
|
|
|
Total operating revenues
|
3,109
|
|
|
3,243
|
|
|
3,589
|
|
Operating Expenses:
|
|
|
|
|
|
Fuel
|
490
|
|
|
535
|
|
|
769
|
|
Purchased power
|
171
|
|
|
193
|
|
|
164
|
|
Natural gas purchased for resale
|
43
|
|
|
53
|
|
|
56
|
|
Other operations and maintenance
|
886
|
|
|
960
|
|
|
972
|
|
|
|
|
|
|
|
Depreciation and amortization
|
604
|
|
|
556
|
|
|
550
|
|
Taxes other than income taxes
|
328
|
|
|
329
|
|
|
329
|
|
Total operating expenses
|
2,522
|
|
|
2,626
|
|
|
2,840
|
|
Operating Income
|
587
|
|
|
617
|
|
|
749
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net
|
76
|
|
|
58
|
|
|
56
|
|
Interest Charges
|
190
|
|
|
178
|
|
|
200
|
|
Income Before Income Taxes
|
473
|
|
|
497
|
|
|
605
|
|
Income Taxes
|
34
|
|
|
68
|
|
|
124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
439
|
|
|
429
|
|
|
481
|
|
Preferred Stock Dividends
|
3
|
|
|
3
|
|
|
3
|
|
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.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
BALANCE SHEET
(In millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash equivalents
|
$
|
136
|
|
|
$
|
9
|
|
Advances to money pool
|
139
|
|
|
—
|
|
Accounts receivable – trade (less allowance for doubtful accounts of $16 and $7, respectively)
|
166
|
|
|
164
|
|
Accounts receivable – affiliates
|
57
|
|
|
30
|
|
Unbilled revenue
|
133
|
|
|
139
|
|
Miscellaneous accounts receivable
|
36
|
|
|
33
|
|
Inventories
|
386
|
|
|
373
|
|
Current regulatory assets
|
60
|
|
|
8
|
|
Other current assets
|
79
|
|
|
58
|
|
Total current assets
|
1,192
|
|
|
814
|
|
Property, Plant, and Equipment, Net
|
13,879
|
|
|
12,635
|
|
Investments and Other Assets:
|
|
|
|
Nuclear decommissioning trust fund
|
982
|
|
|
847
|
|
|
|
|
|
Regulatory assets
|
347
|
|
|
285
|
|
Other assets
|
383
|
|
|
356
|
|
Total investments and other assets
|
1,712
|
|
|
1,488
|
|
TOTAL ASSETS
|
$
|
16,783
|
|
|
$
|
14,937
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
Current Liabilities:
|
|
|
|
Current maturities of long-term debt
|
$
|
8
|
|
|
$
|
92
|
|
|
|
|
|
Short-term debt
|
—
|
|
|
234
|
|
Accounts and wages payable
|
501
|
|
|
465
|
|
Accounts payable – affiliates
|
46
|
|
|
52
|
|
Taxes accrued
|
42
|
|
|
24
|
|
Interest accrued
|
53
|
|
|
48
|
|
Current asset retirement obligations
|
60
|
|
|
53
|
|
Current regulatory liabilities
|
26
|
|
|
62
|
|
Other current liabilities
|
97
|
|
|
96
|
|
Total current liabilities
|
833
|
|
|
1,126
|
|
Long-term Debt, Net
|
5,096
|
|
|
4,098
|
|
Deferred Credits and Other Liabilities:
|
|
|
|
Accumulated deferred income taxes and investment tax credits, net
|
1,742
|
|
|
1,612
|
|
|
|
|
|
Regulatory liabilities
|
3,110
|
|
|
2,937
|
|
Asset retirement obligations
|
691
|
|
|
634
|
|
Pension and other postretirement benefits
|
35
|
|
|
141
|
|
Other deferred credits and liabilities
|
66
|
|
|
40
|
|
Total deferred credits and other liabilities
|
5,644
|
|
|
5,364
|
|
Commitments and Contingencies (Notes 2, 9, 13, and 14)
|
|
|
|
Shareholders’ Equity:
|
|
|
|
Common stock, $5 par value, 150.0 shares authorized – 102.1 shares outstanding
|
511
|
|
|
511
|
|
Other paid-in capital, principally premium on common stock
|
2,518
|
|
|
2,027
|
|
Preferred stock
|
80
|
|
|
80
|
|
Retained earnings
|
2,101
|
|
|
1,731
|
|
Total shareholders’ equity
|
5,210
|
|
|
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.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF CASH FLOWS
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
Net income
|
$
|
439
|
|
|
$
|
429
|
|
|
$
|
481
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
613
|
|
|
564
|
|
|
533
|
|
Amortization of nuclear fuel
|
68
|
|
|
79
|
|
|
95
|
|
|
|
|
|
|
|
Amortization of debt issuance costs and premium/discounts
|
6
|
|
|
5
|
|
|
6
|
|
Deferred income taxes and investment tax credits, net
|
17
|
|
|
(19)
|
|
|
(9)
|
|
Allowance for equity funds used during construction
|
(19)
|
|
|
(19)
|
|
|
(27)
|
|
Other
|
22
|
|
|
13
|
|
|
17
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Receivables
|
(8)
|
|
|
75
|
|
|
(32)
|
|
Inventories
|
(11)
|
|
|
(13)
|
|
|
30
|
|
Accounts and wages payable
|
26
|
|
|
16
|
|
|
(21)
|
|
Taxes accrued
|
9
|
|
|
(15)
|
|
|
(1)
|
|
Regulatory assets and liabilities
|
(166)
|
|
|
17
|
|
|
201
|
|
Assets, other
|
(2)
|
|
|
(28)
|
|
|
2
|
|
Liabilities, other
|
(80)
|
|
|
(32)
|
|
|
(13)
|
|
Pension and other postretirement benefits
|
(3)
|
|
|
(5)
|
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
911
|
|
|
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 fund
|
183
|
|
|
260
|
|
|
299
|
|
Purchase of bonds
|
—
|
|
|
(207)
|
|
|
—
|
|
Proceeds from sale of remarketed bonds
|
—
|
|
|
207
|
|
|
—
|
|
Money pool advances, net
|
(139)
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
Other
|
8
|
|
|
8
|
|
|
6
|
|
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 debt
|
1,012
|
|
|
778
|
|
|
423
|
|
Debt issuance costs
|
(9)
|
|
|
(9)
|
|
|
(5)
|
|
Capital contribution from parent
|
491
|
|
|
124
|
|
|
45
|
|
|
|
|
|
|
|
Net cash provided by (used in) financing activities
|
1,099
|
|
|
59
|
|
|
(283)
|
|
Net change in cash, cash equivalents, and restricted cash
|
106
|
|
|
31
|
|
|
1
|
|
Cash, cash equivalents, and restricted cash at beginning of year
|
39
|
|
|
8
|
|
|
7
|
|
Cash, cash equivalents, and restricted cash at end of year
|
$
|
145
|
|
|
$
|
39
|
|
|
$
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Paid During the Year:
|
|
|
|
|
|
Interest (net of $10, $12, and $14 capitalized, respectively)
|
$
|
190
|
|
|
$
|
190
|
|
|
$
|
196
|
|
Income taxes, net
|
25
|
|
|
101
|
|
|
128
|
|
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
UNION ELECTRIC COMPANY (d/b/a AMEREN MISSOURI)
STATEMENT OF SHAREHOLDERS’ EQUITY
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
|
2018
|
Common Stock
|
$
|
511
|
|
|
$
|
511
|
|
|
$
|
511
|
|
|
|
|
|
|
|
Other Paid-in Capital:
|
|
|
|
|
|
Beginning of year
|
2,027
|
|
|
1,903
|
|
|
1,858
|
|
Capital contribution from parent
|
491
|
|
|
124
|
|
|
45
|
|
|
|
|
|
|
|
Other paid-in capital, end of year
|
2,518
|
|
|
2,027
|
|
|
1,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock
|
80
|
|
|
80
|
|
|
80
|
|
|
|
|
|
|
|
Retained Earnings:
|
|
|
|
|
|
Beginning of year
|
1,731
|
|
|
1,735
|
|
|
1,632
|
|
Net income
|
439
|
|
|
429
|
|
|
481
|
|
Dividends on common stock
|
(66)
|
|
|
(430)
|
|
|
(375)
|
|
Dividends on preferred stock
|
(3)
|
|
|
(3)
|
|
|
(3)
|
|
Retained earnings, end of year
|
2,101
|
|
|
1,731
|
|
|
1,735
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
$
|
5,210
|
|
|
$
|
4,349
|
|
|
$
|
4,229
|
|
The accompanying notes as they relate to Ameren Missouri are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF INCOME
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Operating Revenues:
|
|
|
|
|
|
Electric
|
$
|
1,775
|
|
|
$
|
1,730
|
|
|
$
|
1,761
|
|
Natural gas
|
760
|
|
|
797
|
|
|
815
|
|
|
|
|
|
|
|
Total operating revenues
|
2,535
|
|
|
2,527
|
|
|
2,576
|
|
Operating Expenses:
|
|
|
|
|
|
Purchased power
|
355
|
|
|
368
|
|
|
429
|
|
Natural gas purchased for resale
|
229
|
|
|
278
|
|
|
318
|
|
Other operations and maintenance
|
775
|
|
|
782
|
|
|
799
|
|
Depreciation and amortization
|
434
|
|
|
406
|
|
|
374
|
|
Taxes other than income taxes
|
140
|
|
|
143
|
|
|
144
|
|
Total operating expenses
|
1,933
|
|
|
1,977
|
|
|
2,064
|
|
Operating Income
|
602
|
|
|
550
|
|
|
512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income, Net
|
59
|
|
|
53
|
|
|
42
|
|
Interest Charges
|
155
|
|
|
147
|
|
|
149
|
|
Income Before Income Taxes
|
506
|
|
|
456
|
|
|
405
|
|
Income Taxes
|
124
|
|
|
110
|
|
|
98
|
|
Net Income
|
382
|
|
|
346
|
|
|
307
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock Dividends
|
3
|
|
|
3
|
|
|
3
|
|
Net Income Available to Common Shareholder
|
$
|
379
|
|
|
$
|
343
|
|
|
$
|
304
|
|
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
BALANCE SHEET
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
ASSETS
|
|
|
|
Current Assets:
|
|
|
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
Accounts receivable – trade (less allowance for doubtful accounts of $34 and $10, respectively)
|
234
|
|
|
215
|
|
Accounts receivable – affiliates
|
64
|
|
|
28
|
|
Unbilled revenue
|
136
|
|
|
139
|
|
Miscellaneous accounts receivable
|
12
|
|
|
25
|
|
Inventories
|
135
|
|
|
121
|
|
Current regulatory assets
|
37
|
|
|
57
|
|
|
|
|
|
Other current assets
|
29
|
|
|
29
|
|
Total current assets
|
647
|
|
|
614
|
|
Property, Plant, and Equipment, Net
|
11,201
|
|
|
10,083
|
|
Investments and Other Assets:
|
|
|
|
Goodwill
|
411
|
|
|
411
|
|
Regulatory assets
|
742
|
|
|
694
|
|
Other assets
|
534
|
|
|
383
|
|
Total investments and other assets
|
1,687
|
|
|
1,488
|
|
TOTAL ASSETS
|
$
|
13,535
|
|
|
$
|
12,185
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
Short-term debt
|
$
|
—
|
|
|
$
|
53
|
|
Borrowings from money pool
|
19
|
|
|
—
|
|
Accounts and wages payable
|
363
|
|
|
299
|
|
Accounts payable – affiliates
|
51
|
|
|
82
|
|
|
|
|
|
|
|
|
|
Customer deposits
|
74
|
|
|
77
|
|
|
|
|
|
|
|
|
|
Current regulatory liabilities
|
88
|
|
|
84
|
|
Other current liabilities
|
221
|
|
|
249
|
|
Total current liabilities
|
816
|
|
|
844
|
|
Long-term Debt, Net
|
3,946
|
|
|
3,575
|
|
Deferred Credits and Other Liabilities:
|
|
|
|
Accumulated deferred income taxes and investment tax credits, net
|
1,367
|
|
|
1,224
|
|
|
|
|
|
Regulatory liabilities
|
2,063
|
|
|
1,849
|
|
Pension and other postretirement benefits
|
69
|
|
|
214
|
|
Environmental remediation
|
57
|
|
|
87
|
|
Other deferred credits and liabilities
|
251
|
|
|
260
|
|
Total deferred credits and other liabilities
|
3,807
|
|
|
3,634
|
|
Commitments and Contingencies (Notes 2, 13, and 14)
|
|
|
|
Shareholders’ Equity:
|
|
|
|
Common stock, no par value, 45.0 shares authorized – 25.5 shares outstanding
|
—
|
|
|
—
|
|
Other paid-in capital
|
2,652
|
|
|
2,188
|
|
Preferred stock
|
62
|
|
|
62
|
|
Retained earnings
|
2,252
|
|
|
1,882
|
|
|
|
|
|
Total shareholders’ equity
|
4,966
|
|
|
4,132
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
13,535
|
|
|
$
|
12,185
|
|
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF CASH FLOWS
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
2020
|
|
2019
|
|
2018
|
Cash Flows From Operating Activities:
|
|
|
|
|
|
Net income
|
$
|
382
|
|
|
$
|
346
|
|
|
$
|
307
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation and amortization
|
434
|
|
|
405
|
|
|
375
|
|
Amortization of debt issuance costs and premium/discounts
|
12
|
|
|
12
|
|
|
13
|
|
Deferred income taxes and investment tax credits, net
|
118
|
|
|
80
|
|
|
88
|
|
Other
|
8
|
|
|
7
|
|
|
11
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
Receivables
|
(28)
|
|
|
11
|
|
|
—
|
|
Inventories
|
(15)
|
|
|
2
|
|
|
8
|
|
Accounts and wages payable
|
15
|
|
|
(19)
|
|
|
(13)
|
|
Taxes accrued
|
(23)
|
|
|
21
|
|
|
(13)
|
|
Regulatory assets and liabilities
|
(72)
|
|
|
155
|
|
|
1
|
|
Assets, other
|
(76)
|
|
|
(23)
|
|
|
(1)
|
|
Liabilities, other
|
(46)
|
|
|
(5)
|
|
|
(92)
|
|
Pension and other postretirement benefits
|
(30)
|
|
|
(30)
|
|
|
(25)
|
|
Net cash provided by operating activities
|
679
|
|
|
962
|
|
|
659
|
|
Cash Flows From Investing Activities:
|
|
|
|
|
|
Capital expenditures
|
(1,447)
|
|
|
(1,208)
|
|
|
(1,258)
|
|
|
|
|
|
|
|
Other
|
3
|
|
|
3
|
|
|
10
|
|
Net cash used in investing activities
|
(1,444)
|
|
|
(1,205)
|
|
|
(1,248)
|
|
Cash Flows From Financing Activities:
|
|
|
|
|
|
Dividends on common stock
|
(9)
|
|
|
—
|
|
|
—
|
|
Dividends on preferred stock
|
(3)
|
|
|
(3)
|
|
|
(3)
|
|
Short-term debt, net
|
(53)
|
|
|
(19)
|
|
|
10
|
|
Money pool borrowings, net
|
19
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
Maturities of long-term debt
|
—
|
|
|
—
|
|
|
(457)
|
|
|
|
|
|
|
|
Issuances of long-term debt
|
373
|
|
|
299
|
|
|
929
|
|
Debt issuance costs
|
(4)
|
|
|
(4)
|
|
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital contribution from parent
|
464
|
|
|
15
|
|
|
160
|
|
Other
|
—
|
|
|
—
|
|
|
(2)
|
|
Net cash provided by financing activities
|
787
|
|
|
288
|
|
|
628
|
|
Net change in cash, cash equivalents, and restricted cash
|
22
|
|
|
45
|
|
|
39
|
|
Cash, cash equivalents, and restricted cash at beginning of year
|
125
|
|
|
80
|
|
|
41
|
|
Cash, cash equivalents, and restricted cash at end of year
|
$
|
147
|
|
|
$
|
125
|
|
|
$
|
80
|
|
|
|
|
|
|
|
Cash Paid During the Year:
|
|
|
|
|
|
Interest (net of $6, $8, and $7 capitalized, respectively)
|
$
|
137
|
|
|
$
|
127
|
|
|
$
|
144
|
|
Income taxes, net
|
41
|
|
|
4
|
|
|
28
|
|
|
|
|
|
|
|
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN ILLINOIS COMPANY (d/b/a AMEREN ILLINOIS)
STATEMENT OF SHAREHOLDERS’ EQUITY
(In millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
2020
|
|
2019
|
|
2018
|
Common Stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
Other Paid-in Capital:
|
|
|
|
|
|
Beginning of year
|
2,188
|
|
|
2,173
|
|
|
2,013
|
|
Capital contribution from parent
|
464
|
|
|
15
|
|
|
160
|
|
|
|
|
|
|
|
Other paid-in capital, end of year
|
2,652
|
|
|
2,188
|
|
|
2,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock
|
62
|
|
|
62
|
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retained Earnings:
|
|
|
|
|
|
Beginning of year
|
1,882
|
|
|
1,539
|
|
|
1,235
|
|
Net income
|
382
|
|
|
346
|
|
|
307
|
|
Dividends on common stock
|
(9)
|
|
|
—
|
|
|
—
|
|
Dividends on preferred stock
|
(3)
|
|
|
(3)
|
|
|
(3)
|
|
|
|
|
|
|
|
Retained earnings, end of year
|
2,252
|
|
|
1,882
|
|
|
1,539
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Shareholders’ Equity
|
$
|
4,966
|
|
|
$
|
4,132
|
|
|
$
|
3,774
|
|
The accompanying notes as they relate to Ameren Illinois are an integral part of these financial statements.
AMEREN CORPORATION (Consolidated)
UNION ELECTRIC COMPANY (d/b/a Ameren Missouri)
AMEREN ILLINOIS COMPANY (d/b/a Ameren Illinois)
COMBINED NOTES TO FINANCIAL STATEMENTS December 31, 2020
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Ameren, headquartered in St. Louis, Missouri, is a public utility holding company whose primary assets are its equity interests in its subsidiaries. Ameren’s subsidiaries are separate, independent legal entities with separate businesses, assets, and liabilities. Dividends on Ameren’s common stock and the payment of expenses by Ameren depend on distributions made to it by its subsidiaries. Ameren’s principal subsidiaries are listed below. Ameren also has other subsidiaries that conduct other activities, such as providing shared services.
•Union Electric Company, doing business as Ameren Missouri, operates a rate-regulated electric generation, transmission, and distribution business and a rate-regulated natural gas distribution business in Missouri. Ameren Missouri was incorporated in Missouri in 1922 and is successor to a number of companies, the oldest of which was organized in 1881. It is the largest electric utility in the state of Missouri. It supplies electric and natural gas service to a 24,000-square-mile area in central and eastern Missouri, which includes the Greater St. Louis area. Ameren Missouri supplies electric service to 1.2 million customers and natural gas service to 0.1 million customers.
•Ameren Illinois Company, doing business as Ameren Illinois, operates rate-regulated electric transmission, electric distribution, and natural gas distribution businesses in Illinois. Ameren Illinois was incorporated in Illinois in 1923 and is the successor to a number of companies, the oldest of which was organized in 1902. Ameren Illinois supplies electric and natural gas utility service to a 43,700 square mile area in central and southern Illinois. Ameren Illinois supplies electric service to 1.2 million customers and natural gas service to 0.8 million customers.
•Ameren Transmission Company of Illinois, doing business as ATXI, operates a FERC rate-regulated electric transmission business in the MISO. ATXI was incorporated in Illinois in 2006. In December 2020, ATXI completed construction of the ninth and final line segment of the Illinois Rivers transmission line, a MISO-approved electric transmission line. ATXI also operates the Spoon River and Mark Twain transmission lines, which were placed in service in February 2018 and December 2019, respectively.
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.
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. 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. 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. 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. 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. For information regarding Ameren Missouri’s and Ameren Illinois’ suspension and subsequent reinstatement of customer disconnections and late fee charges for nonpayment and Ameren Missouri’s requests for accounting authority orders related to the COVID-19 pandemic, see Note 2 – Rate and Regulatory Matters below.
The Coronavirus Aid, Relief, and Economic Security Act is a federal law enacted in March 2020. Provisions in the act include temporary changes to the utilization of net operating losses, deferral of the payment of the employer portion of Social Security taxes, and additional funding for customer energy assistance, among other things. As of December 31, 2020, the implementation of the act by the Ameren Companies had no material impact to their financial statements.
Ameren’s financial statements are prepared on a consolidated basis and therefore include the accounts of its majority-owned subsidiaries. All intercompany transactions have been eliminated, except as disclosed in Note 13 – Related-party Transactions. Ameren Missouri and Ameren Illinois have no subsidiaries. All tabular dollar amounts are in millions, unless otherwise indicated.
Our accounting policies conform to GAAP. Our financial statements reflect all adjustments (which include normal, recurring adjustments) that are necessary, in our opinion, for a fair presentation of our results. The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. Such estimates and assumptions affect reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of financial statements, and the reported amounts of revenues and expenses during the reported periods. Actual results could differ from those estimates.
Regulation
Our customer rates are regulated by the MoPSC, the ICC, and the FERC. We defer certain costs as assets pursuant to actions of rate regulators or because of expectations that we will be able to recover such costs in future rates charged to customers. We also defer certain amounts as liabilities pursuant to actions of rate regulators or based on the expectation that such amounts will be returned to customers in future rates. Regulatory assets and liabilities are amortized consistent with the period of expected regulatory treatment. See Note 2 – Rate and Regulatory Matters for additional information on our regulatory frameworks, regulatory recovery mechanisms, and regulatory assets and liabilities recorded at December 31, 2020 and 2019.
We continually assess the recoverability of our respective regulatory assets. Regulatory assets are charged to earnings when it is no longer probable that such amounts will be recovered through future revenues. To the extent that reductions in customers’ rates or refunds to customers related to regulatory liabilities are no longer probable, the amounts are credited to earnings.
Cash, Cash Equivalents, and Restricted Cash
Cash and cash equivalents include short-term, highly liquid investments purchased with an original maturity of three months or less. Cash and cash equivalents subject to legal or contractual restrictions and not readily available for use for general corporate purposes are classified as restricted cash. See Note 15 – Supplemental Information for a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows.
Allowance for Doubtful Accounts Receivable
The allowance for doubtful accounts represents our estimate of existing accounts receivable that will ultimately be uncollectible. The allowance is calculated by applying estimated loss factors to various classes of outstanding receivables, including unbilled revenue. The loss factors used to estimate uncollectible accounts are based upon both historical collections experience and management’s estimate of future collections success given the existing and anticipated future collections environment. Ameren Illinois has bad debt riders that adjust rates for net write-offs of customer accounts receivable above or below those being collected in rates. In 2020, the rider for electric distribution allowed for recovery of bad debt expense recognized under GAAP. See Note 2 – Rate and Regulatory Matters for additional information.
Inventories
Inventories are recorded at the lower of weighted-average cost or net realizable value. Inventories are capitalized when purchased and then expensed as consumed or capitalized as property, plant, and equipment when installed, as appropriate. See Note 15 – Supplemental Information for the components of inventories.
Property, Plant, and Equipment, Net
We capitalize the cost of additions to, and betterments of, units of property, plant, and equipment. The cost includes labor, material, applicable taxes, and overhead. An allowance for funds used during construction, as discussed below, is also capitalized as a cost of our rate-regulated assets. Maintenance expenditures are expensed as incurred. Beginning in 2020, maintenance expenses related to scheduled Callaway nuclear refueling and maintenance outages, which were previously expensed as incurred, are deferred and amortized over the number of expected months until the completion of the next refueling outage, which historically has been approximately 18 months. When units of depreciable property are retired, the original costs, and the associated removal cost, net of salvage, are charged to accumulated depreciation. If environmental expenditures are related to assets currently in use, as in the case of the installation of pollution control equipment, the cost is capitalized and depreciated over the expected life of the asset. See Asset Retirement Obligations section below and Note 3 – Property, Plant, and Equipment, Net for additional information.
Ameren Missouri’s cost of nuclear fuel is capitalized as a part of “Property, Plant, and Equipment, Net” on the balance sheet and then amortized to “Operating Expenses – Fuel” in the statement of income on a unit-of-production basis.
Depreciation
Depreciation is provided over the estimated lives of the various classes of depreciable property by applying composite rates on a straight-line basis to the cost basis of such property. The composite rates include a provision for the estimated removal cost of property, plant, and equipment retired from service, net of salvage. The provision for depreciation for the Ameren Companies in 2020, 2019, and 2018 ranged from 3% to 4% of the average depreciable cost. See Note 3 – Property, Plant, and Equipment, Net for additional information on estimated depreciable lives.
Allowance for Funds Used During Construction
As a part of “Property, Plant, and Equipment, Net” on the balance sheet, we capitalize allowance for funds used during construction, which is the cost of borrowed funds and the cost of equity funds (preferred and common shareholders’ equity) applicable to eligible rate-regulated construction work in progress, in accordance with the utility industry’s accounting practice and GAAP. The amount of allowance for funds used during construction is calculated using a FERC-prescribed formula based on a rate, which incorporates the average cost of short-term debt, the average cost of long-term debt, and the cost of equity funds. The portion attributable to borrowed funds is recorded as a reduction of “Interest Charges” on the statements of income. The portion attributable to equity funds is recorded within “Other Income, Net” on the statements of income. This accounting practice offsets the effect on earnings of the cost of financing during construction. See Note 15 – Supplemental Information for the amount of allowance for funds used during construction capitalized and the average rate applied to eligible construction work in progress.
Allowance for funds used during construction does not represent a current source of cash funds. Under accepted ratemaking practice, cash recovery of allowance for funds used during construction and other construction costs occurs when completed projects are placed in service and reflected in customer rates.
Goodwill
Goodwill represents the excess of the purchase price of an acquisition over the fair value of the net assets acquired. Ameren and Ameren Illinois had goodwill of $411 million at December 31, 2020 and 2019. Ameren has four reporting units: Ameren Missouri, Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Transmission. Ameren Illinois has three reporting units: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission. Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission had goodwill of $238 million, $80 million, and $93 million, respectively, at December 31, 2020 and 2019. The Ameren Transmission reporting unit had the same $93 million of goodwill as the Ameren Illinois Transmission reporting unit at December 31, 2020 and 2019.
Ameren and Ameren Illinois evaluate goodwill for impairment in each of their reporting units as of October 31 each year, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of their reporting units below their carrying amounts. To determine whether the fair value of a reporting unit is more likely than not greater than its carrying amount, Ameren and Ameren Illinois elect to perform either a qualitative assessment or to bypass the qualitative assessment and perform a quantitative test.
Ameren and Ameren Illinois elected to perform a qualitative assessment for their annual goodwill impairment test conducted as of October 31, 2020. As part of this qualitative assessment, Ameren and Ameren Illinois evaluated, among other things, macroeconomic conditions, industry and market considerations such as observable industry market multiples, regulatory frameworks, cost factors, overall financial performance, and entity-specific events. The results of Ameren’s and Ameren Illinois’ qualitative assessment indicated that it was more likely than not that the fair value of each reporting unit exceeded its carrying value as of October 31, 2020, resulting in no impairment of Ameren’s or Ameren Illinois’ goodwill.
Impairment of Long-lived Assets
We evaluate long-lived assets classified as held and used for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Whether an impairment has occurred is determined by comparing the estimated undiscounted cash flows attributable to the assets to the carrying value of the assets. If the carrying value exceeds the undiscounted cash flows, we recognize an impairment charge equal to the amount by which the carrying value exceeds the estimated fair value of the assets. In the period in which we determine that an asset meets held for sale criteria, we record an impairment charge to the extent the book value exceeds its estimated fair value less cost to sell. We did not identify any events or changes in circumstances that indicated that the carrying value of long-lived assets may not be recoverable in 2020 or 2019.
Variable Interest Entities
As of December 31, 2020 and 2019, Ameren had unconsolidated variable interests as a limited partner in various equity method investments, totaling $37 million and $28 million, respectively, included in “Other assets” on Ameren’s consolidated balance sheet. Ameren is not the primary beneficiary of these investments because it does not have the power to direct matters that most significantly affect the activities of these variable interest entities. As of December 31, 2020, the maximum exposure to loss related to these variable interest entities is limited to the investment in these partnerships of $37 million plus associated outstanding funding commitments of $35 million.
Environmental Costs
Liabilities for environmental costs are recorded on an undiscounted basis when it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated. Costs are expensed or deferred as a regulatory asset when it is expected that the costs will be recovered from customers in future rates. See Note 14 – Commitments and Contingencies for additional information on liabilities for environmental costs.
Asset Retirement Obligations
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. Asset book values, reflected within “Property, Plant, and Equipment, Net” on the balance sheet, are depreciated over the remaining useful life of the related asset. Due to regulatory recovery, that depreciation is deferred as a regulatory balance. The depreciation of the asset book values at Ameren Missouri was $28 million, $18 million, and $14 million for the years ended December 31, 2020, 2019, and 2018, respectively, which was deferred as a reduction to the net regulatory liability. The net regulatory liability also reflects a deferral for the nuclear decommissioning trust fund balance for the Callaway Energy Center. The depreciation deferred to the regulatory asset at Ameren Illinois was immaterial in each respective period. Uncertainties as to the probability, timing, or amount of cash expenditures associated with AROs affect our estimates of fair value. Ameren and Ameren Missouri have recorded AROs for retirement costs associated with decommissioning of Ameren Missouri’s Callaway and High Prairie Renewable energy centers, CCR facilities, and river structures. Additionally, Ameren, Ameren Missouri, and Ameren Illinois have recorded AROs for retirement costs associated with asbestos removal and the disposal of certain transformers. See Note 15 – Supplemental Information for a reconciliation of the beginning and ending carrying amounts of AROs.
Estimated funds collected from customers to pay for the future removal cost of property, plant, and equipment retired from service, net of salvage, represent a cost of removal regulatory liability. See the cost of removal regulatory liability balance in Note 2 – Rate and Regulatory Matters.
Company-owned Life Insurance
Ameren and Ameren Illinois have company-owned life insurance, which is recorded at the net cash surrender value. The net cash surrender value is the amount that can be realized under the insurance policies at the balance sheet date. As of December 31, 2020, the cash surrender value of company-owned life insurance at Ameren and Ameren Illinois was $272 million (December 31, 2019 – $264 million) and $115 million (December 31, 2019 – $123 million), respectively, while total borrowings against the policies were $107 million (December 31, 2019 – $114 million) at both Ameren and Ameren Illinois. Ameren and Ameren Illinois have the right to offset the borrowings
against the cash surrender value of the policies and, consequently, present the net asset in “Other assets” on their respective balance sheets. The net cash surrender value of Ameren’s company-owned life insurance is affected by the investment performance of a separate account in which Ameren holds a beneficial interest.
Operating Revenues
We record revenues from contracts with customers for various electric and natural gas services, which primarily consist of retail distribution, electric transmission, and off-system arrangements. When more than one performance obligation exists in a contract, the consideration under the contract is allocated to the performance obligations based on the relative standalone selling price.
Electric and natural gas retail distribution revenues are earned when the commodity is delivered to our customers. We accrue an estimate of electric and natural gas retail distribution revenues for service provided but unbilled at the end of each accounting period. Electric transmission revenues are earned as electric transmission services are provided. Off-system revenues are primarily comprised of MISO revenues and wholesale bilateral revenues. MISO revenues include the sale of electricity, capacity, and ancillary services. Wholesale bilateral revenues include the sale of electricity and capacity. MISO-related electricity and wholesale bilateral electricity revenues are earned as electricity is delivered. Capacity and ancillary service revenues are earned as services are provided.
Retail distribution, electric transmission, and off-system revenues, including the underlying components described above, represent a series of goods or services that are substantially the same and have the same pattern of transfer over time to our customers. Revenues from contracts with customers are equal to the amounts billed and our estimate of electric and natural gas retail distribution services provided but unbilled at the end of each accounting period. Customers are billed at least monthly, and payments are due less than one month after goods and/or services are provided. See Note 16 – Segment Information for disaggregated revenue information.
For certain regulatory recovery mechanisms that are alternative revenue programs rather than revenues from contracts with customers, we recognize revenues that have been authorized for rate recovery, are objectively determinable and probable of recovery, and are expected to be collected from customers within two years from the end of the year. Our alternative revenue programs include revenue requirement reconciliations, the MEEIA, the VBA, and the DCA. These revenues are subsequently recognized as revenues from contracts with customers when billed, with an offset to alternative revenue program revenues.
As of December 31, 2020 and 2019, our remaining performance obligations were immaterial. The Ameren Companies elected not to disclose the aggregate amount of the transaction price allocated to the performance obligations that are unsatisfied as of the end of the reporting period for contracts with an initial expected term of one year or less.
Accounting for MISO Transactions
MISO-related purchase and sale transactions are recorded by Ameren, Ameren Missouri, and Ameren Illinois using settlement information provided by the MISO. Ameren Missouri records these purchase and sale transactions on a net hourly position. Ameren Missouri records net purchases in a single hour in “Operating Expenses – Purchased power” and net sales in a single hour in “Operating Revenues – Electric” in its statement of income. Ameren Illinois records net purchases in “Operating Expenses – Purchased power” in its statement of income to reflect all of its MISO transactions relating to the procurement of power for its customers. On occasion, Ameren Missouri’s and Ameren Illinois’ prior-period transactions will be resettled outside the routine settlement process because of a change in the MISO’s tariff or a material interpretation thereof. In these cases, Ameren Missouri and Ameren Illinois recognize revenues and expenses associated with resettlements once the resettlement is probable and the resettlement amount can be estimated. There were no material MISO resettlements in 2020, 2019, or 2018.
Stock-based Compensation
Stock-based compensation cost is measured at the grant date based on the fair value of the award, net of an assumed forfeiture rate. Ameren recognizes as compensation expense the estimated fair value of stock-based compensation on a straight-line basis over the requisite vesting period. See Note 11 – Stock-based Compensation for additional information.
Unamortized Debt Discounts, Premiums, and Issuance Costs
Long-term debt discounts, premiums, and issuance costs are amortized over the lives of the related issuances. Credit agreement fees are amortized over the term of the agreement.
Income Taxes
Ameren uses an asset and liability approach for its financial accounting and reporting of income taxes. Deferred tax assets and liabilities are recognized for transactions that are treated differently for financial reporting and income tax return purposes. These deferred tax assets and liabilities are based on statutory tax rates.
We expect that regulators will reduce future revenues for deferred tax liabilities that were initially recorded at rates in excess of the current statutory rate. Therefore, reductions in certain deferred tax liabilities that were recorded because of decreases in the statutory rate have been credited to a regulatory liability. A regulatory asset has been established to recognize the probable recovery through future customer rates of tax benefits related to the equity component of allowance for funds used during construction, as well as the effects of tax rate increases. To the extent deferred tax balances are included in rate base, the revaluation of deferred taxes is recorded as a regulatory asset or liability on the balance sheet and will be collected from, or refunded to, customers. For deferred tax balances not included in rate base, the revaluation of deferred taxes is recorded as an adjustment to income tax expense on the income statement. See Note 12 – Income Taxes for further information regarding the revaluation of deferred taxes related to Missouri state corporate income tax rate changes.
Ameren Missouri, Ameren Illinois, and all the other Ameren subsidiary companies are parties to a tax allocation agreement with Ameren (parent) that provides for the allocation of consolidated tax liabilities. The tax allocation agreement specifies that each party be allocated an amount of tax using a stand-alone calculation, which is similar to what would be owed or refunded had the party been separately subject to tax without considering the impact of consolidation. Any net benefit attributable to Ameren (parent) is reallocated to the other parties. This reallocation is treated as a capital contribution to the party receiving the benefit. See Note 13 – Related-party Transactions for information regarding capital contributions under the tax allocation agreement.
Accounting Changes and Other Matters
In the first quarter of 2020, the Ameren Companies adopted authoritative accounting guidance that requires credit losses on most financial assets carried at amortized cost and off-balance sheet credit exposures, such as financial guarantees or loan commitments, to be measured using a current expected credit loss (CECL) model. The guidance requires an entity to measure expected credit losses using relevant information about past events, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. In addition, the guidance made certain changes to the impairment model applicable to available-for-sale debt securities, such as requiring credit losses to be presented as an allowance rather than a write-down on impaired debt securities for which there is neither an intent nor a more-likely-than-not requirement to sell. Our adoption of this guidance did not have a material impact on the Ameren Companies’ financial statements and did not result in a cumulative effect adjustment to retained earnings as of the adoption date. See Note 15 – Supplemental Information for additional information regarding credit losses on accounts receivable.
In the first quarter of 2020, the Ameren Companies adopted authoritative accounting guidance that altered certain disclosure requirements in relation to fair value measurements. See Note 8 – Fair Value Measurements for our fair value measurement disclosures.
In the fourth quarter of 2020, the Ameren Companies adopted authoritative accounting guidance that altered certain disclosure requirements in relation to defined benefit plans. See Note 10 – Retirement Benefits for our defined benefit plan disclosures.
NOTE 2 – RATE AND REGULATORY MATTERS
Below is a summary of our regulatory frameworks and significant regulatory proceedings and related lawsuits. We are unable to predict the ultimate outcome of these matters, the timing of final decisions of the various agencies and courts, or the effect on our results of operations, financial position, or liquidity.
Regulatory Frameworks
Missouri
The MoPSC regulates rates and other matters for Ameren Missouri’s electric service and natural gas distribution businesses. The rates Ameren Missouri charges customers for these services are established in a traditional regulatory rate review, which takes up to 11 months to complete, based on a historical test year and the allowed ROE established in the review.
Ameren Missouri has recovery mechanisms, including the RESRAM, FAC, MEEIA, PGA, DCA, and ISRS, that allow customer rates to be adjusted without a traditional regulatory rate review. These riders, along with the PISA, each described in more detail below, partially mitigate the effects of regulatory lag. Ameren Missouri also employs other recovery mechanisms, including a pension and postretirement benefit cost tracker, an uncertain income tax position tracker, a tracker on certain excess deferred income taxes, a renewable energy standard cost tracker, and a solar rebate program cost tracker. Each of these trackers allows Ameren Missouri to defer the difference between actual costs incurred and costs included in customer rates as a regulatory asset or regulatory liability. The difference will be reflected in base rates in a subsequent MoPSC rate order. Ameren Missouri’s cost recovery under any of its recovery mechanisms is subject to MoPSC prudence reviews.
The PISA permits Ameren Missouri to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on investments in certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates. The regulatory asset for accumulated PISA deferrals also earns a return at the applicable WACC, with all approved PISA deferrals added to rate
base prospectively and recovered over a period of 20 years following a regulatory rate review. Additionally, under the RESRAM, Ameren Missouri is permitted to recover the 15% of depreciation expense not recovered under the PISA, and earn a return at the applicable WACC for investments in renewable generation plant placed in service. The deferrals are a regulatory asset until they are included in customer rates and collected in a subsequent period. 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. Under Missouri law, as a result of the PISA election, additional provisions apply to Ameren Missouri, including limitations on electric customer rate increases. 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. 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. Ameren Missouri did not incur a penalty related to the rate cap in 2020. Both the rate increase limitation and the PISA are effective through December 2023. Missouri law provides for the ability to use the PISA, if Ameren Missouri requests and receives MoPSC approval for extension, through December 2028.
The RESRAM permits Ameren Missouri to recover or refund, through customer rates, the difference between the cost of compliance with Missouri’s renewable energy standard and the amount set in base rates. Customer rates are adjusted for the RESRAM on an annual basis without a traditional regulatory rate review, subject to MoPSC prudence reviews. The difference between actual compliance costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. RESRAM regulatory assets earn carrying costs at short-term interest rates. The RESRAM permits Ameren Missouri to recover investments in wind generation and other renewables related to compliance with Missouri’s renewable energy standard, and earn a return at the applicable WACC on those investments not already provided for in customer rates or any other recovery mechanism.
The FAC permits 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, with the remaining 5% of changes retained by Ameren Missouri. Net recovery of these costs through customer rates does not affect Ameren Missouri’s electric margins, as any change in revenue is offset by a corresponding change in fuel expense. The difference between actual net energy costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. FAC regulatory assets earn carrying costs at short-term interest rates. Ameren Missouri’s base rates for electric service are required to be reset at least every four years to allow for continued use of the FAC.
The MEEIA permits Ameren Missouri to recover customer energy-efficiency program costs, the related lost electric margins, and any performance incentive through the MEEIA without a traditional regulatory rate review. MEEIA assets earn carrying costs at short-term interest rates.
Ameren Missouri is a member of the MISO, and its transmission rate is calculated in accordance with the MISO Open Access Transmission, Energy, and Operating Reserve Markets Tariff. The FERC regulates the rates charged and the terms and conditions for wholesale electric transmission service. The transmission rate update each June is based on Ameren Missouri’s actual historical cost from the prior calendar year. This rate is not directly charged to Missouri retail customers because, in Missouri, bundled retail rates include an amount for transmission-related costs and revenues.
The PGA allows Ameren Missouri to recover prudently incurred costs of natural gas purchased on behalf of its customers without a traditional regulatory rate review. These pass-through purchased gas costs do not affect Ameren Missouri’s natural gas margins, as any change in costs is offset by a corresponding change in revenues. The difference between actual natural gas costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. PGA regulatory assets earn carrying costs at short-term interest rates. The DCA ensures recoverability of the natural gas delivery service revenue requirement that is dependent on sales volumes for nearly all customers. The DCA allows Ameren Missouri to adjust natural gas delivery service rates without a traditional regulatory rate review when changes occur in sales volumes from those volumes approved by the MoPSC in the previous regulatory rate review. The difference between actual gas delivery service revenues billed to customers and revenues approved by the MoPSC in a given period is deferred as a regulatory asset or liability. DCA regulatory assets earn carrying costs at short-term interest rates. The deferred amount is either billed or refunded to customers in a subsequent period. In addition, the ISRS permits certain prudently incurred natural gas infrastructure replacement costs to be recovered from customers on a more timely basis between regulatory rate reviews. The ROE currently used by Ameren Missouri for purposes of the ISRS tariff is 9.725%.
Illinois
The ICC regulates rates and other matters for Ameren Illinois’ electric distribution service and natural gas distribution businesses. The
rates Ameren Illinois charges customers for electric distribution service are calculated under a performance-based formula ratemaking framework. The rates Ameren Illinois charges customers for natural gas distribution service are established in a traditional regulatory rate review, which takes up to 11 months to complete, based on a future test year and an allowed ROE established in the review.
Ameren Illinois’ election to use the electric distribution service performance-based formula ratemaking framework allowed by state law, described below, permits Ameren Illinois to adjust customer rates to recover the cost of electric distribution service on an annual basis. Ameren Illinois’ electric distribution service also has other cost recovery mechanisms in place that allow customer rates to be adjusted without a traditional regulatory rate review. Ameren Illinois’ electric distribution service business has riders for power procurement and transmission services incurred on behalf of its customers, renewable energy credit compliance, zero emission credits, and certain environmental costs, as well as bad debt write-offs and the costs of certain asbestos-related claims not recovered in base rates. These pass-through costs do not affect Ameren Illinois’ net income, as any change in costs is offset by a corresponding change in revenues. Ameren Illinois’ cost recovery under any of its recovery mechanisms is subject to ICC prudence reviews.
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. In addition, Ameren Illinois’ electric customer energy-efficiency rider provides Ameren Illinois’ electric distribution service business with recovery of, and return on, energy-efficiency investments. Under formula ratemaking for both its electric distribution service and its electric energy-efficiency investments, the revenue requirements are based on recoverable costs, year-end rate base, and a year-end ratemaking capital structure, and earn a return at the applicable WACC. The ROE component of the applicable WACC is based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points and any performance-related basis point adjustments, described in more detail below. Therefore, Ameren Illinois’ annual ROE for its electric distribution business is directly correlated to the yields on such bonds. In addition, regulatory assets applicable to formula ratemaking for both electric distribution service and electric energy-efficiency investments earn a return at the applicable WACC. However, Ameren Illinois recognizes the cost of debt on these regulatory assets in revenue, instead of the applicable WACC, with the difference recognized in revenues when recovery of such regulatory assets is reflected in customer rates.
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. See below for information regarding a request filed by Ameren Illinois to continue reconciling electric distribution service rates to the last annual revenue requirement approved by the ICC under the formula ratemaking framework after the framework expires or is no longer elected.
Ameren Illinois electric distribution service business 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 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’ natural gas distribution business has recovery mechanisms, including the QIP, PGA, and VBA, that allow customer rates to be adjusted without a traditional regulatory rate review. These riders, described in more detail below, mitigate the effects of regulatory lag. Ameren Illinois employs other riders for natural gas customer energy-efficiency program costs and certain environmental costs, as well as bad debt expenses and invested capital taxes not recovered in base rates. Pass-through costs under the riders do not affect Ameren Illinois’ net income, as any change in costs is offset by a corresponding change in revenues. Ameren Illinois’ cost recovery under any of its recovery mechanisms is subject to ICC prudence reviews.
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. Eligible natural gas investments include projects to improve safety and reliability and modernization investments, such as smart meters. The deferrals are a regulatory asset until they are included in customer rates in a subsequent period. Recovery of the regulatory asset begins two months after the qualifying natural gas plant is placed in service and continues until such plant is included in base rates in a natural gas delivery service rate order. 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, which mitigates the risk that the QIP will exceed its statutory limitations in future years and ensures timely recovery of capital investments. Without legislative action, the QIP will sunset after December 2023.
The PGA allows Ameren Illinois to recover prudently incurred costs of natural gas purchased on behalf of its customers without a traditional regulatory rate review. These pass-through purchased gas costs do not affect Ameren Illinois natural gas margins, as any change in costs is offset by a corresponding change in revenues. The difference between actual natural gas costs and costs billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is either billed or refunded to customers in a subsequent period. PGA regulatory assets earn carrying costs at short-term interest rates. The VBA ensures recoverability of the natural gas distribution service revenue requirement that is dependent on sales volumes for residential and small nonresidential customers. For these rate classes, the VBA allows Ameren Illinois to adjust natural gas distribution service rates without a traditional regulatory rate review when changes occur in sales volumes from those volumes approved by the ICC in a previous regulatory rate review. The difference between allowed sales revenues and amounts billed to customers in a given period is deferred as a regulatory asset or liability. The deferred amount is collected from, or refunded to, customers in a subsequent period. VBA regulatory assets for a given year that are not fully collected by the end of the following year begin earning carrying costs at short-term interest rates.
Federal
The FERC regulates rates and other matters for Ameren Illinois’ transmission business and ATXI, as well as for Ameren Missouri. See discussion above related to Ameren Missouri. Both Ameren Illinois and ATXI are members of the MISO, and their transmission rates are calculated in accordance with the MISO Open Access Transmission, Energy, and Operating Reserve Markets Tariff. Ameren Illinois and ATXI have received FERC approval to use a company-specific, forward-looking formula ratemaking framework in setting their transmission rates. These forward-looking rates are updated annually and become effective each January with forecasted information. The formula rate framework provides for an annual reconciliation of the electric transmission service revenue requirement, which reflects the actual recoverable costs incurred and the 13-month average rate base for a given year, with the revenue requirement in customer rates, including an allowed ROE. 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 collected from, or refunded to, customers within two years from the end of the year. FERC revenue requirement reconciliation adjustment regulatory assets earn carrying costs at each company’s short-term interest rates, while each company incurs interest at a FERC-prescribed rate on related regulatory liabilities. In addition, the FERC has approved transmission rate incentives, including a 50 basis point incentive adder to the allowed base ROE for Ameren Illinois and ATXI for participation in an RTO.
Proceedings and Updates
Missouri
March 2020 MoPSC Electric Rate Order
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. 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 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. 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, base level of expenses, and amortizations became effective on April 1, 2020. In April 2020, the MoPSC issued another order in Ameren Missouri’s July 2019 electric service regulatory rate review, reaffirming the existing percentage of net energy cost variances allowed to be recovered or refunded under the FAC.
Wind Generation Facilities
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. The purchase price included $564 million of cash, a deferred purchase price obligation withheld as credit support in relation to certain potential claims, contingent consideration, and transaction costs. 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, including transaction costs. 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. Both renewable energy centers are expected to support Ameren Missouri’s compliance with the Missouri renewable energy standard.
MEEIA
In August 2020, the MoPSC issued an order approving a unanimous stipulation and agreement with respect to the 2022 program year of Ameren Missouri’s six-year MEEIA 2019 program. The order established performance incentives that would provide Ameren Missouri an opportunity to earn additional revenues, including $11 million if Ameren Missouri achieves certain energy-efficiency goals during the 2022 program year and an additional $1 million if Ameren Missouri exceeds its targeted energy-efficiency goals. Ameren Missouri intends to invest $70 million in energy-efficiency programs during the 2022 program year. The August 2020 order also approved Ameren Missouri’s energy savings results for the first year of the MEEIA 2019 program. As a result of this order and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $6 million during 2020. As a result of MoPSC orders issued in September 2017, October 2018, January 2019, and September 2019 related to performance incentives for the MEEIA 2013 and MEEIA 2016 programs, and in accordance with revenue recognition guidance, Ameren Missouri recognized revenues of $37 million and $11 million during 2019 and 2018, respectively.
Requests for Accounting Authority Orders Related to COVID-19 Pandemic Costs
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. 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.
Illinois
Electric Distribution Service Rates
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.
Request to Continue Electric Distribution Service Rate Reconciliation
In April 2020, Ameren Illinois filed a request with the ICC, 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.
Electric Customer Energy-Efficiency Investments
In May 2020, Ameren Illinois filed its annual electric customer energy-efficiency formula rate update to establish the revenue requirement to be used for 2021 rates with the ICC. In December 2020, the ICC issued an order that approved 2021 electric customer energy-efficiency rates of $51 million, which represents an increase of $7 million from 2020 rates.
January 2021 Natural Gas Delivery Service Rate Order
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.
QIP Prudence Review
In March 2019, Ameren Illinois filed a request for an ICC prudence review of natural gas infrastructure investments recovered under the QIP during 2018. In November 2019, the Illinois Attorney General’s office challenged the recovery of capital investments, among other things, that were made during 2018, alleging that the amount of investments is excessive based on a comparison to historical investment levels. The Illinois Attorney General’s office is not alleging imprudence or that the investments do not qualify for recovery. In March 2020, the ICC staff filed testimony that supports the prudence and reasonableness of the capital investments made during 2018. Ameren Illinois’ 2018 QIP rate recovery under review by the ICC is within the rate increase limitations allowed by law. Ameren Illinois expects a decision by the ICC in this proceeding within the first half of 2021.
Service Disconnection Moratorium Proceeding
In March 2020, the ICC issued an order requiring all Illinois electric distribution and natural gas utilities to suspend disconnections and late fees for customer nonpayment, on an interim basis, effective March 18, 2020. Pursuant to an ICC order issued in June 2020 and following a voluntary extension of the suspension of residential disconnections, 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. The June 2020 order requires Ameren Illinois to implement more flexible credit and collection practices, on a temporary basis, including longer deferred payment arrangements, extending to 24 months in certain cases, and programs to provide financial assistance to customers. In addition, the order allows Ameren Illinois to recover up to $8 million in costs incurred related to the financial assistance programs. The portion of these costs associated with Ameren Illinois’ electric distribution business will be recovered through its bad debt rider and the portion associated with its natural gas distribution business will be recovered through a special purpose rider established by the order. The order also allows Ameren Illinois to recover forgone customer late fees and costs incurred related to the COVID-19 pandemic. The portion of these forgone late fees and costs associated with Ameren Illinois’ electric distribution business will be recovered through formula rates and the portion associated with its natural gas distribution business will be recovered through the special purpose rider. In addition, the order allows Ameren Illinois’ electric distribution business to recover bad debt expense for 2020, instead of write-offs net of subsequent recoveries, through future true-ups in its bad debt rider. The bad debt rider reverted to the recovery of bad debt write-offs, net of any subsequent recoveries, in 2021.
Federal
Transmission Formula Rate Revisions
In February 2020, the MISO, on behalf of Ameren Missouri, Ameren Illinois, and ATXI, filed requests with the FERC to revise each company’s transmission formula rate calculations with respect to calculation inputs for materials and supplies. In May 2020, the FERC issued orders approving the revisions prospectively. In addition, the FERC declined to order refunds for earlier periods, as requested by intervenors in Ameren Illinois’ filing, but directed its audit staff to review historical rate recovery in connection with an ongoing FERC audit. This review could lead the FERC to ultimately require refunds for periods prior to 2019. In June 2020, Ameren Missouri, Ameren Illinois, and ATXI filed requests for rehearing arguing, among other things, the revisions should be applied retrospectively to include the period January 1, 2019, to June 1, 2020, and that the FERC should not require refunds for periods prior to 2019. In July 2020, the FERC denied the rehearing requests without addressing the issues raised. In July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the July 2020 rehearing denials to the United States Court of Appeals for the District of Columbia Circuit, which is under no deadline to address the appeal. In October 2020, the FERC issued an order reaffirming its May 2020 order and denying the arguments raised in the rehearing requests filed by Ameren Missouri, Ameren Illinois, and ATXI. Pursuant to the May 2020 order, in the second quarter of 2020, Ameren and Ameren Illinois recorded a $2 million reduction to revenue for the period of January 2019 through May 2020. Regardless of the outcome of the appeal, the impacts of the May 2020 and October 2020 orders are not expected to be material to Ameren’s, Ameren Missouri’s, or Ameren Illinois’ results of operations, financial position, or liquidity.
FERC Complaint Cases
In November 2013, a customer group filed a complaint case with the FERC seeking a reduction in the allowed base ROE for FERC-regulated transmission rate base under the MISO tariff from 12.38% to 9.15%. In September 2016, the FERC issued an order in the November 2013 complaint case, which lowered the allowed base ROE to 10.32%, or a 10.82% total allowed ROE with the inclusion of a 50 basis point incentive adder for participation in an RTO, that was effective from late September 2016 forward. The September 2016 order also required refunds for the period November 2013 to February 2015, which were paid in 2017. With the maximum FERC-allowed refund period for the November 2013 complaint case ended in February 2015, another customer complaint case was filed in February 2015, seeking a further reduction in the allowed base ROE for the period of February 2015 to May 2016. In November 2019, the FERC issued an order addressing the November 2013 complaint case, which set the allowed base ROE at 9.88% and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The order also dismissed the February 2015 complaint case. In December 2019, Ameren and the MISO transmission owners, including Ameren Missouri, Ameren Illinois, and ATXI, filed requests for rehearing with the FERC. Additionally, in December 2019, various parties filed requests for rehearing with the FERC, challenging the dismissal of the February 2015 complaint case. In May 2020, the FERC issued an order addressing the requests for rehearing, which set the allowed base ROE at 10.02%, superseding the 9.88% previously ordered, and required refunds, with interest, for the periods November 2013 to February 2015 and from late September 2016 forward. The May 2020 order also denied rehearing of the FERC’s dismissal of the February 2015 complaint case. In June 2020, various parties filed requests for rehearing with the FERC, challenging the new ROE methodology established by the May 2020 order. In July 2020, the FERC denied the rehearing requests without addressing the issues raised, and indicated it will address the requests for rehearing in a future order. Also in July 2020, Ameren Missouri, Ameren Illinois, and ATXI filed an appeal of the May 2020 order to the United States Court of Appeals for the District of Columbia Circuit challenging the refunds for the period from September 2016 to May 2020. The court is under no deadline to address the appeal. In November 2020, the FERC issued an order reaffirming its May 2020 order in regards to the 10.02% allowed base ROE and the refund periods and denying the arguments raised in the rehearing requests.
As a result of the May 2020 order, which increased the FERC-allowed ROE from 9.88% to 10.02% for the periods November 2013 to February 2015 and late September 2016 forward, Ameren and Ameren Illinois recognized income of $13 million and $7 million, respectively, during the second quarter of 2020. As of December 31, 2020, Ameren and Ameren Illinois had recorded current regulatory liabilities of $15 million and $7 million, respectively, to reflect the expected refunds, including interest, associated with the allowed base ROE set by the May 2020 order in the November 2013 complaint case. The increase in the FERC-allowed base ROE resulting from the May 2020 order is not material to Ameren Missouri’s results of operations, financial position, or liquidity.
Regulatory Assets and Liabilities
The following table presents our regulatory assets and regulatory liabilities at December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
|
Ameren
Missouri
|
|
Ameren
Illinois
|
|
Ameren
|
|
|
Ameren
Missouri
|
|
Ameren
Illinois
|
|
Ameren
|
Regulatory assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under-recovered FAC(a)
|
|
$
|
48
|
|
|
$
|
—
|
|
|
$
|
48
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Under-recovered Illinois electric power costs(b)
|
|
—
|
|
|
4
|
|
|
4
|
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MTM derivative losses(c)
|
|
21
|
|
|
200
|
|
|
221
|
|
|
|
12
|
|
|
242
|
|
|
254
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IEIMA revenue requirement reconciliation adjustment(d)(e)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
17
|
|
|
17
|
|
FERC revenue requirement reconciliation adjustment(f)
|
|
—
|
|
|
28
|
|
|
50
|
|
|
|
—
|
|
|
1
|
|
|
16
|
|
Under-recovered VBA(g)
|
|
—
|
|
|
11
|
|
|
11
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pension and postretirement benefit costs(h)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
7
|
|
|
26
|
|
|
33
|
|
Income taxes(i)
|
|
117
|
|
|
65
|
|
|
183
|
|
|
|
114
|
|
|
61
|
|
|
177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bad debt rider(j)
|
|
—
|
|
|
11
|
|
|
11
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Callaway costs(e)(k)
|
|
14
|
|
|
—
|
|
|
14
|
|
|
|
18
|
|
|
—
|
|
|
18
|
|
Callaway refueling and maintenance outage costs(l)
|
|
39
|
|
|
—
|
|
|
39
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Unamortized loss on reacquired debt(m)
|
|
52
|
|
|
22
|
|
|
74
|
|
|
|
55
|
|
|
31
|
|
|
86
|
|
Environmental cost riders(n)
|
|
—
|
|
|
93
|
|
|
93
|
|
|
|
—
|
|
|
127
|
|
|
127
|
|
Storm costs(e)(o)
|
|
—
|
|
|
7
|
|
|
7
|
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Workers’ compensation claims(p)
|
|
4
|
|
|
5
|
|
|
9
|
|
|
|
4
|
|
|
7
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for funds used during construction for pollution control equipment(e)(q)
|
|
15
|
|
|
—
|
|
|
15
|
|
|
|
15
|
|
|
—
|
|
|
15
|
|
Customer generation rebate program(e)(r)
|
|
—
|
|
|
17
|
|
|
17
|
|
|
|
—
|
|
|
1
|
|
|
1
|
|
Solar rebate program(s)
|
|
5
|
|
|
—
|
|
|
5
|
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PISA(e)(t)
|
|
78
|
|
|
—
|
|
|
78
|
|
|
|
41
|
|
|
—
|
|
|
41
|
|
RESRAM(u)
|
|
2
|
|
|
—
|
|
|
2
|
|
|
|
9
|
|
|
—
|
|
|
9
|
|
FEJA energy-efficiency rider(e)(v)
|
|
—
|
|
|
283
|
|
|
283
|
|
|
|
—
|
|
|
211
|
|
|
211
|
|
Other
|
|
12
|
|
|
33
|
|
|
45
|
|
|
|
13
|
|
|
16
|
|
|
29
|
|
Total regulatory assets
|
|
$
|
407
|
|
|
$
|
779
|
|
|
$
|
1,209
|
|
|
|
$
|
293
|
|
|
$
|
751
|
|
|
$
|
1,061
|
|
Less: current regulatory assets
|
|
(60)
|
|
|
(37)
|
|
|
(109)
|
|
|
|
(8)
|
|
|
(57)
|
|
|
(69)
|
|
Noncurrent regulatory assets
|
|
$
|
347
|
|
|
$
|
742
|
|
|
$
|
1,100
|
|
|
|
$
|
285
|
|
|
$
|
694
|
|
|
$
|
992
|
|
Regulatory liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Over-recovered FAC(a)
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
39
|
|
Over-recovered Illinois electric power costs(b)
|
|
—
|
|
|
15
|
|
|
15
|
|
|
|
—
|
|
|
11
|
|
|
11
|
|
Over-recovered PGA(b)
|
|
7
|
|
|
15
|
|
|
22
|
|
|
|
8
|
|
|
14
|
|
|
22
|
|
Over-recovered VBA(g)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
—
|
|
|
8
|
|
|
8
|
|
MTM derivative gains(c)
|
|
11
|
|
|
10
|
|
|
21
|
|
|
|
18
|
|
|
3
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IEIMA revenue requirement reconciliation adjustment(d)
|
|
—
|
|
|
22
|
|
|
22
|
|
|
|
—
|
|
|
18
|
|
|
18
|
|
FERC revenue requirement reconciliation adjustment(f)
|
|
—
|
|
|
21
|
|
|
21
|
|
|
|
—
|
|
|
37
|
|
|
38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated refund for FERC complaint cases(w)
|
|
—
|
|
|
7
|
|
|
15
|
|
|
|
—
|
|
|
23
|
|
|
40
|
|
Income taxes(i)
|
|
1,317
|
|
|
790
|
|
|
2,192
|
|
|
|
1,428
|
|
|
813
|
|
|
2,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of removal(x)
|
|
1,027
|
|
|
873
|
|
|
1,923
|
|
|
|
1,041
|
|
|
827
|
|
|
1,884
|
|
AROs(y)
|
|
436
|
|
|
—
|
|
|
436
|
|
|
|
303
|
|
|
—
|
|
|
303
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension and postretirement benefit costs(h)
|
|
198
|
|
|
177
|
|
|
375
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pension and postretirement benefit costs tracker(z)
|
|
55
|
|
|
—
|
|
|
55
|
|
|
|
72
|
|
|
—
|
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewable energy credits and zero emission credits(aa)
|
|
—
|
|
|
200
|
|
|
200
|
|
|
|
—
|
|
|
155
|
|
|
155
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess income taxes collected in 2018(ab)
|
|
45
|
|
|
—
|
|
|
45
|
|
|
|
60
|
|
|
—
|
|
|
60
|
|
Other
|
|
30
|
|
|
21
|
|
|
51
|
|
|
|
30
|
|
|
24
|
|
|
54
|
|
Total regulatory liabilities
|
|
$
|
3,136
|
|
|
$
|
2,151
|
|
|
$
|
5,403
|
|
|
|
$
|
2,999
|
|
|
$
|
1,933
|
|
|
$
|
5,051
|
|
Less: current regulatory liabilities
|
|
(26)
|
|
|
(88)
|
|
|
(121)
|
|
|
|
(62)
|
|
|
(84)
|
|
|
$
|
(164)
|
|
Noncurrent regulatory liabilities
|
|
$
|
3,110
|
|
|
$
|
2,063
|
|
|
$
|
5,282
|
|
|
|
$
|
2,937
|
|
|
$
|
1,849
|
|
|
$
|
4,887
|
|
(a)Under-recovered or over-recovered fuel costs to be recovered or refunded through the FAC. Specific accumulation periods aggregate the under-recovered or over-recovered costs over four months, any related adjustments that occur over the following four months, and the recovery from, or refund to, customers that occurs over the next eight months.
(b)Under-recovered or over-recovered costs from utility customers. Amounts will be recovered from, or refunded to, customers within one year of the deferral.
(c)Deferral of commodity-related derivative MTM losses or gains. See Note 7 – Derivative Financial Instruments for additional information.
(d)The difference between Ameren Illinois’ electric distribution service annual revenue requirement calculated under the performance-based formula ratemaking framework and the revenue requirement included in customer rates for that year. Any under-recovery or over-recovery will be recovered from, or refunded to, customers with interest within two years.
(e)These assets earn a return at the applicable WACC.
(f)Ameren Illinois’ and ATXI’s annual revenue requirement reconciliation calculated pursuant to the FERC’s electric transmission formula ratemaking framework. Any under-recovery or over-recovery will be recovered from, or refunded to, customers within two years.
(g)Under-recovered or over-recovered natural gas revenue caused by sales volume deviations from weather normalized sales approved by the ICC in rate regulatory reviews. Each year’s amount will be recovered from or refunded to customers from April through December of the following year.
(h)Under-recovered or over-recovered costs are being amortized in proportion to the recognition of prior service costs (credits) and actuarial losses (gains) attributable to Ameren’s pension plan and postretirement benefit plans. See Note 10 – Retirement Benefits for additional information.
(i)The regulatory assets represent amounts that will be recovered from customers for deferred income taxes related to the equity component of allowance for funds used during construction and the effects of tax rate changes. The regulatory liabilities represent amounts that will be refunded to customers for deferred income taxes related to depreciation differences, other tax liabilities, and the unamortized portion of investment tax credits recorded at rates in excess of current statutory rates. Amounts associated with the equity component of allowance for funds used during construction, and the unamortized portion of investment tax credits will be amortized over the expected life of the related assets. For net regulatory liabilities related to deferred income taxes recorded at rates other than the current statutory rate, the weighted-average remaining amortization periods at Ameren, Ameren Missouri, and Ameren Illinois are 34, 26, and 42 years.
(j)A rider for the difference between the level of bad debt write-offs, net of any subsequent recoveries, incurred by Ameren Illinois and the level of such costs included in electric distribution and natural gas delivery service rates. Pursuant to the June 2020 ICC order in the service disconnection moratorium proceeding discussed above, Ameren Illinois’ electric distribution bad debt rider provided for the recovery of bad debt expense in 2020. The under-recovery or over-recovery for each year is recovered from, or refunded to, customers over a twelve-month period beginning June the following year.
(k)Ameren Missouri’s Callaway Energy Center operations and maintenance expenses, property taxes, and carrying costs incurred between the plant in-service date and the date the plant was reflected in rates. These costs are being amortized over the original remaining life of the energy center.
(l)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 has historically been approximately 18 months. Amortization began in January 2021 and will continue until the completion of the next refueling and maintenance outage.
(m)Losses related to reacquired debt. These amounts are being amortized over the lives of the related new debt issuances or the original lives of the old debt issuances if no new debt was issued.
(n)The recoverable portion of accrued environmental site liabilities that will be collected from electric and natural gas customers through ICC-approved cost recovery riders. The period of recovery will depend on the timing of remediation expenditures. See Note 14 – Commitments and Contingencies for additional information.
(o)Storm costs from 2016, 2018, and 2020 deferred in accordance with the IEIMA. These costs are being amortized over five-year periods beginning in the year the storm occurred.
(p)The period of recovery will depend on the timing of actual expenditures.
(q)The MoPSC’s May 2010 electric rate order allowed Ameren Missouri to record an allowance for funds used during construction for pollution control equipment at its Sioux Energy Center until the cost of that equipment was included in customer rates beginning in 2011. These costs are being amortized over the expected life of the Sioux Energy Center, currently through 2033.
(r)Costs associated with Ameren Illinois’ customer generation rebate program. Costs are amortized over a 15-year period, beginning in the year rebates are paid.
(s)Costs associated with Ameren Missouri’s solar rebate program. The amortization period for these assets will be determined in a future electric service regulatory rate review.
(t)Under the PISA, Ameren Missouri is permitted to defer and recover 85% of the depreciation expense and earn a return at the applicable WACC on investments in certain property, plant, and equipment placed in service after September 1, 2018, and not included in base rates. Accumulated PISA deferrals are added to rate base prospectively and amortized over a period of 20 years following a regulatory rate review.
(u)Costs associated with Ameren Missouri’s compliance with the state of Missouri’s renewable energy standard. Costs incurred over a twelve-month period beginning each August are amortized over a twelve-month period beginning February the following year.
(v)The electric energy-efficiency investments are being amortized over their weighted-average useful lives beginning in the period in which they were made, with current remaining amortization periods ranging from 6 to 13 years.
(w)The 2020 balances represent the estimated refunds to transmission customers related to the May 2020 FERC order in the November 2013 FERC complaint case. The 2019 balances represent the estimated refunds to transmission customers related to the November 2019 FERC order in the November 2013 FERC complaint case. See further discussion of the FERC ROE complaint cases above.
(x)Estimated funds collected from customers to pay for the future removal cost of property, plant, and equipment retired from service, net of salvage.
(y)The ARO regulatory liability includes the nuclear decommissioning trust fund balance (December 31, 2020 - $982 million), net of recoverable removal costs for AROs (December 31, 2020 - $546 million). See Note 1 – Summary of Significant Accounting Policies – Asset Retirement Obligations.
(z)A regulatory recovery mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri and the level of such costs included in customer rates. The period of refund varies based on MoPSC approval in a regulatory rate review. For costs incurred prior to 2019, the weighted-average remaining amortization period is four years. For costs incurred during 2019 and after, the amortization period will be determined in a future electric service regulatory rate review.
(aa)Funds collected for the purchase of renewable energy credits and zero emission credits through IPA procurements. The balance will be amortized as the credits are purchased.
(ab)The excess amount collected in rates related to the TCJA from January 1, 2018, through July 31, 2018. The regulatory liability is being amortized over a three-year period, which began in April 2020.
NOTE 3 – PROPERTY, PLANT, AND EQUIPMENT, NET
The following table presents property, plant, and equipment, net, at December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren
Missouri(a)
|
|
Ameren
Illinois
|
|
Other
|
|
Ameren(a)
|
2020
|
|
|
|
|
|
|
|
|
Property, plant, and equipment at original cost:(b)
|
|
|
|
|
|
|
|
|
Electric generation:
|
|
|
|
|
|
|
|
|
Coal(c)
|
|
$
|
4,875
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,875
|
|
Natural gas and oil
|
|
1,097
|
|
|
—
|
|
|
—
|
|
|
1,097
|
|
Nuclear
|
|
5,608
|
|
|
—
|
|
|
—
|
|
|
5,608
|
|
Renewable(d)
|
|
1,301
|
|
|
—
|
|
|
—
|
|
|
1,301
|
|
Electric distribution
|
|
6,784
|
|
|
6,649
|
|
|
—
|
|
|
13,433
|
|
Electric transmission
|
|
1,482
|
|
|
3,575
|
|
|
1,774
|
|
|
6,831
|
|
Natural gas
|
|
561
|
|
|
3,308
|
|
|
—
|
|
|
3,869
|
|
Other(e)
|
|
1,390
|
|
|
1,070
|
|
|
245
|
|
|
2,705
|
|
|
|
23,098
|
|
|
14,602
|
|
|
2,019
|
|
|
39,719
|
|
Less: Accumulated depreciation and amortization
|
|
9,689
|
|
|
3,780
|
|
|
304
|
|
|
13,773
|
|
|
|
13,409
|
|
|
10,822
|
|
|
1,715
|
|
|
25,946
|
|
Construction work in progress:
|
|
|
|
|
|
|
|
|
Nuclear fuel in process
|
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
Other
|
|
395
|
|
|
379
|
|
|
12
|
|
|
786
|
|
Property, plant, and equipment, net
|
|
$
|
13,879
|
|
|
$
|
11,201
|
|
|
$
|
1,727
|
|
|
$
|
26,807
|
|
2019
|
|
|
|
|
|
|
|
|
Property, plant, and equipment at original cost:(b)
|
|
|
|
|
|
|
|
|
Electric generation:
|
|
|
|
|
|
|
|
|
Coal(c)
|
|
$
|
4,730
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,730
|
|
Natural gas and oil
|
|
1,090
|
|
|
—
|
|
|
—
|
|
|
1,090
|
|
Nuclear
|
|
5,414
|
|
|
—
|
|
|
—
|
|
|
5,414
|
|
Renewable(d)
|
|
646
|
|
|
—
|
|
|
—
|
|
|
646
|
|
Electric distribution
|
|
6,371
|
|
|
6,299
|
|
|
—
|
|
|
12,670
|
|
Electric transmission
|
|
1,405
|
|
|
3,101
|
|
|
1,642
|
|
|
6,148
|
|
Natural gas
|
|
528
|
|
|
3,024
|
|
|
—
|
|
|
3,552
|
|
Other(e)
|
|
1,173
|
|
|
993
|
|
|
236
|
|
|
2,402
|
|
|
|
21,357
|
|
|
13,417
|
|
|
1,878
|
|
|
36,652
|
|
Less: Accumulated depreciation and amortization
|
|
9,195
|
|
|
3,536
|
|
|
275
|
|
|
13,006
|
|
|
|
12,162
|
|
|
9,881
|
|
|
1,603
|
|
|
23,646
|
|
Construction work in progress:
|
|
|
|
|
|
|
|
|
Nuclear fuel in process
|
|
135
|
|
|
—
|
|
|
—
|
|
|
135
|
|
Other
|
|
338
|
|
|
202
|
|
|
55
|
|
|
595
|
|
Property, plant, and equipment, net
|
|
$
|
12,635
|
|
|
$
|
10,083
|
|
|
$
|
1,658
|
|
|
$
|
24,376
|
|
(a)Amounts include two CTs that have related financing obligations. The gross cumulative asset value of those agreements was $240 million and $236 million at December 31, 2020 and 2019, respectively. The total accumulated depreciation associated with the two CTs was $99 million and $95 million at December 31, 2020 and 2019, respectively. See Note 5 – Long-term Debt and Equity Financings for additional information on these agreements.
(b)The estimated lives for each asset group are as follows: 5 to 72 years for electric generation, excluding Ameren Missouri’s hydro generating assets, which have useful lives of up to 150 years, 20 to 80 years for electric distribution, 50 to 75 years for electric transmission, 20 to 80 years for natural gas, and 5 to 55 years for other.
(c)Includes $36 million of oil-fired generation in both 2019 and 2020.
(d)Renewable includes hydroelectric, wind, solar, and methane gas generation facilities.
(e)Other property, plant, and equipment includes assets used to support electric and natural gas services.
Capitalized software costs are classified within “Property, Plant, and Equipment, Net” on the balance sheet and are amortized on a straight-line basis over the expected period of benefit, ranging from 3 to 10 years. The following table presents the amortization, gross carrying value, and related accumulated amortization of capitalized software by year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization Expense
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
|
2020
|
2019
|
2018
|
|
2020
|
2019
|
|
2020
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Ameren
|
|
$
|
93
|
|
$
|
78
|
|
$
|
71
|
|
|
$
|
1,021
|
|
$
|
901
|
|
|
$
|
(640)
|
|
$
|
(584)
|
|
Ameren Missouri
|
|
44
|
|
30
|
|
24
|
|
|
398
|
|
303
|
|
|
(189)
|
|
(153)
|
|
Ameren Illinois
|
|
45
|
|
45
|
|
44
|
|
|
397
|
|
377
|
|
|
(238)
|
|
(221)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual amortization expense for capitalized costs for software placed in service as of December 31, 2020, is estimated to be as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
Ameren
|
|
$
|
105
|
|
|
$
|
94
|
|
|
$
|
81
|
|
|
$
|
55
|
|
|
$
|
23
|
|
Ameren Missouri
|
|
55
|
|
|
49
|
|
|
45
|
|
|
33
|
|
|
15
|
|
Ameren Illinois
|
|
46
|
|
|
42
|
|
|
34
|
|
|
21
|
|
|
7
|
|
NOTE 4 – SHORT-TERM DEBT AND LIQUIDITY
The liquidity needs of the Ameren Companies are typically supported through the use of available cash, drawings under committed credit agreements, commercial paper issuances, and/or, in the case of Ameren Missouri and Ameren Illinois, short-term affiliate borrowings.
Short-Term Borrowings
The Credit Agreements provide $2.3 billion of credit through maturity in December 2024. The total facility size of the Missouri Credit Agreement and Illinois Credit Agreement is $1.2 billion and $1.1 billion, respectively. The maturity date may be extended for two additional one-year periods upon mutual consent of the borrowers and lenders. Credit available under the agreements is provided by 22 international, national, and regional lenders, with no single lender providing more than $130 million of credit in aggregate.
The obligations of each borrower under the respective Credit Agreements to which it is a party are several and not joint. Except under limited circumstances relating to expenses and indemnities, the obligations of Ameren Missouri and Ameren Illinois under the respective Credit Agreements are not guaranteed by Ameren (parent) or any other subsidiary of Ameren. The following table presents the maximum aggregate amount available to each borrower under each facility:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Missouri
Credit Agreement
|
Illinois
Credit Agreement
|
Ameren (parent)
|
|
$
|
900
|
|
$
|
500
|
|
Ameren Missouri
|
|
850
|
|
(a)
|
Ameren Illinois
|
|
(a)
|
800
|
|
(a)Not applicable.
The borrowers have the option to seek additional commitments from existing or new lenders to increase the total facility size of the Credit Agreements to a maximum of $1.4 billion for the Missouri Credit Agreement and $1.3 billion for the Illinois Credit Agreement. Ameren (parent) borrowings are due and payable no later than the maturity date of the Credit Agreements. Ameren Missouri and Ameren Illinois borrowings under the applicable Credit Agreement are due and payable no later than the earlier of the maturity date or 364 days after the date of the borrowing.
The obligations of the borrowers under the Credit Agreements are unsecured. Loans are available on a revolving basis under each of the Credit Agreements. Funds borrowed may be repaid and, subject to satisfaction of the conditions to borrowing, reborrowed from time to time. At the election of each borrower, the interest rates on such loans will be the alternate base rate plus the margin applicable to the particular borrower and/or the eurodollar rate plus the margin applicable to the particular borrower. The applicable margins will be determined by the borrower’s long-term unsecured credit ratings or, if no such ratings are in effect, the borrower’s corporate/issuer ratings then in effect. The borrowers have received commitments from the lenders to issue letters of credit up to $100 million under each of the Credit Agreements. In addition, the issuance of letters of credit is subject to the $2.3 billion overall combined facility borrowing limitations of the Credit Agreements.
The borrowers will use the proceeds from any borrowings under the Credit Agreements for general corporate purposes, including working capital, commercial paper liquidity support, loan funding under the Ameren money pool arrangements, and other short-term affiliate loan arrangements. The Missouri Credit Agreement and the Illinois Credit Agreement are available to support issuances under Ameren (parent)’s, Ameren Missouri’s and Ameren Illinois’ commercial paper programs, respectively, subject to borrowing sublimits, as well as to support issuance of letters of credit for the borrowers. As of December 31, 2020, based on commercial paper outstanding and letters of credit issued under the Credit Agreements, along with cash and cash equivalents, the net liquidity available to Ameren (parent), Ameren Missouri, and Ameren Illinois, collectively, was $1.9 billion.
The following table summarizes the borrowing activity and relevant interest rates under Ameren (parent)’s, Ameren Missouri’s, and Ameren Illinois’ commercial paper issuances and borrowings under the Credit Agreements in the aggregate for the years ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren (parent)
|
|
Ameren Missouri
|
|
Ameren Illinois
|
|
Ameren Consolidated
|
|
2020
|
|
|
|
|
|
|
|
|
|
Average daily amount outstanding
|
|
$
|
108
|
|
|
$
|
109
|
|
|
$
|
46
|
|
|
$
|
263
|
|
|
Commercial paper issuances outstanding at period-end
|
|
490
|
|
|
—
|
|
|
—
|
|
|
490
|
|
|
Weighted-average interest rate
|
|
1.04
|
%
|
|
1.73
|
%
|
|
0.97
|
%
|
|
1.31
|
%
|
|
Peak amount outstanding during period(a)
|
|
$
|
490
|
|
|
$
|
573
|
|
|
$
|
250
|
|
|
$
|
908
|
|
|
Peak interest rate
|
|
3.30
|
%
|
(b)
|
5.05
|
%
|
(b)
|
3.40
|
%
|
|
5.05
|
%
|
(b)
|
2019
|
|
|
|
|
|
|
|
|
|
Average daily amount outstanding
|
|
$
|
421
|
|
|
$
|
122
|
|
|
$
|
157
|
|
|
$
|
700
|
|
|
Commercial paper issuances outstanding at period-end
|
|
153
|
|
|
234
|
|
|
53
|
|
|
440
|
|
|
Weighted-average interest rate
|
|
2.66
|
%
|
|
2.62
|
%
|
|
2.43
|
%
|
|
2.60
|
%
|
|
Peak amount outstanding during period(a)
|
|
$
|
651
|
|
|
$
|
549
|
|
|
$
|
356
|
|
|
$
|
1,113
|
|
|
Peak interest rate
|
|
3.80
|
%
|
(c)
|
2.97
|
%
|
|
5.00
|
%
|
(c)
|
5.00
|
%
|
(c)
|
(a) The timing of peak outstanding commercial paper issuances and borrowings under the Credit Agreements varies by company. Therefore, the sum of individual company peak amounts may not equal the Ameren consolidated peak amount for the period.
(b) Ameren’s and Ameren Missouri’s peak interest rate was affected by temporary disruptions in the commercial paper market in the first quarter of 2020.
(c) Ameren’s and Ameren Illinois’ peak interest rate was affected by temporary disruptions in the commercial paper market in the third quarter of 2019.
Indebtedness Provisions and Other Covenants
The information below is a summary of the Ameren Companies’ compliance with indebtedness provisions and other covenants.
The Credit Agreements contain conditions for borrowings and issuances of letters of credit. These conditions include the absence of default or unmatured default, material accuracy of representations and warranties (excluding any representation after the closing date as to the absence of material adverse change and material litigation, and the absence of any notice of violation, liability, or requirement under any environmental laws that could have a material adverse effect), and obtaining required regulatory authorizations. In addition, it is a condition for any Ameren Illinois borrowing that, at the time of and after giving effect to such borrowing, Ameren Illinois not be in violation of any limitation on its ability to incur unsecured indebtedness contained in its articles of incorporation.
The Credit Agreements also contain nonfinancial covenants, including restrictions on the ability to incur certain liens, to transact with affiliates, to dispose of assets, to make investments in or transfer assets to its affiliates, and to merge with other entities. The Credit Agreements require each of Ameren, Ameren Missouri, and Ameren Illinois to maintain consolidated indebtedness of not more than 65% of its consolidated total capitalization pursuant to a defined calculation set forth in the agreements. As of December 31, 2020, the ratios of consolidated indebtedness to total consolidated capitalization, calculated in accordance with the provisions of the Credit Agreements, were 56%, 48%, and 45%, for Ameren, Ameren Missouri, and Ameren Illinois, respectively.
The Credit Agreements contain default provisions that apply separately to each borrower. However, a default of Ameren Missouri or Ameren Illinois under the applicable credit agreement is also deemed to constitute a default of Ameren (parent) under such agreement. Defaults include a cross-default resulting from a default of such borrower under any other agreement covering outstanding indebtedness of such borrower and certain subsidiaries (other than project finance subsidiaries and nonmaterial subsidiaries) in excess of $100 million in the aggregate (including under the other credit agreement). However, under the default provisions of the Credit Agreements, any default of Ameren (parent) under either credit agreement that results solely from a default of Ameren Missouri or Ameren Illinois does not result in a cross-default of Ameren (parent) under the other credit agreement. Further, the Credit Agreements default provisions provide that an Ameren (parent) default under either of the Credit Agreements does not constitute a default by Ameren Missouri or Ameren Illinois.
None of the Credit Agreements or financing agreements contain credit rating triggers that would cause a default or acceleration of repayment of outstanding balances. The Ameren Companies were in compliance with the provisions and covenants of the Credit Agreements at December 31, 2020.
Money Pools
Ameren has money pool agreements with and among its subsidiaries to coordinate and provide for certain short-term cash and working capital requirements.
Ameren Missouri, Ameren Illinois, and ATXI may participate in the utility money pool as both lenders and borrowers. Ameren (parent) and Ameren Services may participate in the utility money pool only as lenders. Surplus internal funds are contributed to the money pool from
participants. The primary sources of external funds for the utility money pool are the Credit Agreements and the commercial paper programs. The total amount available to the pool participants from the utility money pool at any given time is reduced by the amount of borrowings made by participants, but it is increased to the extent that the pool participants advance surplus funds to the utility money pool or remit funds from other external sources. The availability of funds is also determined by funding requirement limits established by regulatory authorizations. Participants receiving a loan under the utility money pool agreement must repay the principal amount of such loan, together with accrued interest. The rate of interest depends on the composition of internal and external funds in the utility money pool. The average interest rate for borrowing under the utility money pool for the year ended December 31, 2020, was 0.64% (2019 – 2.48%).
See Note 13 – Related-party Transactions for the amount of interest income and expense from the utility money pool agreement recorded by Ameren Missouri and Ameren Illinois for the years ended December 31, 2020, 2019, and 2018.
NOTE 5 – LONG-TERM DEBT AND EQUITY FINANCINGS
The following table presents long-term debt outstanding, including maturities due within one year, as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
Ameren (Parent):
|
|
|
|
2.70% Senior unsecured notes due 2020
|
$
|
—
|
|
|
$
|
350
|
|
2.50% Senior unsecured notes due 2024
|
450
|
|
|
450
|
|
3.65% Senior unsecured notes due 2026
|
350
|
|
|
350
|
|
3.50% Senior unsecured notes due 2031
|
800
|
|
|
—
|
|
Total long-term debt, gross
|
1,600
|
|
|
1,150
|
|
Less: Unamortized discount and premium
|
(2)
|
|
|
—
|
|
Less: Unamortized debt issuance costs
|
(10)
|
|
|
(6)
|
|
Less: Maturities due within one year
|
—
|
|
|
(350)
|
|
Long-term debt, net
|
$
|
1,588
|
|
|
$
|
794
|
|
Ameren Missouri:
|
|
|
|
Bonds and notes:
|
|
|
|
5.00% Senior secured notes due 2020(a)
|
—
|
|
|
85
|
|
1.60% 1992 Series bonds due 2022(b)
|
47
|
|
|
47
|
|
3.50% Senior secured notes due 2024(a)
|
350
|
|
|
350
|
|
2.95% Senior secured notes due 2027(a)
|
400
|
|
|
400
|
|
3.50% First mortgage bonds due 2029(d)
|
450
|
|
|
450
|
|
2.95% First mortgage bonds due 2030(d)
|
465
|
|
|
—
|
|
2.90% 1998 Series A bonds due 2033(b)
|
60
|
|
|
60
|
|
2.90% 1998 Series B bonds due 2033(b)
|
50
|
|
|
50
|
|
2.75% 1998 Series C bonds due 2033(b)
|
50
|
|
|
50
|
|
5.50% Senior secured notes due 2034(a)
|
184
|
|
|
184
|
|
5.30% Senior secured notes due 2037(a)
|
300
|
|
|
300
|
|
8.45% Senior secured notes due 2039(a)(c)
|
350
|
|
|
350
|
|
3.90% Senior secured notes due 2042(a)(c)
|
485
|
|
|
485
|
|
3.65% Senior secured notes due 2045(a)
|
400
|
|
|
400
|
|
4.00% First mortgage bonds due 2048(d)
|
425
|
|
|
425
|
|
3.25% First mortgage bonds due 2049(d)
|
330
|
|
|
330
|
|
2.625% First mortgage bonds due 2051 (green bonds)(d)
|
550
|
|
|
—
|
|
Finance obligations:
|
|
|
|
City of Bowling Green agreement (Peno Creek CT) due 2022(e)
|
16
|
|
|
23
|
|
Audrain County agreement (Audrain County CT) due 2023(e)
|
240
|
|
|
240
|
|
Total long-term debt, gross
|
5,152
|
|
|
4,229
|
|
Less: Unamortized discount and premium
|
(12)
|
|
|
(9)
|
|
Less: Unamortized debt issuance costs
|
(36)
|
|
|
(30)
|
|
Less: Maturities due within one year
|
(8)
|
|
|
(92)
|
|
Long-term debt, net
|
$
|
5,096
|
|
|
$
|
4,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
Ameren Illinois:
|
|
|
|
Bonds and notes:
|
|
|
|
2.70% Senior secured notes due 2022(f)(g)
|
$
|
400
|
|
|
$
|
400
|
|
3.25% Senior secured notes due 2025(f)
|
300
|
|
|
300
|
|
6.125% Senior secured notes due 2028(f)
|
60
|
|
|
60
|
|
3.80% First mortgage bonds due 2028(h)
|
430
|
|
|
430
|
|
1.55% First mortgage bonds due 2030(h)
|
375
|
|
|
—
|
|
6.70% Senior secured notes due 2036(f)
|
61
|
|
|
61
|
|
6.70% Senior secured notes due 2036(f)
|
42
|
|
|
42
|
|
4.80% Senior secured notes due 2043(f)
|
280
|
|
|
280
|
|
4.30% Senior secured notes due 2044(f)
|
250
|
|
|
250
|
|
4.15% Senior secured notes due 2046(f)
|
490
|
|
|
490
|
|
3.70% First mortgage bonds due 2047(h)
|
500
|
|
|
500
|
|
4.50% First mortgage bonds due 2049(h)
|
500
|
|
|
500
|
|
3.25% First mortgage bonds due 2050(h)
|
300
|
|
|
300
|
|
Total long-term debt, gross
|
3,988
|
|
|
3,613
|
|
Less: Unamortized discount and premium
|
(6)
|
|
|
(4)
|
|
Less: Unamortized debt issuance costs
|
(36)
|
|
|
(34)
|
|
|
|
|
|
Long-term debt, net
|
$
|
3,946
|
|
|
$
|
3,575
|
|
ATXI:
|
|
|
|
3.43% Senior unsecured notes due 2050(i)
|
$
|
450
|
|
|
$
|
450
|
|
Total long-term debt, gross
|
450
|
|
|
450
|
|
|
|
|
|
Less: Unamortized debt issuance costs
|
(2)
|
|
|
(2)
|
|
|
|
|
|
Long-term debt, net
|
$
|
448
|
|
|
$
|
448
|
|
Ameren consolidated long-term debt, net
|
$
|
11,078
|
|
|
$
|
8,915
|
|
(a)These notes are collaterally secured by first mortgage bonds issued by Ameren Missouri under the Ameren Missouri mortgage indenture. The notes have a fall-away lien provision and will remain secured only as long as any first mortgage bonds issued under the Ameren Missouri mortgage indenture remain outstanding. Redemption, purchase, or maturity of all first mortgage bonds, including first mortgage bonds currently outstanding and any that may be issued in the future, would result in a release of the first mortgage bonds currently securing these notes, at which time these notes would become unsecured obligations. Considering the 2051 maturity of the 2.625% first mortgage bonds and the restrictions preventing a release date to occur that are attached to certain senior secured notes described in footnote (d) below, Ameren Missouri does not expect the first mortgage lien protection associated with these notes to fall away.
(b)These bonds are collaterally secured by first mortgage bonds issued by Ameren Missouri under the Ameren Missouri mortgage indenture and have a fall-away lien provision similar to that of Ameren Missouri’s senior secured notes.
(c)Ameren Missouri has agreed that so long as any of the 3.90% senior secured notes due 2042 are outstanding, Ameren Missouri will not permit a release date to occur, and so long as any of the 8.45% senior secured notes due 2039 are outstanding, Ameren Missouri will not optionally redeem, purchase, or otherwise retire in full the outstanding first mortgage bonds not subject to release provisions.
(d)These bonds are first mortgage bonds issued by Ameren Missouri under the Ameren Missouri bond indenture. They are secured by substantially all Ameren Missouri property and franchises.
(e)Payments due related to these financing obligations are paid to a trustee, which is authorized to utilize the cash only to pay equal amounts due to Ameren Missouri under related bonds issued by the city/county and held by Ameren Missouri. The timing and amounts of payments due from Ameren Missouri under the agreements are equal to the timing and amount of bond service payments due to Ameren Missouri, resulting in no net cash flow. The balance of both the financing obligations and the related investments in debt securities, recorded in “Other Assets,” was $256 million and $263 million, respectively, as of December 31, 2020 and 2019.
(f)These notes are collaterally secured by first mortgage bonds issued by Ameren Illinois under the Ameren Illinois mortgage indenture. The notes have a fall-away lien provision and will remain secured only as long as any first mortgage bonds issued under its mortgage indenture remain outstanding. Redemption, purchase, or maturity of all first mortgage bonds, including first mortgage bonds currently outstanding and any that may be issued in the future, would result in a release of the first mortgage bonds currently securing these notes, at which time these notes would become unsecured obligations. Considering the 2050 maturity date of the 3.25% first mortgage bonds, Ameren Illinois does not expect the first mortgage lien protection associated with these notes to fall away.
(g)Ameren Illinois has agreed that so long as any of the 2.70% senior secured notes due 2022 are outstanding, Ameren Illinois will not permit a release date to occur.
(h)These bonds are first mortgage bonds issued by Ameren Illinois under the Ameren Illinois mortgage indenture. They are secured by substantially all Ameren Illinois property and franchises.
(i)The following table presents the principal maturities schedule for the 3.43% senior notes due 2050:
|
|
|
|
|
|
|
|
|
Payment Date
|
|
Principal Payment
|
August 2022
|
$
|
49.5
|
August 2024
|
|
49.5
|
August 2027
|
|
49.5
|
August 2030
|
|
49.5
|
August 2032
|
|
49.5
|
August 2038
|
|
49.5
|
August 2043
|
|
76.5
|
August 2050
|
|
76.5
|
Total
|
$
|
450.0
|
The following table presents the aggregate maturities of long-term debt, including current maturities, at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren
(parent)(a)
|
|
Ameren
Missouri(a)
|
|
Ameren
Illinois(a)
|
|
ATXI(a)
|
|
Ameren
Consolidated(a)
|
2021
|
$
|
—
|
|
|
$
|
8
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8
|
|
2022
|
—
|
|
|
55
|
|
|
400
|
|
|
50
|
|
|
505
|
|
2023
|
—
|
|
|
240
|
|
|
—
|
|
|
—
|
|
|
240
|
|
2024
|
450
|
|
|
350
|
|
|
—
|
|
|
50
|
|
|
850
|
|
2025
|
—
|
|
|
—
|
|
|
300
|
|
|
—
|
|
|
300
|
|
Thereafter
|
1,150
|
|
|
4,499
|
|
|
3,288
|
|
|
350
|
|
|
9,287
|
|
Total
|
$
|
1,600
|
|
|
$
|
5,152
|
|
|
$
|
3,988
|
|
|
$
|
450
|
|
|
$
|
11,190
|
|
(a)Excludes unamortized discount, unamortized premium, and debt issuance costs of $12 million, $48 million, $42 million, and $2 million at Ameren (parent), Ameren Missouri, Ameren Illinois, and ATXI, respectively.
All classes of Ameren Missouri’s and Ameren Illinois’ preferred stock are entitled to cumulative dividends, have voting rights, and are not subject to mandatory redemption. The preferred stock of Ameren’s subsidiaries is included in “Noncontrolling Interests” on Ameren’s consolidated balance sheet. The following table presents the outstanding preferred stock of Ameren Missouri and Ameren Illinois, which is redeemable at the option of the issuer, at the prices shown below as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding
|
|
Redemption Price (per share)
|
|
2020
|
|
2019
|
Ameren Missouri:
|
|
|
|
|
|
|
|
Without par value and stated value of $100 per share, 25 million shares authorized
|
|
|
|
|
|
|
$3.50 Series
|
130,000 shares
|
|
$
|
110.00
|
|
|
$
|
13
|
|
|
$
|
13
|
|
$3.70 Series
|
40,000 shares
|
|
104.75
|
|
|
4
|
|
|
4
|
|
$4.00 Series
|
150,000 shares
|
|
105.625
|
|
|
15
|
|
|
15
|
|
$4.30 Series
|
40,000 shares
|
|
105.00
|
|
|
4
|
|
|
4
|
|
$4.50 Series
|
213,595 shares
|
|
110.00
|
|
(a)
|
21
|
|
|
21
|
|
$4.56 Series
|
200,000 shares
|
|
102.47
|
|
|
20
|
|
|
20
|
|
$4.75 Series
|
20,000 shares
|
|
102.176
|
|
|
2
|
|
|
2
|
|
$5.50 Series A
|
14,000 shares
|
|
110.00
|
|
|
1
|
|
|
1
|
|
Total
|
|
|
|
$
|
80
|
|
|
$
|
80
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
With par value of $100 per share, 2 million shares authorized
|
|
|
|
|
|
|
4.00% Series
|
144,275 shares
|
|
$
|
101.00
|
|
|
$
|
14
|
|
|
$
|
14
|
|
4.08% Series
|
45,224 shares
|
|
103.00
|
|
|
5
|
|
|
5
|
|
4.20% Series
|
23,655 shares
|
|
104.00
|
|
|
2
|
|
|
2
|
|
4.25% Series
|
50,000 shares
|
|
102.00
|
|
|
5
|
|
|
5
|
|
4.26% Series
|
16,621 shares
|
|
103.00
|
|
|
2
|
|
|
2
|
|
4.42% Series
|
16,190 shares
|
|
103.00
|
|
|
2
|
|
|
2
|
|
4.70% Series
|
18,429 shares
|
|
104.30
|
|
|
2
|
|
|
2
|
|
4.90% Series
|
73,825 shares
|
|
102.00
|
|
|
7
|
|
|
7
|
|
4.92% Series
|
49,289 shares
|
|
103.50
|
|
|
5
|
|
|
5
|
|
5.16% Series
|
50,000 shares
|
|
102.00
|
|
|
5
|
|
|
5
|
|
6.625% Series
|
124,274 shares
|
|
100.00
|
|
|
12
|
|
|
12
|
|
7.75% Series
|
4,542 shares
|
|
100.00
|
|
|
1
|
|
|
1
|
|
Total
|
|
|
|
$
|
62
|
|
|
$
|
62
|
|
Total Ameren
|
|
|
|
$
|
142
|
|
|
$
|
142
|
|
(a)In the event of voluntary liquidation, $105.50.
Ameren has 100 million shares of $0.01 par value preferred stock authorized, with no such shares outstanding. Ameren Missouri has 7.5 million shares of $1 par value preference stock authorized, with no such shares outstanding. Ameren Illinois has 2.6 million shares of no par value preferred stock authorized, with no such shares outstanding.
Ameren
Under the DRPlus and its 401(k) plan, Ameren issued 0.7 million, 0.9 million, and 1.2 million shares of common stock in 2020, 2019, and 2018, respectively, and received proceeds of $51 million, $68 million, and $74 million for the respective years. In addition, Ameren issued 0.5 million, 0.8 million, and 0.7 million shares of common stock valued at $38 million, $54 million, and $35 million in 2020, 2019, 2018, respectively, for no cash consideration in connection with stock-based compensation.
In May 2020, Ameren filed a Form S-3 registration statement with the SEC, authorizing the offering of 4 million additional shares of its common stock under the DRPlus, which expires in May 2023. Shares of common stock sold under the DRPlus are, at Ameren’s option, newly issued shares, treasury shares, or shares purchased in the open market or in privately negotiated transactions.
In October 2020, Ameren, Ameren Missouri, and Ameren Illinois filed a Form S-3 shelf registration statement with the SEC, registering the issuance of an unspecified amount of certain types of securities. This registration statement expires in October 2023.
In October 2018, Ameren filed a Form S-8 registration statement with the SEC, authorizing the offering of 4 million additional shares of its common stock under its 401(k) plan. Shares of common stock issuable under the 401(k) plan are, at Ameren’s option, newly issued shares, treasury shares, or shares purchased in the open market or in privately negotiated transactions.
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, pursuant to the agreement terms, 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 Note 2 – Rate and Regulatory Matters for additional information about the wind generation facilities.
In April 2020, Ameren (parent) issued $800 million of 3.50% senior unsecured notes due January 2031, with interest payable semiannually on January 15 and July 15 of each year, beginning July 15, 2020. Ameren received net proceeds of $793 million, which were used for general corporate purposes, including to repay outstanding short-term debt, and were used to fund the repayment of Ameren’s $350 million of 2.70% senior unsecured notes, which were redeemed at par plus accrued interest in October 2020.
In September 2019, Ameren issued $450 million of 2.50% senior unsecured notes due September 2024, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2020. Ameren received net proceeds of $447 million, which were used to repay outstanding short-term debt.
Ameren Missouri
In March 2020, Ameren Missouri issued $465 million of 2.95% first mortgage bonds due March 2030, with interest payable semiannually on March 15 and September 15 of each year, beginning September 15, 2020. Ameren Missouri received net proceeds of $462 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Missouri incurred in connection with the repayment of $85 million of its 5.00% senior secured notes that matured in February 2020.
In October 2020, Ameren Missouri issued $550 million of 2.625% first mortgage bonds due March 2051, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2021. The bonds were issued as green bonds; therefore, the proceeds will be used for eligible green projects. Ameren Missouri received net proceeds of $543 million, which were used to partially finance the acquisition of two wind generation facilities. See Note 2 – Rate and Regulatory Matters for information about the wind generation facilities.
In March 2019, Ameren Missouri issued $450 million of 3.50% first mortgage bonds due March 2029, with interest payable semiannually on March 15 and September 15 of each year, beginning September 15, 2019. Ameren Missouri received net proceeds of $447 million, which were used to repay outstanding short-term debt, including short-term debt that Ameren Missouri incurred in connection with the repayment of $329 million of its 6.70% senior secured notes that matured February 1, 2019.
In June and July 2019, all of the 1992 Series bonds, 1998 Series A bonds, 1998 Series B bonds, and 1998 Series C bonds issued by the Missouri Environmental Authority on behalf of Ameren Missouri were subject to purchase in lieu of redemption or a mandatory tender as a result of a change in the method of determining the interest rates on the bonds. The interest rate method of each of the series of bonds, as well as Ameren Missouri’s first mortgage bonds that collaterally secure each of the series of bonds, was changed from a variable rate to a fixed rate. Upon the change in the method of determining the interest rate, the bonds, totaling $207 million, were remarketed to new investors. The following table provides additional information on the bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1992 Series
|
1998 Series A
|
1998 Series B
|
1998 Series C
|
Transaction month
|
June 2019
|
July 2019
|
July 2019
|
June 2019
|
Principal amount
|
$47
|
$60
|
$50
|
$50
|
Fixed interest rate
|
1.60%
|
2.90%
|
2.90%
|
2.75%
|
Variable interest rate(a)
|
2.58%
|
3.43%
|
3.57%
|
3.43%
|
Maturity
|
December 2022
|
September 2033
|
September 2033
|
September 2033
|
Interest payment dates
|
June 1 and December 1
|
March 1 and September 1
|
March 1 and September 1
|
March 1 and September 1
|
Initial interest payment date
|
December 2019
|
September 2019
|
September 2019
|
September 2019
|
(a)Represents the variable interest rate of the bonds effective prior to the change in method of determining the interest rate.
In October 2019, Ameren Missouri issued $330 million of 3.25% first mortgage bonds due October 2049, with interest payable semiannually on April 1 and October 1 of each year, beginning April 1, 2020. Ameren Missouri received net proceeds of $326 million, which were used to repay $244 million of its 5.10% senior unsecured notes due October 1, 2019, with the remaining proceeds used to repay a portion of its short-term debt.
In October 2019, Ameren Missouri redeemed the remaining amount outstanding of its 5.45% first mortgage bonds due 2028 for less than $1 million.
For information on Ameren Missouri’s capital contributions, refer to Capital Contributions in Note 13 – Related-party Transactions.
Ameren Illinois
In November 2020, Ameren Illinois issued $375 million of 1.55% first mortgage bonds due November 2030, with interest payable semiannually on May 15 and November 15 of each year, beginning May 15, 2021. Ameren Illinois received net proceeds of $371 million, which were used to repay short-term debt.
In November 2019, Ameren Illinois issued $300 million of 3.25% first mortgage bonds due March 2050, with interest payable semiannually on March 15 and September 15 of each year, beginning March 15, 2020. Ameren Illinois received net proceeds of $296 million, which were used to repay outstanding short-term debt.
For information on Ameren Illinois’ capital contributions, refer to Capital Contributions in Note 13 – Related-party Transactions.
Indenture Provisions and Other Covenants
Ameren Missouri’s and Ameren Illinois’ indentures and articles of incorporation include covenants and provisions related to issuances of first mortgage bonds and preferred stock. Ameren Missouri and Ameren Illinois are required to meet certain ratios to issue additional first mortgage bonds and preferred stock. A failure to achieve these ratios would not result in a default under these covenants and provisions but would restrict the companies’ ability to issue bonds or preferred stock. The following table summarizes the required and actual interest coverage ratios for interest charges, dividend coverage ratios, and bonds and preferred stock issuable as of December 31, 2020, at an assumed interest rate of 5% and dividend rate of 6%.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Required Interest
Coverage Ratio(a)
|
Actual Interest
Coverage Ratio
|
Bonds Issuable(b)
|
|
Required Dividend
Coverage Ratio(c)
|
Actual Dividend
Coverage Ratio
|
Preferred Stock
Issuable
|
|
Ameren Missouri
|
>2.0
|
3.4
|
$5,025
|
|
>2.5
|
128.5
|
$2,872
|
|
Ameren Illinois
|
>2.0
|
7.1
|
7,229
|
|
>1.5
|
3.3
|
203
|
(d)
|
(a)Coverage required on the annual interest charges on first mortgage bonds outstanding and to be issued. Coverage is not required in certain cases when additional first mortgage bonds are issued on the basis of retired bonds.
(b)Amount of bonds issuable based either on required coverage ratios or unfunded property additions, whichever is more restrictive. The amounts shown also include bonds issuable based on retired bond capacity of $2,442 million and $643 million at Ameren Missouri and Ameren Illinois, respectively.
(c)Coverage required on the annual dividend on preferred stock outstanding and to be issued, as required in the respective company’s articles of incorporation.
(d)Preferred stock issuable is restricted by the amount of preferred stock that is currently authorized by Ameren Illinois’ articles of incorporation.
Ameren’s indenture does not require Ameren to comply with any quantitative financial covenants. The indenture does, however, include certain cross-default provisions. Specifically, either (1) the failure by Ameren to pay when due and upon expiration of any applicable grace period any portion of any Ameren indebtedness in excess of $25 million, or (2) the acceleration upon default of the maturity of any Ameren indebtedness in excess of $25 million under any indebtedness agreement, including borrowings under the Credit Agreements or the Ameren commercial paper program, constitutes a default under the indenture, unless such past due or accelerated debt is discharged or the acceleration is rescinded or annulled within a specified period.
Ameren Missouri and Ameren Illinois and 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 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.
Ameren Illinois’ articles of incorporation require dividend payments on its common stock to be based on ratios of common stock to total capitalization and other provisions related to certain operating expenses and accumulations of earned surplus. Ameren Illinois has made a commitment to the FERC to maintain a minimum 30% ratio of common stock equity to total capitalization. As of December 31, 2020, using the FERC-agreed upon calculation method, Ameren Illinois’ ratio of common stock equity to total capitalization was 54%.
ATXI’s note purchase agreement includes financial covenants that require ATXI not to permit at any time (1) debt to exceed 70% of total capitalization or (2) secured debt to exceed 10% of total assets.
At December 31, 2020, the Ameren Companies were in compliance with the provisions and covenants contained in their indentures and articles of incorporation, as applicable, and ATXI was in compliance with the provisions and covenants contained in its note purchase agreement. In order for the Ameren Companies to issue securities in the future, they will have to comply with all applicable requirements in effect at the time of any such issuances.
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 for further detail concerning variable interest entities.
NOTE 6 – OTHER INCOME, NET
The following table presents the components of “Other Income, Net” in the Ameren Companies’ statements of income for the years ended December 31, 2020, 2019, and 2018:
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|
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|
|
|
|
2020
|
|
2019
|
|
2018
|
Ameren:
|
|
|
|
|
|
Other Income, Net
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
32
|
|
|
$
|
28
|
|
|
$
|
36
|
|
Interest income on industrial development revenue bonds
|
25
|
|
|
25
|
|
|
26
|
|
Other interest income
|
4
|
|
|
8
|
|
|
7
|
|
Non-service cost components of net periodic benefit income (a)
|
116
|
|
|
90
|
|
|
70
|
|
Miscellaneous income
|
13
|
|
|
6
|
|
|
8
|
|
Donations
|
(25)
|
|
(b)
|
(12)
|
|
|
(33)
|
|
Miscellaneous expense
|
(14)
|
|
|
(15)
|
|
|
(12)
|
|
Total Other Income, Net
|
$
|
151
|
|
|
$
|
130
|
|
|
$
|
102
|
|
Ameren Missouri:
|
|
|
|
|
|
Other Income, Net
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
27
|
|
Interest income on industrial development revenue bonds
|
25
|
|
|
25
|
|
|
26
|
|
Other interest income
|
1
|
|
|
1
|
|
|
2
|
|
Non-service cost components of net periodic benefit income (a)
|
46
|
|
|
18
|
|
|
17
|
|
Miscellaneous income
|
4
|
|
|
5
|
|
|
4
|
|
Donations
|
(12)
|
|
(b)
|
(3)
|
|
|
(14)
|
|
Miscellaneous expense
|
(7)
|
|
|
(7)
|
|
|
(6)
|
|
Total Other Income, Net
|
$
|
76
|
|
|
$
|
58
|
|
|
$
|
56
|
|
Ameren Illinois:
|
|
|
|
|
|
Other Income, Net
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
9
|
|
Interest income
|
3
|
|
|
6
|
|
|
6
|
|
Non-service cost components of net periodic benefit income (a)
|
48
|
|
|
47
|
|
|
34
|
|
Miscellaneous income
|
6
|
|
|
3
|
|
|
3
|
|
Donations
|
(5)
|
|
|
(5)
|
|
|
(6)
|
|
Miscellaneous expense
|
(6)
|
|
|
(7)
|
|
|
(4)
|
|
Total Other Income, Net
|
$
|
59
|
|
|
$
|
53
|
|
|
$
|
42
|
|
(a)For the years ended December 31, 2020, 2019, and 2018, the non-service cost components of net periodic benefit income were adjusted by amounts deferred of $(4) million, $29 million, and $17 million, respectively, due to a tracker for the difference between the level of such costs incurred by Ameren Missouri under GAAP and the level of such costs included in rates.
(b)Includes $8 million pursuant to Ameren Missouri’s March 2020 electric rate order. See Note 2 – Rate and Regulatory Matters for additional information.
NOTE 7 – DERIVATIVE FINANCIAL INSTRUMENTS
We use derivatives to manage the risk of changes in market prices for natural gas, power, and uranium, as well as the risk of changes in rail transportation surcharges through fuel oil hedges. Such price fluctuations may cause the following:
•an unrealized appreciation or depreciation of our contracted commitments to purchase or sell when purchase or sale prices under the commitments are compared with current commodity prices;
•market values of natural gas and uranium inventories that differ from the cost of those commodities in inventory;
•actual cash outlays for the purchase of these commodities that differ from anticipated cash outlays; and
•actual off-system sales revenues that differ from anticipated revenues.
The derivatives that we use to hedge these risks are governed by our risk management policies for forward contracts, futures, options, and swaps. Our net positions are continually assessed within our structured hedging programs to determine whether new or offsetting transactions are required. The goal of the hedging program is generally to mitigate financial risks while ensuring that sufficient volumes are
available to meet our requirements. Contracts we enter into as part of our risk management program may be settled financially, settled by physical delivery, or net settled with the counterparty.
All contracts considered to be derivative instruments are required to be recorded on the balance sheet at their fair values, unless the NPNS exception applies. See Note 8 – Fair Value Measurements for discussion of our methods of assessing the fair value of derivative instruments. Many of our physical contracts, such as our purchased power contracts, qualify for the NPNS exception to derivative accounting rules. The revenue or expense on NPNS contracts is recognized at the contract price upon physical delivery. The following disclosures exclude NPNS contracts and other non-derivative commodity contracts that are accounted for under the accrual method of accounting.
If we determine that a contract meets the definition of a derivative and is not eligible for the NPNS exception, we review the contract to determine whether the resulting gains or losses qualify for regulatory deferral. Derivative contracts that qualify for regulatory deferral are recorded at fair value, with changes in fair value recorded as regulatory assets or liabilities in the period in which the change occurs. We believe derivative losses and gains deferred as regulatory assets and liabilities are probable of recovery, or refund, through future rates charged to customers. Regulatory assets and liabilities are amortized to operating income as related losses and gains are reflected in rates charged to customers. Therefore, gains and losses on these derivatives have no effect on operating income. As of December 31, 2020 and 2019, all contracts that met the definition of a derivative and were not eligible for the NPNS exception received regulatory deferral. Cash flows for all derivative financial instruments are classified in cash flows from operating activities.
The following table presents open gross commodity contract volumes by commodity type for derivative assets and liabilities as of December 31, 2020 and 2019. As of December 31, 2020, these contracts extended through October 2023, March 2026, May 2032, and March 2023 for fuel oils, natural gas, power, and uranium, respectively.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantity (in millions, except as indicated)
|
|
2020
|
2019
|
Commodity
|
Ameren Missouri
|
Ameren Illinois
|
Ameren
|
Ameren Missouri
|
Ameren Illinois
|
Ameren
|
Fuel oils (in gallons)
|
43
|
|
—
|
|
43
|
|
58
|
|
—
|
|
58
|
|
Natural gas (in mmbtu)
|
33
|
|
114
|
|
147
|
|
20
|
|
136
|
|
156
|
|
Power (in MWhs)
|
6
|
|
7
|
|
13
|
|
5
|
|
7
|
|
12
|
|
Uranium (pounds in thousands)
|
365
|
|
—
|
|
365
|
|
565
|
|
—
|
|
565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the carrying value and balance sheet location of all derivative commodity contracts, none of which were designated as hedging instruments, as of December 31, 2020 and 2019:
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|
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|
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|
|
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|
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|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
Commodity
|
Balance Sheet Location
|
|
Ameren
Missouri
|
|
|
Ameren
Illinois
|
|
|
Ameren
|
|
|
|
Ameren
Missouri
|
|
|
Ameren
Illinois
|
|
|
Ameren
|
Fuel oils
|
Other current assets
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Other assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
Other current assets
|
|
1
|
|
|
|
8
|
|
|
|
9
|
|
|
|
|
—
|
|
|
|
3
|
|
|
|
3
|
|
|
Other assets
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power
|
Other current assets
|
|
7
|
|
|
|
—
|
|
|
|
7
|
|
|
|
|
14
|
|
|
|
—
|
|
|
|
14
|
|
|
Other assets
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
$
|
12
|
|
|
$
|
10
|
|
|
$
|
22
|
|
|
|
$
|
22
|
|
|
$
|
4
|
|
|
$
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel oils
|
Other current liabilities
|
$
|
7
|
|
|
$
|
—
|
|
|
$
|
7
|
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
Other deferred credits and liabilities
|
|
2
|
|
|
|
—
|
|
|
|
2
|
|
|
|
|
3
|
|
|
|
—
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
Other current liabilities
|
|
1
|
|
|
|
1
|
|
|
|
2
|
|
|
|
|
1
|
|
|
|
12
|
|
|
|
13
|
|
|
Other deferred credits and liabilities
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
|
|
|
1
|
|
|
|
6
|
|
|
|
7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power
|
Other current liabilities
|
|
3
|
|
|
|
17
|
|
|
|
20
|
|
|
|
|
2
|
|
|
|
17
|
|
|
|
19
|
|
|
Other deferred credits and liabilities
|
|
8
|
|
|
|
181
|
|
|
|
189
|
|
|
|
|
1
|
|
|
|
207
|
|
|
|
208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Uranium
|
Other deferred credits and liabilities
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
1
|
|
|
|
—
|
|
|
|
1
|
|
|
Total liabilities
|
$
|
21
|
|
|
$
|
200
|
|
|
$
|
221
|
|
|
|
$
|
13
|
|
|
$
|
242
|
|
|
$
|
255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
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|
|
|
|
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|
|
|
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|
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|
|
|
|
|
|
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|
|
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|
|
|
|
|
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The Ameren Companies elect to present the fair value amounts of derivative assets and derivative liabilities subject to an enforceable master netting arrangement or similar agreement at the gross amounts on the balance sheet. However, if the gross amounts recognized on the balance sheet were netted with derivative instruments and cash collateral received or posted, the net amounts would not be materially different from the gross amounts at December 31, 2020 and 2019.
Credit Risk
In determining our concentrations of credit risk related to derivative instruments, we review our individual counterparties and categorize each counterparty into groupings according to the primary business in which each engages. As of December 31, 2020, if counterparty groups were to fail completely to perform on contracts, the Ameren Companies’ maximum exposure related to derivative assets would have been immaterial with or without consideration of the application of master netting arrangements or similar agreements and collateral held.
Certain of our derivative instruments contain collateral provisions tied to the Ameren Companies’ credit ratings. If our credit ratings were downgraded below investment grade, or if a counterparty with reasonable grounds for uncertainty regarding our ability to satisfy an obligation requested adequate assurance of performance, additional collateral postings might be required. The additional collateral required is the net liability position allowed under the master netting arrangements or similar agreements, assuming (1) the credit risk-related contingent features underlying these arrangements were triggered and (2) those counterparties with rights to do so requested collateral. As of December 31, 2020, the aggregate fair value of derivative instruments with credit risk-related contingent features in a gross liability position, the cash collateral posted, and the aggregate amount of additional collateral that counterparties could require were each immaterial to Ameren, Ameren Missouri, and Ameren Illinois.
NOTE 8 – FAIR VALUE MEASUREMENTS
Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We use various methods to determine fair value, including market, income, and cost approaches. With these approaches, we adopt certain assumptions that market participants would use in pricing the asset or liability, including assumptions about market risk or the risks inherent in the inputs to the valuation. Inputs to valuation can be readily observable, market-corroborated, or unobservable. We use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Authoritative accounting guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. All financial assets and liabilities carried at fair value are classified and disclosed in one of the following three hierarchy levels:
Level 1 (quoted prices in active markets for identical assets or liabilities): Inputs based on quoted prices in active markets for identical assets or liabilities. Level 1 assets and liabilities are primarily exchange-traded derivatives, cash and cash equivalents, and listed equity securities.
The market approach is used to measure the fair value of equity securities held in Ameren Missouri’s nuclear decommissioning trust fund. Equity securities in this fund are representative of the S&P 500 index, excluding securities of Ameren Corporation, owners and/or operators of nuclear power plants, and the trustee and investment managers. The S&P 500 index comprises stocks of large-capitalization companies.
Level 2 (significant other observable inputs): Market-based inputs corroborated by third-party brokers or exchanges based on transacted market data. Level 2 assets and liabilities include certain assets held in Ameren Missouri’s nuclear decommissioning trust fund, including United States Treasury and agency securities, corporate bonds and other fixed-income securities, and certain over-the-counter derivative instruments, including natural gas and financial power transactions.
Fixed income securities are valued by using prices from independent industry-recognized data vendors who provide values that are either exchange-based or matrix-based. The fair value measurements of fixed-income securities classified as Level 2 are based on inputs other than quoted prices that are observable for the asset or liability. Examples are matrix pricing, market corroborated pricing, and inputs such as yield curves and indices.
Derivative instruments classified as Level 2 are valued by corroborated observable inputs, such as pricing services or prices from similar instruments that trade in liquid markets. Our development and corroboration process entails obtaining multiple quotes or prices from outside sources. To derive our forward view to price our derivative instruments at fair value, we average the bid/ask spreads to the midpoints. To validate forward prices obtained from outside parties, we compare the pricing to recently settled market transactions. Additionally, a review of all sources is performed to identify any anomalies or potential errors. Further, we consider the volume of transactions on certain trading platforms in our reasonableness assessment of the averaged midpoints. The value of natural gas derivative contracts is based upon exchange closing prices without significant unobservable adjustments. The value of power derivative contracts is based upon exchange closing prices or the use of multiple forward prices provided by third parties. The prices are averaged and shaped to a monthly profile when needed without significant unobservable adjustments.
Level 3 (significant other unobservable inputs): Unobservable inputs that are not corroborated by market data. Level 3 assets and liabilities are valued by internally developed models and assumptions or methodologies that use significant unobservable inputs. Level 3 assets and liabilities include derivative instruments that trade in less liquid markets, where pricing is largely unobservable. We value Level 3
instruments by using pricing models with inputs that are often unobservable in the market, such as certain internal assumptions, quotes or prices from outside sources not supported by a liquid market, or trend rates.
We perform an analysis each quarter to determine the appropriate hierarchy level of the assets and liabilities subject to fair value measurements. Financial assets and liabilities are classified in their entirety according to the lowest level of input that is significant to the fair value measurement. All assets and liabilities whose fair value measurement is based on significant unobservable inputs are classified as Level 3.
We consider nonperformance risk in our valuation of derivative instruments by analyzing our own credit standing and the credit standing of our counterparties, and by considering any credit enhancements (e.g., collateral). Included in our valuation, and based on current market conditions, is a valuation adjustment for counterparty default derived from market data such as the price of credit default swaps, bond yields, and credit ratings. No material gains or losses related to valuation adjustments for counterparty default risk were recorded at Ameren, Ameren Missouri, or Ameren Illinois in 2020, 2019, or 2018. At December 31, 2020 and 2019, the counterparty default risk valuation adjustment related to derivative contracts was immaterial for Ameren, Ameren Missouri, and Ameren Illinois.
The following table sets forth, by level within the fair value hierarchy, our assets and liabilities measured at fair value on a recurring basis as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets – commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel oils
|
$
|
—
|
|
$
|
—
|
|
$
|
2
|
|
$
|
2
|
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6
|
|
$
|
6
|
|
|
|
Natural gas
|
—
|
|
3
|
|
—
|
|
3
|
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
Power
|
2
|
|
—
|
|
5
|
|
7
|
|
|
|
—
|
|
2
|
|
14
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total derivative assets – commodity contracts
|
$
|
2
|
|
$
|
3
|
|
$
|
7
|
|
$
|
12
|
|
|
|
$
|
—
|
|
$
|
2
|
|
$
|
20
|
|
$
|
22
|
|
|
|
Nuclear decommissioning trust fund:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. large capitalization
|
$
|
680
|
|
$
|
—
|
|
$
|
—
|
|
$
|
680
|
|
|
|
$
|
569
|
|
$
|
—
|
|
$
|
—
|
|
$
|
569
|
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury and agency securities
|
—
|
|
115
|
|
—
|
|
115
|
|
|
|
—
|
|
107
|
|
—
|
|
107
|
|
|
|
Corporate bonds
|
—
|
|
115
|
|
—
|
|
115
|
|
|
|
—
|
|
93
|
|
—
|
|
93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
—
|
|
67
|
|
—
|
|
67
|
|
|
|
—
|
|
73
|
|
—
|
|
73
|
|
|
|
Total nuclear decommissioning trust fund
|
$
|
680
|
|
$
|
297
|
|
$
|
—
|
|
$
|
977
|
|
(a)
|
|
$
|
569
|
|
$
|
273
|
|
$
|
—
|
|
$
|
842
|
|
(a)
|
|
Total Ameren Missouri
|
$
|
682
|
|
$
|
300
|
|
$
|
7
|
|
$
|
989
|
|
|
|
$
|
569
|
|
$
|
275
|
|
$
|
20
|
|
$
|
864
|
|
|
Ameren Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets – commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
—
|
|
$
|
6
|
|
$
|
4
|
|
$
|
10
|
|
|
|
$
|
—
|
|
$
|
1
|
|
$
|
3
|
|
$
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets – commodity contracts(b)
|
$
|
2
|
|
$
|
9
|
|
$
|
11
|
|
$
|
22
|
|
|
|
$
|
—
|
|
$
|
3
|
|
$
|
23
|
|
$
|
26
|
|
|
|
Nuclear decommissioning trust fund(c)
|
680
|
|
297
|
|
—
|
|
977
|
|
(a)
|
|
569
|
|
273
|
|
—
|
|
842
|
|
(a)
|
|
Total Ameren
|
$
|
682
|
|
$
|
306
|
|
$
|
11
|
|
$
|
999
|
|
|
|
$
|
569
|
|
$
|
276
|
|
$
|
23
|
|
$
|
868
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities – commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel oils
|
$
|
6
|
|
$
|
—
|
|
$
|
3
|
|
$
|
9
|
|
|
|
$
|
1
|
|
$
|
—
|
|
$
|
6
|
|
$
|
7
|
|
|
|
Natural gas
|
—
|
|
1
|
|
—
|
|
1
|
|
|
|
—
|
|
2
|
|
—
|
|
2
|
|
|
|
Power
|
8
|
|
—
|
|
3
|
|
11
|
|
|
|
—
|
|
2
|
|
1
|
|
3
|
|
|
|
Uranium
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
—
|
|
1
|
|
1
|
|
|
|
Total Ameren Missouri
|
$
|
14
|
|
$
|
1
|
|
$
|
6
|
|
$
|
21
|
|
|
|
$
|
1
|
|
$
|
4
|
|
$
|
8
|
|
$
|
13
|
|
|
Ameren Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities – commodity contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas
|
$
|
—
|
|
$
|
1
|
|
$
|
1
|
|
$
|
2
|
|
|
|
$
|
3
|
|
$
|
12
|
|
$
|
3
|
|
$
|
18
|
|
|
|
Power
|
—
|
|
—
|
|
198
|
|
198
|
|
|
|
—
|
|
—
|
|
224
|
|
224
|
|
|
|
Total Ameren Illinois
|
$
|
—
|
|
$
|
1
|
|
$
|
199
|
|
$
|
200
|
|
|
|
$
|
3
|
|
$
|
12
|
|
$
|
227
|
|
$
|
242
|
|
|
Ameren
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative liabilities – commodity contracts(b)
|
$
|
14
|
|
$
|
2
|
|
$
|
205
|
|
$
|
221
|
|
|
|
$
|
4
|
|
$
|
16
|
|
$
|
235
|
|
$
|
255
|
|
|
(a)Balance excludes $5 million and $5 million of cash and cash equivalents, receivables, payables, and accrued income, net for December 31, 2020 and 2019, respectively.
(b)See the Ameren Missouri and Ameren Illinois sections of the table for a breakout of the fair value of Ameren’s derivative assets and liabilities by type of commodity.
(c)See the Ameren Missouri section of the table for a breakout of Ameren’s nuclear decommissioning trust fund by investment type.
See Note 10 – Retirement Benefits for tables that set forth, by level within the fair value hierarchy, Ameren’s pension and postretirement plan assets as of December 31, 2020 and 2019.
Level 3 fuel oils, natural gas and uranium derivative contract assets and liabilities measured at fair value on a recurring basis were immaterial for all periods presented. The following table presents the fair value reconciliation of Level 3 power derivative contract assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Ameren
Missouri
|
Ameren
Illinois
|
Ameren
|
|
|
Ameren
Missouri
|
Ameren
Illinois
|
Ameren
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance at January 1
|
$
|
13
|
|
$
|
(224)
|
|
$
|
(211)
|
|
|
|
$
|
—
|
|
$
|
(183)
|
|
$
|
(183)
|
|
Realized and unrealized gains (losses) included in regulatory assets/liabilities
|
15
|
|
8
|
|
23
|
|
|
|
23
|
|
(56)
|
|
(33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Settlements
|
(26)
|
|
18
|
|
(8)
|
|
|
|
(7)
|
|
15
|
|
8
|
|
|
|
|
|
|
|
|
|
|
Transfers out of Level 3
|
—
|
|
—
|
|
—
|
|
|
|
(3)
|
|
—
|
|
(3)
|
|
Ending balance at December 31
|
$
|
2
|
|
$
|
(198)
|
|
$
|
(196)
|
|
|
|
$
|
13
|
|
$
|
(224)
|
|
$
|
(211)
|
|
Change in unrealized gains (losses) related to assets/liabilities held at December 31
|
$
|
1
|
|
$
|
9
|
|
$
|
10
|
|
|
|
$
|
12
|
|
$
|
(54)
|
|
$
|
(42)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All gains or losses related to our Level 3 derivative commodity contracts are expected to be recovered or returned through customer rates; therefore, there is no impact to either net income or other comprehensive income resulting from changes in the fair value of these instruments.
The following table describes the valuation techniques and significant unobservable inputs utilized for the fair value of our Level 3 power derivative contract assets and liabilities as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
Weighted Average(b)
|
|
Commodity
|
Assets
|
Liabilities
|
|
Valuation Technique(s)
|
Unobservable Input(a)
|
Range
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
Power(c)
|
$
|
5
|
|
$
|
(201)
|
|
|
Discounted cash flow
|
Average forward peak and off-peak pricing – forwards/swaps ($/MWh)
|
23 – 37
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nodal basis ($/MWh)
|
(6) – 0
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trend rate (%)
|
2 – 6
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
Power(d)
|
$
|
14
|
|
$
|
(225)
|
|
|
Discounted cash flow
|
Average forward peak and off-peak pricing – forwards/swaps ($/MWh)
|
22 – 34
|
25
|
|
|
|
|
|
|
Nodal basis ($/MWh)
|
(6) – 0
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trend rate (%)
|
(1) – 0
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Generally, significant increases (decreases) in these inputs in isolation would result in a significantly higher (lower) fair value measurement.
(b)Unobservable inputs were weighted by relative fair value.
(c)Valuations through 2029 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2029 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
(d)Valuations through 2028 use visible forward prices adjusted for nodal-to-hub basis differentials. Valuations beyond 2028 use a trend rate factor and are similarly adjusted for nodal-to-hub basis differentials.
The following table sets forth, by level within the fair value hierarchy, the carrying amount and fair value of financial assets and liabilities disclosed, but not carried, at fair value as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying
Amount
|
|
Fair Value
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
Ameren:
|
December 31, 2020
|
Cash, cash equivalents, and restricted cash
|
$
|
301
|
|
|
$
|
301
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
301
|
|
Investments in industrial development revenue bonds(a)
|
256
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
256
|
|
Short-term debt
|
490
|
|
|
—
|
|
|
490
|
|
|
—
|
|
|
490
|
|
Long-term debt (including current portion)(a)
|
11,086
|
|
(b)
|
—
|
|
|
12,778
|
|
|
537
|
|
(c)
|
13,315
|
|
Ameren Missouri:
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash
|
$
|
145
|
|
|
$
|
145
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
145
|
|
Advances to money pool
|
139
|
|
|
—
|
|
|
139
|
|
|
—
|
|
|
139
|
|
Investments in industrial development revenue bonds(a)
|
256
|
|
|
—
|
|
|
256
|
|
|
—
|
|
|
256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (including current portion)(a)
|
5,104
|
|
(b)
|
—
|
|
|
6,160
|
|
|
—
|
|
|
6,160
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash
|
$
|
147
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrowings from money pool
|
19
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
19
|
|
Long-term debt (including current portion)
|
3,946
|
|
(b)
|
—
|
|
|
4,822
|
|
|
—
|
|
|
4,822
|
|
|
December 31, 2019
|
Ameren:
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash
|
$
|
176
|
|
|
$
|
176
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
Investments in industrial development revenue bonds(a)
|
263
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
263
|
|
Short-term debt
|
440
|
|
|
—
|
|
|
440
|
|
|
—
|
|
|
440
|
|
Long-term debt (including current portion)(a)
|
9,357
|
|
(b)
|
—
|
|
|
9,957
|
|
|
484
|
|
(c)
|
10,441
|
|
Ameren Missouri:
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash
|
$
|
39
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
|
Investments in industrial development revenue bonds(a)
|
263
|
|
|
—
|
|
|
263
|
|
|
—
|
|
|
263
|
|
Short-term debt
|
234
|
|
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (including current portion)(a)
|
4,190
|
|
(b)
|
—
|
|
|
4,772
|
|
|
—
|
|
|
4,772
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents, and restricted cash
|
$
|
125
|
|
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
53
|
|
|
—
|
|
|
53
|
|
|
—
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt (including current portion)
|
3,575
|
|
(b)
|
—
|
|
|
4,019
|
|
|
—
|
|
|
4,019
|
|
(a)Ameren and Ameren Missouri have investments in industrial development revenue bonds, classified as held-to-maturity and recorded in “Other Assets,” that are equal to the finance obligations for the Peno Creek and Audrain CT energy centers. As of December 31, 2020 and 2019, the carrying amount of both the investments in industrial development revenue bonds and the finance obligations approximated fair value.
(b)Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $84 million, $36 million, and $36 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2020. Included unamortized debt issuance costs, which were excluded from the fair value measurement, of $72 million, $30 million, and $34 million for Ameren, Ameren Missouri, and Ameren Illinois, respectively, as of December 31, 2019.
(c)The Level 3 fair value amount consists of ATXI’s senior unsecured notes.
NOTE 9 – CALLAWAY ENERGY CENTER
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. Ameren Missouri will evaluate all of its options for losses, including the applicability of insurance coverages. See below for additional information about Ameren Missouri’s insurance coverage for the Callaway Energy Center.
Spent Nuclear Fuel
Under the Nuclear Waste Policy Act of 1982, as amended, the DOE is responsible for disposing of spent nuclear fuel from the Callaway Energy Center and other commercial nuclear energy centers. As required by the act, Ameren Missouri and other utilities have entered into standard contracts with the DOE, which stated that the DOE would begin to dispose of spent nuclear fuel by 1998. However, the DOE failed to fulfill its disposal obligations, and Ameren Missouri and other nuclear energy center owners sued the DOE to recover costs incurred for
ongoing storage of their spent fuel. Ameren Missouri’s lawsuit against the DOE resulted in a settlement agreement that provides for annual reimbursement of additional spent fuel storage and related costs. Ameren Missouri received immaterial reimbursements from the DOE in the years ended December 31, 2020, 2019, and 2018. Ameren Missouri will continue to apply for reimbursement from the DOE for allowable costs associated with the ongoing storage of spent fuel. The DOE’s delay in carrying out its obligation to dispose of spent nuclear fuel from the Callaway Energy Center is not expected to adversely affect the continued operations of the energy center.
Decommissioning
Electric rates charged to customers provide for the recovery of the Callaway Energy Center’s decommissioning costs, which include decontamination, dismantling, and site restoration costs, over the expected life of the nuclear energy center. Amounts collected from customers are deposited into the external nuclear decommissioning trust fund to provide for the Callaway Energy Center’s decommissioning. It is assumed that the Callaway Energy Center site will be decommissioned after its retirement through the immediate dismantlement method and removed from service. The Callaway Energy Center’s operating license expires in 2044. Ameren and Ameren Missouri have recorded an ARO for the Callaway Energy Center decommissioning costs at fair value, which represents the present value of estimated future cash outflows. Annual decommissioning costs of $7 million are included in the costs used to establish electric rates for Ameren Missouri’s customers. Every three years, the MoPSC requires Ameren Missouri to file an updated cost study and funding analysis for decommissioning its Callaway Energy Center. An updated cost study and funding analysis was filed with the MoPSC in November 2020 and reflected within the ARO. Ameren Missouri’s filing supported no change in electric service rates for decommissioning costs. There is no deadline by which the MoPSC must issue an order regarding the filing.
Ameren and Ameren Missouri have classified the investments in debt and equity securities that are held in the nuclear decommissioning trust fund as available for sale, and have recorded all such investments at their fair market value at December 31, 2020 and 2019. Investments in the nuclear decommissioning trust fund have a target allocation of 60% to 70% in equity securities, with the balance invested in debt securities.
The fair value of the trust fund for Ameren Missouri’s Callaway Energy Center is reported as “Nuclear decommissioning trust fund” in Ameren’s and Ameren Missouri’s balance sheets. This amount is legally restricted and may be used only to fund the costs of nuclear decommissioning. Changes in the fair value of the trust fund are recorded as an increase or decrease to the nuclear decommissioning trust fund, with an offsetting adjustment to the regulatory liability related to AROs. This reporting is consistent with the method used to account for the decommissioning costs recovered in rates. See Note 2 – Rate and Regulatory Matters for the regulatory liability recorded at December 31, 2020. If the assumed return on trust assets is not earned, Ameren Missouri believes that it is probable that any additional funding requirements resulting from such earnings deficiency will be recovered in customer rates.
The following table presents proceeds from the sale and maturities of investments in Ameren Missouri’s nuclear decommissioning trust fund and the gross realized gains and losses resulting from those sales for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
Proceeds from sales and maturities
|
$
|
183
|
|
|
$
|
260
|
|
|
$
|
299
|
|
Gross realized gains
|
10
|
|
|
10
|
|
|
18
|
|
Gross realized losses
|
3
|
|
|
2
|
|
|
5
|
|
The following table presents the cost and fair value of investments in debt and equity securities in Ameren’s and Ameren Missouri’s nuclear decommissioning trust fund at December 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Security Type
|
Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Fair Value
|
2020
|
|
|
|
|
|
|
|
Debt securities
|
$
|
272
|
|
|
$
|
25
|
|
|
$
|
—
|
|
|
$
|
297
|
|
Equity securities
|
198
|
|
|
491
|
|
|
9
|
|
|
680
|
|
Cash and cash equivalents
|
4
|
|
|
—
|
|
|
—
|
|
|
4
|
|
Other(a)
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Total
|
$
|
475
|
|
|
$
|
516
|
|
|
$
|
9
|
|
|
$
|
982
|
|
2019
|
|
|
|
|
|
|
|
Debt securities
|
$
|
262
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
273
|
|
Equity securities
|
183
|
|
|
393
|
|
|
7
|
|
|
569
|
|
Cash and cash equivalents
|
26
|
|
|
—
|
|
|
—
|
|
|
26
|
|
Other(a)
|
(21)
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
Total
|
$
|
450
|
|
|
$
|
404
|
|
|
$
|
7
|
|
|
$
|
847
|
|
(a)Represents net receivables and payables relating to pending securities sales, interest, and securities purchases.
The following table presents the costs and fair values of investments in debt securities in Ameren’s and Ameren Missouri’s nuclear decommissioning trust fund according to their contractual maturities at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
Fair Value
|
Less than 5 years
|
$
|
120
|
|
|
$
|
123
|
|
5 years to 10 years
|
69
|
|
|
75
|
|
Due after 10 years
|
83
|
|
|
99
|
|
Total
|
$
|
272
|
|
|
$
|
297
|
|
Insurance
The following table presents insurance coverage at Ameren Missouri’s Callaway Energy Center at December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Type and Source of Coverage
|
Most Recent
Renewal Date
|
Maximum Coverages
|
|
Maximum Assessments
for Single Incidents
|
|
Public liability and nuclear worker liability:
|
|
|
|
|
|
American Nuclear Insurers
|
January 1, 2021
|
$
|
450
|
|
|
$
|
—
|
|
|
Pool participation
|
(a)
|
13,348
|
|
(a)
|
138
|
|
(b)
|
|
|
$
|
13,798
|
|
(c)
|
$
|
138
|
|
|
Property damage:
|
|
|
|
|
|
NEIL and EMANI
|
April 1, 2020
|
$
|
3,200
|
|
(d)
|
$
|
25
|
|
(e)
|
Replacement power:
|
|
|
|
|
|
NEIL
|
April 1, 2020
|
$
|
490
|
|
(f)
|
$
|
7
|
|
(e)
|
(a)Provided through mandatory participation in an industrywide retrospective premium assessment program. The maximum coverage available is dependent on the number of United States commercial reactors participating in the program.
(b)Retrospective premium under the Price-Anderson Act. This is subject to retrospective assessment with respect to a covered loss in excess of $450 million in the event of an incident at any licensed United States commercial reactor, payable at $21 million per year.
(c)Limit of liability for each incident under the Price-Anderson liability provisions of the Atomic Energy Act of 1954, as amended. This limit is subject to change to account for the effects of inflation and changes in the number of licensed power reactors.
(d)NEIL provides $2.7 billion in property damage, stabilization, decontamination, and premature decommissioning insurance for radiation events and $2.3 billion in property damage insurance for nonradiation events. EMANI provides $490 million in property damage insurance for both radiation and nonradiation events.
(e)All NEIL-insured plants could be subject to assessments should losses exceed the accumulated funds from NEIL.
(f)Provides replacement power cost insurance in the event of a prolonged accidental outage. Weekly indemnity up to $4.5 million for 52 weeks, which commences after the first 12 weeks of an outage, plus up to $3.6 million per week for a minimum of 71 weeks thereafter for a total not exceeding the policy limit of $490 million. Nonradiation events are limited to $328 million.
The Price-Anderson Act is a federal law that limits the liability for claims from an incident involving any licensed United States commercial nuclear energy center. The limit is based on the number of licensed reactors. The limit of liability and the maximum potential annual payments are adjusted at least every five years for inflation to reflect changes in the Consumer Price Index. The most recent five-year inflationary adjustment became effective in November 2018. Owners of a nuclear reactor cover this exposure through a combination of private insurance and mandatory participation in a financial protection pool, as established by the Price-Anderson Act.
Losses resulting from terrorist attacks on nuclear facilities insured by NEIL are subject to industrywide aggregates, such that terrorist acts against one or more commercial nuclear power plants within a stated time period would be treated as a single event, and the owners of the nuclear power plants would share the limit of liability. NEIL policies have an aggregate limit of $3.2 billion within a 12-month period for radiation events, or $1.8 billion for events not involving radiation contamination, resulting from terrorist attacks. The EMANI policies are not subject to industrywide aggregates in the event of terrorist attacks on nuclear facilities.
If losses from a nuclear incident at the Callaway Energy Center exceed the limits of, or are not covered by insurance, or if coverage is unavailable, Ameren Missouri is at risk for any uninsured losses. If a serious nuclear incident were to occur, it could have a material adverse effect on Ameren’s and Ameren Missouri’s results of operations, financial position, or liquidity.
NOTE 10 – RETIREMENT BENEFITS
The primary objective of the Ameren pension and postretirement benefit plans is to provide eligible employees with pension and postretirement health care and life insurance benefits. Ameren has defined benefit pension plans covering substantially all of its employees and has a postretirement benefit plan covering non-union employees hired before October 2015 and union employees hired before January 2020. Ameren Missouri and Ameren Illinois each participate in Ameren’s single-employer pension and other postretirement plans. All non-union employees participate in a cash balance pension plan. Ameren Missouri union employees hired after July 1, 2013, and Ameren Illinois union employees hired after October 15, 2012, participate in a cash balance pension plan. Ameren uses a measurement date of December 31 for its pension and postretirement benefit plans. Ameren’s qualified pension plan is the Ameren Retirement Plan. Ameren’s other postretirement plan is the Ameren Retiree Welfare Benefit Plan. Ameren also has an unfunded nonqualified pension plan, the Ameren
Supplemental Retirement Plan, which is available to provide certain management employees and retirees with a supplemental benefit when their qualified pension plan benefits are capped in compliance with Internal Revenue Code limitations. Only Ameren subsidiaries participate in the plans listed above.
Ameren’s pension and other postretirement benefit plans were overfunded by $249 million in the aggregate as of December 31, 2020. Ameren’s total unfunded obligation under its pension and other postretirement benefit plans was $216 million as of December 31, 2019. These net assets and liabilities are recorded in “Other assets,” “Other current liabilities,” and “Pension and other postretirement benefits” on Ameren’s consolidated balance sheet. The increase in the overfunded pension and postretirement benefit plans during 2020 was primarily the result of an increase in the return on plan assets of the pension and postretirement trusts offset by a 75 basis point decrease in the pension and other postretirement benefit plan discount rates used to determine the present value of the obligation. The overfunded pension and other postretirement benefit plans also resulted in regulatory liabilities on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ balance sheets.
The following table presents the net benefit liability/(asset) recorded on the balance sheets as of December 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
Ameren(a)
|
$
|
(249)
|
|
|
$
|
216
|
|
Ameren Missouri(a)
|
(25)
|
|
|
142
|
|
Ameren Illinois(a)
|
(210)
|
|
|
(16)
|
|
(a)Assets associated with pension and other postretirement benefits are recorded in “Other assets” on the balance sheet.
Ameren recognizes the overfunded and underfunded status of its pension and postretirement plans as an asset or a liability on its consolidated balance sheet, with offsetting entries to accumulated OCI and regulatory assets or liabilities. The following table presents the funded status of Ameren’s pension and postretirement benefit plans as of December 31, 2020 and December 31, 2019. It also provides the amounts included in regulatory assets or liabilities and accumulated OCI at December 31, 2020 and December 31, 2019, that have not been recognized in net periodic benefit costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
|
Pension
Benefits
|
|
Postretirement
Benefits
|
Accumulated benefit obligation at end of year
|
$
|
5,213
|
|
$
|
(a)
|
|
$
|
4,735
|
|
$
|
(a)
|
Change in benefit obligation:
|
|
|
|
|
|
|
|
Net benefit obligation at beginning of year
|
$
|
4,967
|
|
$
|
1,110
|
|
|
$
|
4,459
|
|
$
|
1,034
|
|
Service cost
|
110
|
|
|
19
|
|
|
88
|
|
|
18
|
|
Interest cost
|
174
|
|
|
39
|
|
|
187
|
|
|
43
|
|
Plan amendments
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Participant contributions
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
Actuarial loss
|
508
|
|
|
91
|
|
|
469
|
|
|
69
|
|
|
|
|
|
|
|
|
|
Benefits paid
|
(249)
|
|
|
(63)
|
|
|
(236)
|
|
|
(64)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net benefit obligation at end of year
|
5,510
|
|
|
1,204
|
|
|
4,967
|
|
|
1,110
|
|
Change in plan assets:
|
|
|
|
|
|
|
|
Fair value of plan assets at beginning of year
|
4,564
|
|
|
1,297
|
|
|
3,899
|
|
|
1,113
|
|
Actual return on plan assets
|
1,143
|
|
|
209
|
|
|
878
|
|
|
237
|
|
Employer contributions
|
52
|
|
|
2
|
|
|
23
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Participant contributions
|
—
|
|
|
8
|
|
|
—
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits paid
|
(249)
|
|
|
(63)
|
|
|
(236)
|
|
|
(64)
|
|
Fair value of plan assets at end of year
|
5,510
|
|
|
1,453
|
|
|
4,564
|
|
|
1,297
|
|
Funded status – deficiency (surplus)
|
—
|
|
|
(249)
|
|
|
403
|
|
|
(187)
|
|
Accrued benefit cost (asset) at December 31
|
$
|
—
|
|
$
|
(249)
|
|
|
$
|
403
|
|
$
|
(187)
|
|
Amounts recognized in the balance sheet consist of:
|
|
|
|
|
|
|
|
Noncurrent asset(b)
|
$
|
(39)
|
|
$
|
(249)
|
|
|
$
|
—
|
|
$
|
(187)
|
|
Current liability(c)
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
Noncurrent liability
|
37
|
|
|
—
|
|
|
401
|
|
|
—
|
|
Net liability (asset) recognized
|
$
|
—
|
|
$
|
(249)
|
|
|
$
|
403
|
|
$
|
(187)
|
|
Amounts recognized in regulatory assets or liabilities consist of:
|
|
|
|
|
|
|
|
Net actuarial (gain) loss
|
$
|
(138)
|
|
$
|
(200)
|
|
|
$
|
244
|
|
$
|
(170)
|
|
Prior service credit
|
—
|
|
|
(37)
|
|
|
—
|
|
|
(41)
|
|
|
|
|
|
|
|
|
|
Amounts recognized in accumulated OCI (pretax) consist of:
|
|
|
|
|
|
|
|
Net actuarial loss
|
5
|
|
|
6
|
|
|
26
|
|
|
4
|
|
|
|
|
|
|
|
|
|
Total
|
$
|
(133)
|
|
$
|
(231)
|
|
|
$
|
270
|
|
$
|
(207)
|
|
(a)Not applicable.
(b)Included in “Other assets” on Ameren’s consolidated balance sheet.
(c)Included in “Other current liabilities” on Ameren’s consolidated balance sheet.
The following table presents the assumptions used to determine our benefit obligations at December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Discount rate at measurement date
|
2.75
|
%
|
|
3.50
|
%
|
|
2.75
|
%
|
|
3.50
|
%
|
Increase in future compensation
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
Cash balance pension plan interest crediting rate
|
5.00
|
|
|
5.00
|
|
|
(a)
|
|
(a)
|
Medical cost trend rate (initial)(b)
|
(a)
|
|
(a)
|
|
5.00
|
|
|
5.00
|
|
Medical cost trend rate (ultimate)(b)
|
(a)
|
|
(a)
|
|
5.00
|
|
|
5.00
|
|
|
|
|
|
|
|
|
|
(a)Not applicable.
(b)Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.
Ameren determines discount rate assumptions by identifying a theoretical settlement portfolio of high-quality corporate bonds sufficient to provide for a plan’s projected benefit payments. The settlement portfolio of bonds is selected from a pool of more than 830 high-quality
corporate bonds. A single discount rate is then determined; that rate results in a discounted value of the plan’s benefit payments that equates to the market value of the selected bonds. During 2020, Ameren adopted the updated Society of Actuaries mortality table and adopted the Society of Actuaries 2020 Mortality Improvement Scale. The updated mortality table reflects lower life expectancy in aggregate compared with the 2019 Society of Actuaries mortality table. The updated improvement scale assumes a lower rate of mortality improvement, compared with the 2019 Mortality Improvement Scale. The impact of the adoption of the table and the scale results in a decrease to our pension and other postretirement benefit obligations.
Funding
Pension benefits are based on the employees’ years of service, age, and compensation. Ameren’s pension plans are funded in compliance with income tax regulations, federal funding, and other regulatory requirements. As a result, Ameren expects to fund its pension plan at a level equal to the greater of the pension cost or the legally required minimum contribution. Based on its 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 and Ameren Illinois estimate that their portion of the future funding requirements will be 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. Our funding policy for postretirement benefits is primarily to fund the Voluntary Employee Beneficiary Association (VEBA) trusts to match the annual postretirement expense.
The following table presents the cash contributions made to our defined benefit retirement plans and to our postretirement plan during 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
|
Ameren Missouri
|
$
|
17
|
|
|
$
|
3
|
|
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
1
|
|
|
Ameren Illinois
|
27
|
|
|
19
|
|
|
35
|
|
|
1
|
|
|
1
|
|
|
1
|
|
|
Other
|
8
|
|
|
1
|
|
|
7
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
Ameren
|
$
|
52
|
|
|
$
|
23
|
|
|
$
|
60
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
Investment Strategy and Policies
Ameren manages plan assets in accordance with the “prudent investor” guidelines contained in ERISA. The investment committee, which includes members of senior management, approves and implements investment strategy and asset allocation guidelines for the plan assets. The investment committee’s goals are twofold: first, to ensure that sufficient funds are available to provide the benefits at the time they are payable; and second, to maximize total return on plan assets and to minimize expense volatility consistent with its tolerance for risk. Ameren delegates the task of investment management to specialists in each asset class. As appropriate, Ameren provides each investment manager with guidelines that specify allowable and prohibited investment types. The investment committee 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 were 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 adjusted 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. Ameren will use an expected return on plan assets for its pension and postretirement plan assets of 6.50% in 2021.
Ameren’s investment committee strives to assemble a portfolio of diversified assets that does not create a significant concentration of risks. The investment committee develops asset allocation guidelines between asset classes, and it creates diversification through investments in assets that differ by type (equity, debt, real estate), duration, market capitalization, country, style (growth or value), and industry, among other factors. The diversification of assets is displayed in the target allocation table below. The investment committee also routinely rebalances the plan assets to adhere to the diversification goals. The investment committee’s strategy reduces the concentration of investment risk; however, Ameren is still subject to overall market risk.
Effective January 2020, Ameren’s investment committee developed and implemented a liability hedging investment strategy for its qualified pension plans designed to reduce interest rate risk as part of an objective for its long-term investment strategy. The plan invests in derivative instruments mainly consisting of interest rate futures intended to extend the duration of the pension plan assets so that the assets are more closely aligned with the duration of the liabilities. In addition, part of Ameren’s investment strategy includes participation in a securities lending program, which allows it to lend eligible securities to third party borrowers. All loans are collateralized by at least 102% of the loaned asset’s market value and the collateral is invested in the form of cash, government obligations, and U.S. agency obligations.
Ameren’s fair value of securities loaned was $365 million and $246 million as of December 31, 2020, and 2019, respectively. Cash and securities obtained as collateral exceeded the fair value of the securities loaned as of December 31, 2020 and 2019.
The following table presents our target allocations for 2021 and our pension and postretirement plans’ asset categories as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Category
|
Target Allocation
2020
|
|
Percentage of Plan Assets at December 31,
|
2020
|
|
2019
|
Pension Plan:
|
|
|
|
|
|
Cash and cash equivalents
|
0% – 5%
|
|
1
|
%
|
|
3
|
%
|
Equity securities:
|
|
|
|
|
|
U.S. large-capitalization
|
21% – 31%
|
|
26
|
%
|
|
27
|
%
|
U.S. small- and mid-capitalization
|
3% – 13%
|
|
9
|
%
|
|
7
|
%
|
International
|
9% – 19%
|
|
15
|
%
|
|
14
|
%
|
Global
|
3% – 13%
|
|
9
|
%
|
|
9
|
%
|
Total equity
|
51% – 61%
|
|
59
|
%
|
|
57
|
%
|
Debt securities
|
35% – 45%
|
|
36
|
%
|
|
36
|
%
|
Real estate
|
0% – 9%
|
|
4
|
%
|
|
4
|
%
|
Private equity
|
0% – 5%
|
|
(a)
|
|
(a)
|
Total
|
|
|
100
|
%
|
|
100
|
%
|
Postretirement Plans:
|
|
|
|
|
|
Cash and cash equivalents
|
0% – 7%
|
|
3
|
%
|
|
1
|
%
|
Equity securities:
|
|
|
|
|
|
U.S. large-capitalization
|
23% – 33%
|
|
31
|
%
|
|
31
|
%
|
U.S. small- and mid-capitalization
|
3% – 13%
|
|
8
|
%
|
|
9
|
%
|
International
|
9% – 19%
|
|
15
|
%
|
|
14
|
%
|
Global
|
5% – 15%
|
|
10
|
%
|
|
11
|
%
|
Total equity
|
55% – 65%
|
|
64
|
%
|
|
65
|
%
|
Debt securities
|
33% – 43%
|
|
33
|
%
|
|
34
|
%
|
Total
|
|
|
100
|
%
|
|
100
|
%
|
(a)Less than 1% of plan assets.
In general, the United States large-capitalization equity investments are passively managed or indexed, whereas the international, global, United States small-capitalization, and United States mid-capitalization equity investments are actively managed by investment managers. Debt securities include a broad range of fixed-income vehicles. Debt security investments in high-yield securities and non-United-States-dollar-denominated securities are owned by the plans, but in limited quantities to reduce risk. Most of the debt security investments are under active management by investment managers. Real estate investments include private real estate vehicles; however, Ameren does not, by policy, hold direct investments in real estate property. In addition to the derivative investments included in the liability hedging investment strategy described above, Ameren’s investment committee also allows investment managers to use derivatives, such as index futures, foreign exchange futures, and options, in certain situations to increase or to reduce market exposure in an efficient and timely manner.
Fair Value Measurements of Plan Assets
Investments in the pension and postretirement benefit plans were stated at fair value as of December 31, 2020. The fair value of an asset is the amount that would be received upon its sale in an orderly transaction between market participants at the measurement date. Cash and cash equivalents have initial maturities of three months or less and are recorded at cost plus accrued interest. Investments traded in active markets on national or international securities exchanges are valued at closing prices on the measurement date or, if that is not a business day, on the last business day before that date. Securities traded in over-the-counter markets are valued by quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Investments measured under NAV as a practical expedient are based on the fair values of the underlying assets provided by the funds and their administrators. The fair value of real estate investments is based on NAV; it is determined by annual appraisal reports prepared by an independent real estate appraiser. Investments measured at NAV often provide for daily, monthly, or quarterly redemptions with 60 or less days of notice depending on the fund. For some funds, redemption may also require approval from the fund’s board of directors. Derivative contracts are valued at fair value, as determined by the investment managers (or independent third parties on behalf of the investment managers), who use proprietary models and take into consideration exchange quotations on underlying instruments, dealer quotations, and other market information.
The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the pension plans’ assets measured at fair value and NAV as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
|
NAV
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
|
NAV
|
|
Total
|
Cash and cash equivalents
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
145
|
|
|
$
|
145
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
139
|
|
|
$
|
139
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. large-capitalization
|
—
|
|
|
—
|
|
|
|
1,511
|
|
|
1,511
|
|
|
|
—
|
|
|
—
|
|
|
|
1,253
|
|
|
1,253
|
|
U.S. small- and mid-capitalization
|
513
|
|
|
—
|
|
|
|
—
|
|
|
513
|
|
|
|
344
|
|
|
—
|
|
|
|
—
|
|
|
344
|
|
International
|
375
|
|
|
—
|
|
|
|
492
|
|
|
867
|
|
|
|
296
|
|
|
—
|
|
|
|
363
|
|
|
659
|
|
Global
|
—
|
|
|
—
|
|
|
|
546
|
|
|
546
|
|
|
|
—
|
|
|
—
|
|
|
|
407
|
|
|
407
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate bonds
|
—
|
|
|
506
|
|
|
|
17
|
|
|
523
|
|
|
|
—
|
|
|
597
|
|
|
|
13
|
|
|
610
|
|
Municipal bonds
|
—
|
|
|
50
|
|
|
|
—
|
|
|
50
|
|
|
|
—
|
|
|
75
|
|
|
|
—
|
|
|
75
|
|
U.S. Treasury and agency securities
|
3
|
|
|
1,325
|
|
|
|
—
|
|
|
1,328
|
|
|
|
5
|
|
|
1,010
|
|
|
|
—
|
|
|
1,015
|
|
Other
|
(5)
|
|
|
8
|
|
|
|
—
|
|
|
3
|
|
|
|
—
|
|
|
8
|
|
|
|
—
|
|
|
8
|
|
Real estate
|
—
|
|
|
—
|
|
|
|
208
|
|
|
208
|
|
|
|
—
|
|
|
—
|
|
|
|
211
|
|
|
211
|
|
Private equity
|
—
|
|
|
—
|
|
|
|
2
|
|
|
2
|
|
|
|
—
|
|
|
—
|
|
|
|
2
|
|
|
2
|
|
Total
|
$
|
886
|
|
|
$
|
1,889
|
|
|
|
$
|
2,921
|
|
|
$
|
5,696
|
|
|
|
$
|
645
|
|
|
$
|
1,690
|
|
|
|
$
|
2,388
|
|
|
$
|
4,723
|
|
Less: Medical benefit assets(a)
|
|
|
|
|
|
|
|
(219)
|
|
|
|
|
|
|
|
|
|
|
(176)
|
|
Plus: Net receivables(b)
|
|
|
|
|
|
|
|
33
|
|
|
|
|
|
|
|
|
|
|
17
|
|
Fair value of pension plans’ assets
|
|
|
|
|
|
|
|
$
|
5,510
|
|
|
|
|
|
|
|
|
|
|
$
|
4,564
|
|
(a)Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation.
(b)Receivables related to pending securities sales, offset by payables related to pending securities purchases.
The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the postretirement benefit plans’ assets measured at fair value and NAV as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Level 1
|
|
Level 2
|
|
|
NAV
|
|
Total
|
|
|
Level 1
|
|
Level 2
|
|
|
NAV
|
|
Total
|
Cash and cash equivalents
|
$
|
38
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
38
|
|
|
|
$
|
12
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
12
|
|
Equity securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. large-capitalization
|
279
|
|
|
—
|
|
|
|
107
|
|
|
386
|
|
|
|
238
|
|
|
—
|
|
|
|
112
|
|
|
350
|
|
U.S. small- and mid-capitalization
|
104
|
|
|
—
|
|
|
|
—
|
|
|
104
|
|
|
|
93
|
|
|
—
|
|
|
|
—
|
|
|
93
|
|
International
|
75
|
|
|
—
|
|
|
|
107
|
|
|
182
|
|
|
|
59
|
|
|
—
|
|
|
|
102
|
|
|
161
|
|
Global
|
—
|
|
|
—
|
|
|
|
120
|
|
|
120
|
|
|
|
—
|
|
|
—
|
|
|
|
120
|
|
|
120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Municipal bonds
|
—
|
|
|
106
|
|
|
|
—
|
|
|
106
|
|
|
|
—
|
|
|
107
|
|
|
|
—
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
—
|
|
|
—
|
|
|
|
295
|
|
|
295
|
|
|
|
—
|
|
|
—
|
|
|
|
277
|
|
|
277
|
|
Total
|
$
|
496
|
|
|
$
|
106
|
|
|
|
$
|
629
|
|
|
$
|
1,231
|
|
|
|
$
|
402
|
|
|
$
|
107
|
|
|
|
$
|
611
|
|
|
$
|
1,120
|
|
Plus: Medical benefit assets(a)
|
|
|
|
|
|
|
|
219
|
|
|
|
|
|
|
|
|
|
|
176
|
|
Plus: Net receivables(b)
|
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
1
|
|
Fair value of postretirement benefit plans’ assets
|
|
|
|
|
|
|
|
$
|
1,453
|
|
|
|
|
|
|
|
|
|
|
$
|
1,297
|
|
(a)Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation. These 401(h) assets are included in the pension plan assets shown above.
(b)Receivables related to pending securities sales, offset by payables related to pending securities purchases.
Net Periodic Benefit Cost
The following table presents the components of the net periodic benefit cost of Ameren’s pension and postretirement benefit plans during 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
|
Postretirement Benefits
|
|
2020
|
|
2019
|
|
2018
|
|
|
2020
|
|
2019
|
|
2018
|
Service cost(a)
|
$
|
110
|
|
|
$
|
88
|
|
|
$
|
100
|
|
|
|
$
|
19
|
|
|
$
|
18
|
|
|
$
|
21
|
|
Non-service cost components:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest cost
|
174
|
|
|
187
|
|
|
169
|
|
|
|
39
|
|
|
43
|
|
|
40
|
|
Expected return on plan assets
|
(291)
|
|
|
(276)
|
|
|
(276)
|
|
|
|
(80)
|
|
|
(77)
|
|
|
(77)
|
|
Amortization of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prior service credit
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
|
|
(4)
|
|
|
(5)
|
|
|
(4)
|
|
Actuarial (gain) loss
|
60
|
|
|
25
|
|
|
68
|
|
|
|
(9)
|
|
|
(15)
|
|
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-service cost components(b)
|
$
|
(58)
|
|
|
$
|
(65)
|
|
|
$
|
(40)
|
|
|
|
$
|
(54)
|
|
|
$
|
(54)
|
|
|
$
|
(47)
|
|
Net periodic benefit cost (income)
|
$
|
52
|
|
|
$
|
23
|
|
|
$
|
60
|
|
|
|
$
|
(35)
|
|
|
$
|
(36)
|
|
|
$
|
(26)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Service cost, net of capitalization, is reflected in “Operating Expenses - Other operations and maintenance” on Ameren’s statement of income.
(b) Non-service cost components are reflected in “Other Income, Net” on Ameren’s consolidated statement of income. See Note 6 – Other Income, Net for additional information.
The Ameren Companies are responsible for their share of the pension and postretirement benefit costs. The following table presents the pension costs and the postretirement benefit costs incurred for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Costs
|
|
Postretirement Costs
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
Ameren Missouri(a)
|
$
|
22
|
|
|
$
|
5
|
|
|
$
|
22
|
|
|
$
|
(5)
|
|
|
$
|
(6)
|
|
|
$
|
(1)
|
|
Ameren Illinois
|
32
|
|
|
20
|
|
|
39
|
|
|
(31)
|
|
|
(30)
|
|
|
(25)
|
|
Other
|
(2)
|
|
|
(2)
|
|
|
(1)
|
|
|
1
|
|
|
—
|
|
|
—
|
|
Ameren
|
$
|
52
|
|
|
$
|
23
|
|
|
$
|
60
|
|
|
$
|
(35)
|
|
|
$
|
(36)
|
|
|
$
|
(26)
|
|
(a)Does not include the impact of the tracker for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri and the level of such costs included in customer rates.
The expected pension and postretirement benefit payments from qualified trust and company funds, which reflect expected future service, as of December 31, 2020, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
Paid from
Qualified
Trust Funds
|
|
Paid from
Company
Funds
|
|
Paid from
Qualified
Trust Funds
|
|
Paid from
Company
Funds
|
|
|
2021
|
$
|
260
|
|
|
$
|
2
|
|
|
$
|
58
|
|
|
$
|
2
|
|
|
|
2022
|
267
|
|
|
2
|
|
|
60
|
|
|
2
|
|
|
|
2023
|
274
|
|
|
3
|
|
|
61
|
|
|
2
|
|
|
|
2024
|
278
|
|
|
3
|
|
|
62
|
|
|
2
|
|
|
|
2025
|
283
|
|
|
3
|
|
|
61
|
|
|
2
|
|
|
|
2026 – 2030
|
1,454
|
|
|
12
|
|
|
303
|
|
|
11
|
|
|
|
The following table presents the assumptions used to determine net periodic benefit cost for our pension and postretirement benefit plans for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
2020
|
|
2019
|
|
2018
|
|
2020
|
|
2019
|
|
2018
|
Discount rate at measurement date
|
3.50
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
|
3.50
|
%
|
|
4.25
|
%
|
|
3.50
|
%
|
Expected return on plan assets
|
7.00
|
|
|
7.00
|
|
|
7.00
|
|
|
7.00
|
|
|
7.00
|
|
|
7.00
|
|
Increase in future compensation
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
|
3.50
|
|
Cash balance pension plan interest crediting rate
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
|
(a)
|
|
(a)
|
|
(a)
|
Medical cost trend rate (initial)(b)
|
(a)
|
|
(a)
|
|
(a)
|
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
Medical cost trend rate (ultimate)(b)
|
(a)
|
|
(a)
|
|
(a)
|
|
5.00
|
|
|
5.00
|
|
|
5.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Not applicable.
(b)Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.
The table below reflects the sensitivity of Ameren’s plans to potential changes in key assumptions for the year ended December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Postretirement Benefits
|
|
Service Cost
and Interest
Cost
|
|
Expected
Return on
Assets
|
|
Projected
Benefit
Obligation
|
|
Service Cost
and Interest
Cost
|
|
Expected
Return on
Assets
|
|
Postretirement
Benefit
Obligation
|
0.25% decrease in discount rate
|
$
|
(1)
|
|
|
$
|
—
|
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
42
|
|
0.25% decrease in return on assets
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
0.25% increase in future compensation
|
2
|
|
|
—
|
|
|
20
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Ameren sponsors a 401(k) plan for eligible employees. The Ameren 401(k) plan covered all eligible Ameren employees at December 31, 2020. The plan allows employees to contribute a portion of their compensation in accordance with specific guidelines. Ameren matches a percentage of the employee contributions up to certain limits. The following table presents the portion of the matching contribution to the Ameren 401(k) plan attributable to each of the Ameren Companies for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
Ameren Missouri
|
$
|
20
|
|
|
$
|
19
|
|
|
$
|
17
|
|
Ameren Illinois
|
17
|
|
|
16
|
|
|
15
|
|
Other
|
1
|
|
|
—
|
|
|
1
|
|
Ameren
|
$
|
38
|
|
|
$
|
35
|
|
|
$
|
33
|
|
NOTE 11 – STOCK-BASED COMPENSATION
The 2014 Omnibus Incentive Compensation Plan is Ameren’s long-term stock-based compensation plan for eligible employees and directors. It provides for a maximum of 8 million common shares to be available for grant to eligible employees and directors. At December 31, 2020, there were 2.3 million common shares remaining for grant. Awards may be stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance share units, cash-based awards, and other stock-based awards. Ameren used newly issued shares to fulfill its stock-based compensation obligations for 2020, 2019, and 2018, and intends to use newly issued shares to fulfill its stock-based compensation obligations for 2021.
The following table summarizes Ameren’s nonvested performance share unit and restricted stock unit activity for the year ended December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Share Units – Market Condition(a)
|
|
Performance Share Units – Performance Condition(b)
|
|
Restricted Stock Units
|
|
Share
Units
|
|
Weighted-average Fair Value per Share Unit
|
|
Shares
|
|
Weighted-average Fair Value per Share Unit
|
|
Stock
Units
|
|
Weighted-average Fair Value per Stock Unit
|
Nonvested at January 1, 2020(c)
|
539,877
|
|
|
$
|
63.79
|
|
|
—
|
|
|
$
|
—
|
|
|
220,277
|
|
|
$
|
61.13
|
|
Granted(d)
|
267,154
|
|
|
82.49
|
|
|
43,052
|
|
|
76.69
|
|
|
173,571
|
|
|
76.91
|
|
Forfeitures
|
(16,303)
|
|
|
73.42
|
|
|
(1,155)
|
|
|
76.80
|
|
|
(7,507)
|
|
|
69.89
|
|
Vested and undistributed(e)
|
(178,802)
|
|
|
69.87
|
|
|
(7,607)
|
|
|
76.78
|
|
|
(80,180)
|
|
|
66.72
|
|
Vested and distributed
|
(147,787)
|
|
|
59.16
|
|
|
—
|
|
|
—
|
|
|
(2,466)
|
|
|
54.30
|
|
Performance share adjustment
|
—
|
|
|
—
|
|
|
(2,394)
|
|
|
76.66
|
|
|
—
|
|
|
—
|
|
Nonvested at December 31, 2020(f)
|
464,139
|
|
|
$
|
73.34
|
|
|
31,896
|
|
|
$
|
76.66
|
|
|
303,695
|
|
|
$
|
68.52
|
|
(a)The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the specified market conditions. Compensation cost on nonforfeited awards is recognized regardless of whether Ameren achieves the specified market conditions.
(b)The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the performance goals. Compensation cost is recognized ratably over the requisite service period only for awards for which it is probable that the performance condition will be satisfied. The performance share adjustment represents the change in the probability that a performance condition will be satisfied.
(c)Does not include 503,283 performance share units for market performance and 79,854 restricted stock units that were vested and undistributed.
(d)In September 2020, certain executive officers were granted an additional 37,104 restricted stock units with a grant date fair value of $3 million, which will vest after three years on September 17, 2023. The awards do not provide for pro rata vesting in connection with the executive officer’s retirement.
(e)Vested and undistributed units are awards that vest on a pro-rata basis due to attainment of retirement eligibility by certain employees, but have not yet been distributed. For vested and undistributed performance share units, the number of shares issued for retirement-eligible employees will vary depending on actual performance over the three-year performance period.
(f)Does not include 366,243 of performance share units for market performance, 7,607 of performance share units based on the achievement of renewable generation and energy storage installation targets, and 160,034 of restricted stock units that were vested and undistributed.
Performance Share Units – Market Condition
A market condition performance share unit vests and entitles an employee to receive shares of Ameren common stock (plus accumulated dividends) if, at the end of the three-year performance period, certain specified market conditions have been met and if the individual remains employed by Ameren through the required vesting period. The vesting period for share units awarded extends beyond the three-year performance period to the payout date, which is approximately 38 months after the grant date. In the event of a participant’s death or retirement at age 55 or older with five years or more of service, awards vest on a pro-rata basis over the three-year performance period. The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual company performance relative to the specified market conditions.
The fair value of each share unit is based on Ameren’s closing common share price at December 31st of the year prior to the award year and a Monte Carlo simulation. The Monte Carlo simulation is used to estimate expected share payout based on Ameren’s TSR for a three-year performance period relative to the designated peer group beginning January 1st of the award year. The simulation can produce a greater fair value for the share unit than the applicable closing common share price because it includes the weighted payout scenarios in which an increase in the share price has occurred. The significant assumptions used to calculate fair value also include a three-year risk-free rate, Ameren’s common stock volatility, volatility for the peer group, and Ameren’s attainment of a three-year average earnings per share threshold during the performance period. The following table presents the fair value of each share unit along with the significant assumptions used to calculate the fair value of each share unit for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
2019
|
2018
|
Fair value of share units awarded
|
$82.49
|
$67.42
|
$62.88
|
|
|
|
|
Three-year risk-free rate
|
1.62%
|
2.46%
|
1.98%
|
Ameren’s common stock volatility(a)
|
15%
|
17%
|
17%
|
Volatility range for the peer group(a)
|
14% – 28%
|
15% – 25%
|
15% – 23%
|
(a)Based on a historical period that is equal to the remaining term of the performance period as of the grant date.
Performance Share Units – Performance Condition
A performance condition share unit vests and entitles an employee to receive shares of Ameren common stock (plus accumulated dividends) if, at the end of the three-year performance period, Ameren has met the specified performance condition and if the individual remains employed by Ameren through the required vesting period. The vesting period for share units awarded extends beyond the three-year performance period to the payout date, which is approximately 38 months after the grant date. In the event of a participant’s death or retirement at age 55 or older with five years or more of service, awards vest on a pro-rata basis over the three-year performance period. The exact number of shares issued pursuant to a share unit varies from 0% to 200% of the target award, depending on actual performance conditions achieved. The specified performance condition is based on Ameren’s clean energy goals, specifically the achievement of renewable generation and energy storage installation targets. The grant-date fair value for an individual outcome of a performance condition is determined by Ameren’s closing common share price on the grant date.
Restricted Stock Units
Restricted stock units vest and entitle an employee to receive shares of Ameren common stock (plus accumulated dividends) if the individual remains employed with Ameren through the payment date of the awards. Generally, in the event of a participant’s death or retirement at age 55 or older with five years or more of service, awards vest on a pro-rata basis, except for retention RSUs that are periodically granted, which do not provide for pro rata vesting in connection with the employee’s retirement. The payout date of the awards is approximately 38 months after the grant date. The fair value of each restricted stock unit is determined by Ameren’s closing common share price on the grant date.
Stock-Based Compensation Expense
The following table presents the stock-based compensation expense for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
Ameren Missouri
|
$
|
5
|
|
|
$
|
4
|
|
|
$
|
4
|
|
Ameren Illinois
|
3
|
|
|
3
|
|
|
3
|
|
Other(a)
|
13
|
|
|
13
|
|
|
13
|
|
Ameren
|
21
|
|
|
20
|
|
|
20
|
|
Less income tax benefit
|
6
|
|
|
5
|
|
|
6
|
|
Stock-based compensation expense, net
|
$
|
15
|
|
|
$
|
15
|
|
|
$
|
14
|
|
(a)Represents compensation expense for employees of Ameren Services. These amounts are not included in the Ameren Missouri and Ameren Illinois amounts above.
Ameren settled performance share units and restricted stock units of $58 million, $83 million, and $54 million for the years ended December 31, 2020, 2019, and 2018. There were no significant stock-based compensation costs capitalized during the years ended December 31, 2020, 2019, and 2018. As of December 31, 2020, total compensation cost of $34 million related to nonvested awards not yet recognized is expected to be recognized over a weighted-average period of 22 months.
For the years ended December 31, 2020, 2019, and 2018, excess tax benefits associated with the settlement of stock-based compensation awards reduced income tax expense by $8 million, $15 million, and $6 million, respectively.
NOTE 12 – INCOME TAXES
Missouri Income Tax Rate
In 2018, legislation modifying Missouri tax law was enacted to decrease the state’s corporate income tax rate from 6.25% to 4%, effective January 1, 2020. As a result, in 2018, Ameren’s and Ameren Missouri’s accumulated deferred tax balances were revalued, resulting in a net decrease of $122 million to their accumulated deferred tax liability, which was offset by a regulatory liability. Additionally, Ameren recorded an immaterial amount to income tax expense. As a result of the March 2020 rate order, the effect of this tax decrease was reflected in customer rates on April 1, 2020. This income tax decrease did not have a material impact on the net income of Ameren (parent) and nonregistrant subsidiaries.
The following table presents the principal reasons for the difference between the effective income tax rate and the federal statutory corporate income tax rate for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois
|
|
Ameren
|
2020
|
|
|
|
|
|
Federal statutory corporate income tax rate
|
21
|
%
|
|
21
|
%
|
|
21
|
%
|
Increases (decreases) from:
|
|
|
|
|
|
Amortization of excess deferred income taxes
|
(16)
|
|
|
(3)
|
|
|
(9)
|
|
|
|
|
|
|
|
Amortization of deferred investment tax credit
|
(1)
|
|
|
(1)
|
|
|
(1)
|
|
State tax
|
3
|
|
|
7
|
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
(1)
|
|
Effective income tax rate
|
7
|
%
|
|
24
|
%
|
|
15
|
%
|
2019
|
|
|
|
|
|
Federal statutory corporate income tax rate
|
21
|
%
|
|
21
|
%
|
|
21
|
%
|
Increases (decreases) from:
|
|
|
|
|
|
Amortization of excess deferred income taxes
|
(11)
|
|
|
(4)
|
|
|
(7)
|
|
|
|
|
|
|
|
Amortization of deferred investment tax credit
|
(1)
|
|
|
—
|
|
|
(1)
|
|
State tax
|
5
|
|
|
7
|
|
|
6
|
|
|
|
|
|
|
|
Stock-based compensation
|
—
|
|
|
—
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective income tax rate
|
14
|
%
|
|
24
|
%
|
|
18
|
%
|
2018
|
|
|
|
|
|
Federal statutory corporate income tax rate
|
21
|
%
|
|
21
|
%
|
|
21
|
%
|
Increases (decreases) from:
|
|
|
|
|
|
Amortization of excess deferred income taxes
|
(4)
|
|
|
(4)
|
|
|
(4)
|
|
Depreciation differences
|
—
|
|
|
(1)
|
|
|
—
|
|
Amortization of deferred investment tax credit
|
(1)
|
|
|
—
|
|
|
(1)
|
|
State tax
|
4
|
|
|
7
|
|
|
6
|
|
TCJA
|
1
|
|
|
1
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax credits
|
(1)
|
|
|
—
|
|
|
—
|
|
Other permanent items
|
—
|
|
|
—
|
|
|
(1)
|
|
Effective income tax rate
|
20
|
%
|
|
24
|
%
|
|
22
|
%
|
The following table presents the components of income tax expense for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois
|
|
Other
|
|
Ameren
|
2020
|
|
|
|
|
|
|
|
Current taxes:
|
|
|
|
|
|
|
|
Federal
|
$
|
14
|
|
|
$
|
12
|
|
|
$
|
(24)
|
|
|
$
|
2
|
|
State
|
3
|
|
|
(6)
|
|
|
8
|
|
|
5
|
|
Deferred taxes:
|
|
|
|
|
|
|
|
Federal
|
82
|
|
|
81
|
|
|
24
|
|
|
187
|
|
State
|
15
|
|
|
52
|
|
|
(10)
|
|
|
57
|
|
Amortization of excess deferred income taxes
|
(75)
|
|
|
(15)
|
|
|
(1)
|
|
|
(91)
|
|
Amortization of deferred investment tax credits
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
Total income tax expense
|
$
|
34
|
|
|
$
|
124
|
|
|
$
|
(3)
|
|
|
$
|
155
|
|
2019
|
|
|
|
|
|
|
|
Current taxes:
|
|
|
|
|
|
|
|
Federal
|
$
|
65
|
|
|
$
|
19
|
|
|
$
|
(88)
|
|
|
$
|
(4)
|
|
State
|
22
|
|
|
11
|
|
|
(14)
|
|
|
19
|
|
Deferred taxes:
|
|
|
|
|
|
|
|
Federal
|
37
|
|
|
66
|
|
|
82
|
|
|
185
|
|
State
|
5
|
|
|
29
|
|
|
25
|
|
|
59
|
|
Amortization of excess deferred income taxes
|
(56)
|
|
|
(15)
|
|
|
(1)
|
|
|
(72)
|
|
Amortization of deferred investment tax credits
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
Total income tax expense
|
$
|
68
|
|
|
$
|
110
|
|
|
$
|
4
|
|
|
$
|
182
|
|
2018
|
|
|
|
|
|
|
|
Current taxes:
|
|
|
|
|
|
|
|
Federal
|
$
|
104
|
|
|
$
|
4
|
|
|
$
|
(118)
|
|
|
$
|
(10)
|
|
State
|
29
|
|
|
6
|
|
|
(12)
|
|
|
23
|
|
Deferred taxes:
|
|
|
|
|
|
|
|
Federal
|
22
|
|
|
75
|
|
|
123
|
|
|
220
|
|
State
|
(2)
|
|
|
28
|
|
|
23
|
|
|
49
|
|
Amortization of excess deferred income taxes
|
(24)
|
|
|
(15)
|
|
|
(1)
|
|
|
(40)
|
|
Amortization of deferred investment tax credits
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
Total income tax expense
|
$
|
124
|
|
|
$
|
98
|
|
|
$
|
15
|
|
|
$
|
237
|
|
The following table presents the accumulated deferred income tax assets and liabilities recorded as a result of temporary differences and accumulated deferred investment tax credits at December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois
|
|
Other
|
|
Ameren
|
2020
|
|
|
|
|
|
|
|
Accumulated deferred income taxes, net liability (asset):
|
|
|
|
|
|
|
|
Plant-related
|
$
|
2,112
|
|
|
$
|
1,559
|
|
|
$
|
205
|
|
|
$
|
3,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets and liabilities, net
|
(285)
|
|
|
(207)
|
|
|
(23)
|
|
|
(515)
|
|
Deferred employee benefit costs
|
(58)
|
|
|
8
|
|
|
(54)
|
|
|
(104)
|
|
|
|
|
|
|
|
|
|
Tax carryforwards
|
(26)
|
|
|
(6)
|
|
|
(65)
|
|
|
(97)
|
|
Other
|
(35)
|
|
|
13
|
|
|
39
|
|
|
17
|
|
Total net accumulated deferred income tax liabilities (assets)
|
1,708
|
|
|
1,367
|
|
|
102
|
|
|
3,177
|
|
Accumulated deferred investment tax credits
|
34
|
|
|
—
|
|
|
—
|
|
|
34
|
|
Accumulated deferred income taxes and investment tax credits
|
$
|
1,742
|
|
|
$
|
1,367
|
|
|
$
|
102
|
|
|
$
|
3,211
|
|
2019
|
|
|
|
|
|
|
|
Accumulated deferred income taxes, net liability (asset):
|
|
|
|
|
|
|
|
Plant-related
|
$
|
2,000
|
|
|
$
|
1,423
|
|
|
$
|
193
|
|
|
$
|
3,616
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Regulatory assets and liabilities, net
|
(310)
|
|
|
(214)
|
|
|
(24)
|
|
|
(548)
|
|
Deferred employee benefit costs
|
(59)
|
|
|
7
|
|
|
(59)
|
|
|
(111)
|
|
|
|
|
|
|
|
|
|
Tax carryforwards
|
(25)
|
|
|
(3)
|
|
|
(70)
|
|
|
(98)
|
|
Other
|
(33)
|
|
|
11
|
|
|
43
|
|
|
21
|
|
Total net accumulated deferred income tax liabilities (assets)
|
1,573
|
|
|
1,224
|
|
|
83
|
|
|
2,880
|
|
Accumulated deferred investment tax credits
|
39
|
|
|
—
|
|
|
—
|
|
|
39
|
|
Accumulated deferred income taxes and investment tax credits
|
$
|
1,612
|
|
|
$
|
1,224
|
|
|
$
|
83
|
|
|
$
|
2,919
|
|
The following table presents the components of accumulated deferred income tax assets relating to net operating loss carryforwards, tax credit carryforwards, and charitable contribution carryforwards at December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois
|
|
Other
|
|
Ameren
|
2020
|
|
|
|
|
|
|
|
Net operating loss carryforwards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State(a)
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
7
|
|
Total net operating loss carryforwards
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
4
|
|
|
$
|
7
|
|
Tax credit carryforwards:
|
|
|
|
|
|
|
|
Federal(b)
|
$
|
26
|
|
|
$
|
3
|
|
|
$
|
54
|
|
|
$
|
83
|
|
State(c)
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
|
|
|
|
|
|
|
Total tax credit carryforwards
|
$
|
26
|
|
|
$
|
3
|
|
|
$
|
61
|
|
|
$
|
90
|
|
Charitable contribution carryforwards(c)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Valuation allowance(d)
|
—
|
|
|
—
|
|
|
(3)
|
|
|
(3)
|
|
Total charitable contribution carryforwards
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax credit carryforwards:
|
|
|
|
|
|
|
|
Federal
|
$
|
25
|
|
|
$
|
3
|
|
|
$
|
67
|
|
|
$
|
95
|
|
State
|
—
|
|
|
—
|
|
|
3
|
|
|
3
|
|
|
|
|
|
|
|
|
|
Total tax credit carryforwards
|
$
|
25
|
|
|
$
|
3
|
|
|
$
|
70
|
|
|
$
|
98
|
|
Charitable contribution carryforwards
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
3
|
|
Valuation allowance
|
—
|
|
|
—
|
|
|
(3)
|
|
|
(3)
|
|
Total charitable contribution carryforwards
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(a)Will expire 2032.
(b)Will expire between 2030 and 2040.
(c)Will expire between 2021 and 2025.
(d)See Schedule II under Part IV, Item 15, in this report for information on changes in the valuation allowance.
Uncertain Tax Positions
As of December 31, 2020 and 2019, the Ameren Companies did not record any uncertain tax positions.
Ameren is a part of the IRS’s compliance assurance process program, which involves real-time review of compliance with federal income tax law. State income tax returns are generally subject to examination for a period of three years after filing. The state impact of any federal changes remains subject to examination by various states for up to one year after formal notification to the states. Ameren’s federal tax returns for the 2015, 2017, 2018, and 2019 tax years are open, but, at the time of this filing, the Ameren Companies do not have material income tax issues under examination, administrative appeals, or litigation.
Ameren Missouri has an uncertain tax position tracker. Under Missouri’s regulatory framework, uncertain tax positions do not reduce Ameren Missouri’s electric rate base. When an uncertain income tax position liability is resolved, the MoPSC requires, through the uncertain tax position tracker, the creation of a regulatory asset or regulatory liability to reflect the time value, with a return at the applicable WACC included in each of the electric rate orders in effect before the tax position was resolved, of the difference between the uncertain tax position liability that was excluded from rate base and the final tax liability. The resulting regulatory asset or liability will affect earnings in the year it is created. It will then be amortized over three years, beginning on the effective date of new rates established in the next electric service regulatory rate review.
NOTE 13 – RELATED-PARTY TRANSACTIONS
In the normal course of business, Ameren Missouri and Ameren Illinois engage in affiliate transactions. These transactions primarily consist of natural gas and power purchases and sales, services received or rendered, and borrowings and lendings. Transactions between Ameren’s subsidiaries are reported as affiliate transactions on their individual financial statements, but those transactions are eliminated in consolidation for Ameren’s consolidated financial statements, except as noted in Software Licensing Agreement discussion below. Below are the material related-party agreements.
Electric Power Supply Agreements
Ameren Illinois must acquire capacity and energy sufficient to meet its obligations to customers. Ameren Illinois uses periodic RFP processes, administered by the IPA and approved by the ICC, to contract capacity and energy on behalf of its customers. Ameren Missouri participates in the RFP process and has been a winning supplier for certain periods.
Capacity Supply Agreements
In procurement events in 2020, Ameren Missouri contracted to supply a portion of Ameren Illinois’ capacity requirements for $3 million from June 2021 through May 2023.
Energy Product Agreements
Based on the outcome of IPA-administered procurement events, Ameren Missouri and Ameren Illinois have entered into energy product agreements by which Ameren Missouri agreed to sell, and Ameren Illinois agreed to purchase, a set amount of MWhs at a predetermined price over a specified period of time. The following table presents the specified performance period, price, and amount of MWhs included in the agreements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IPA Procurement Event
|
Performance Period
|
MWh
|
|
Average Price per MWh
|
April 2017
|
March 2019 – May 2020
|
85,600
|
|
$
|
34
|
|
April 2018
|
June 2019 – September 2020
|
110,000
|
|
32
|
|
April 2019
|
January 2020 – December 2021
|
288,000
|
|
35
|
|
September 2019
|
April 2020 – November 2021
|
170,800
|
|
29
|
|
September 2020
|
September 2021 – November 2022
|
204,800
|
|
31
|
|
Collateral Postings
Under the terms of the Illinois energy product agreements entered into through RFP processes administered by the IPA, suppliers must post collateral under certain market conditions to protect Ameren Illinois in the event of nonperformance. The collateral postings are unilateral, which means that only the suppliers can be required to post collateral. Therefore, Ameren Missouri, as a winning supplier in the RFP process, may be required to post collateral. As of December 31, 2020 and 2019, there were no collateral postings required of Ameren Missouri related to the Illinois energy product agreements.
Interconnection Agreements
Ameren Missouri and Ameren Illinois are parties to an interconnection agreement that governs the connection of their respective transmission lines and other facilities used for the distribution of power. These agreements have no contractual expiration date, but may be terminated by either party with three years’ notice.
Ameren Missouri and ATXI are parties to an interconnection agreement that governs the connection of the High Prairie Renewable Energy Center to an ATXI transmission line that allows Ameren Missouri to distribute power generated from the High Prairie Renewable Energy Center. See Note 2 – Rate and Regulatory Matters for further information on the acquisition of the High Prairie Renewable Energy Center.
Support Services Agreements
Ameren Services provides support services to its affiliates. The costs of support services including wages, employee benefits, professional services, and other expenses, are based on, or are an allocation of, actual costs incurred. The support services agreement can be terminated at any time by the mutual agreement of Ameren Services and that affiliate or by either party with 60 days’ notice before the end of a calendar year.
In addition, Ameren Missouri and Ameren Illinois provide affiliates with access to their facilities for administrative purposes and with use of other assets. The costs of the rent and facility services and other assets are based on, or are an allocation of, actual costs incurred.
Ameren Missouri and Ameren Illinois also provide storm-related and miscellaneous support services to each other on an as-needed basis.
Transmission Services
Ameren Illinois receives transmission services from ATXI for its retail load.
Electric Transmission Maintenance and Construction Agreements
ATXI entered into separate agreements with Ameren Missouri and Ameren Illinois in which Ameren Missouri or Ameren Illinois, as applicable, may perform certain maintenance and construction services related to ATXI’s electric transmission assets.
Money Pool
See Note 4 – Short-term Debt and Liquidity for a discussion of affiliate borrowing arrangements.
Software Licensing Agreement
In September 2019, Ameren Missouri purchased a license for advanced metering infrastructure software from Ameren Illinois. The amount of the $24 million cost-based transaction price over the $5 million remaining carrying value of the software was recorded as revenue by Ameren Illinois, with $14 million of revenue recorded at Ameren Illinois Electric Distribution and $5 million recorded at Ameren Illinois Natural Gas. The revenue recorded at Ameren Illinois Electric Distribution was reflected in formula ratemaking, which resulted in no impact to net income. Per authoritative accounting guidance for sales to rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation by Ameren. Ameren Missouri’s $24 million software investment is included in “Property, Plant, and Equipment, Net.”
Tax Allocation Agreement
See Note 1 – Summary of Significant Accounting Policies for a discussion of the tax allocation agreement. The following table presents the affiliate balances related to income taxes for Ameren Missouri and Ameren Illinois as of December 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
|
2019
|
|
Ameren Missouri
|
Ameren Illinois
|
|
|
Ameren Missouri
|
Ameren Illinois
|
Income taxes payable to parent(a)
|
$
|
—
|
|
$
|
6
|
|
|
|
$
|
15
|
|
$
|
43
|
|
Income taxes receivable from parent(b)
|
9
|
|
15
|
|
|
|
15
|
|
17
|
|
(a)Included in “Accounts payable – affiliates” on the balance sheet.
(b)Included in “Accounts receivable – affiliates” on the balance sheet.
Capital Contributions
The following table presents cash capital contributions received from Ameren (parent) by Ameren Missouri and Ameren Illinois for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Ameren Missouri(a)
|
$
|
491
|
|
|
$
|
124
|
|
|
$
|
45
|
|
|
Ameren Illinois
|
464
|
|
(a)
|
15
|
|
(a)
|
160
|
|
|
(a)Includes capital contributions made as a result of the tax allocation agreement.
Effects of Related-party Transactions on the Statement of Income
The following table presents the impact on Ameren Missouri and Ameren Illinois of related-party transactions for the years ended December 31, 2020, 2019, and 2018. It is based primarily on the agreements discussed above and the money pool arrangements discussed in Note 4 – Short-term Debt and Liquidity.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agreement
|
Income Statement Line Item
|
|
|
|
Ameren
Missouri
|
|
Ameren
Illinois
|
Ameren Missouri power supply agreements
|
Operating Revenues
|
|
2020
|
$
|
11
|
|
$
|
(a)
|
with Ameren Illinois
|
|
|
2019
|
|
3
|
|
|
(a)
|
|
|
|
2018
|
|
11
|
|
|
(a)
|
Ameren Missouri and Ameren Illinois
|
Operating Revenues
|
|
2020
|
|
26
|
|
|
1
|
|
rent and facility services
|
|
|
2019
|
|
27
|
|
|
2
|
|
|
|
|
2018
|
|
22
|
|
|
3
|
|
Ameren Missouri and Ameren Illinois miscellaneous
|
Operating Revenues
|
|
2020
|
|
3
|
|
|
1
|
|
support services and services provided to ATXI
|
|
|
2019
|
|
1
|
|
|
2
|
|
|
|
|
2018
|
|
1
|
|
|
1
|
|
Ameren Missouri software licensing
|
Operating Revenues
|
|
2020
|
|
(a)
|
|
(a)
|
with Ameren Illinois
|
|
|
2019
|
|
(a)
|
|
19
|
|
|
|
|
2018
|
|
(a)
|
|
(a)
|
Total Operating Revenues
|
|
|
2020
|
$
|
40
|
|
$
|
2
|
|
|
|
|
2019
|
|
31
|
|
|
23
|
|
|
|
|
2018
|
|
34
|
|
|
4
|
|
Ameren Illinois power supply
|
Purchased Power
|
|
2020
|
$
|
(a)
|
$
|
11
|
|
agreements with Ameren Missouri
|
|
|
2019
|
|
(a)
|
|
3
|
|
|
|
|
2018
|
|
(a)
|
|
11
|
|
Ameren Missouri and Ameren Illinois
|
Purchased Power
|
|
2020
|
|
(a)
|
|
2
|
|
transmission services from ATXI
|
|
|
2019
|
|
(a)
|
|
2
|
|
|
|
|
2018
|
|
(a)
|
|
1
|
|
Total Purchased Power
|
|
|
2020
|
$
|
(a)
|
$
|
13
|
|
|
|
|
2019
|
|
(a)
|
|
5
|
|
|
|
|
2018
|
|
(a)
|
|
12
|
|
Ameren Missouri and Ameren Illinois
|
Other Operations and
|
|
2020
|
$
|
(b)
|
$
|
4
|
|
rent and facility services
|
Maintenance
|
|
2019
|
|
2
|
|
|
5
|
|
|
|
|
2018
|
|
3
|
|
|
6
|
|
Ameren Services support services
|
Other Operations and
|
|
2020
|
|
140
|
|
|
133
|
|
agreement
|
Maintenance
|
|
2019
|
|
135
|
|
|
127
|
|
|
|
|
2018
|
|
136
|
|
|
126
|
|
Total Other Operations and
|
|
|
2020
|
$
|
140
|
|
$
|
137
|
|
Maintenance Expenses
|
|
|
2019
|
|
137
|
|
|
132
|
|
|
|
|
2018
|
|
139
|
|
|
132
|
|
Money pool borrowings (advances)
|
(Interest Charges)
|
|
2020
|
$
|
(b)
|
$
|
(b)
|
|
Other Income, Net
|
|
2019
|
|
(b)
|
|
(b)
|
|
|
|
2018
|
|
1
|
|
|
(b)
|
(a)Not applicable.
(b)Amount less than $1 million.
NOTE 14 – COMMITMENTS AND CONTINGENCIES
We are involved in legal, tax, and regulatory proceedings before various courts, regulatory commissions, authorities, and governmental agencies with respect to matters that arise in the ordinary course of business, some of which involve substantial amounts of money. We believe that the final disposition of these proceedings, except as otherwise disclosed in the notes to our financial statements, will not have a material adverse effect on our results of operations, financial position, or liquidity.
See also Note 1 – Summary of Significant Accounting Policies, Note 2 – Rate and Regulatory Matters, Note 9 – Callaway Energy Center, Note 13 – Related-party Transactions, and Note 15 – Supplemental Information in this report.
Other Obligations
To supply a portion of the fuel requirements of Ameren Missouri’s energy centers, Ameren Missouri has entered into various long-term commitments for the procurement of coal, natural gas, nuclear fuel, and methane gas. Ameren Missouri and Ameren Illinois also have entered into various long-term commitments for purchased power and natural gas for distribution. The table below presents our estimated minimum fuel, purchased power, and other commitments at December 31, 2020. Ameren’s and Ameren Illinois’ purchased power commitments include the Ameren Illinois agreements entered into as part of the IPA-administered power procurement process. Included in the Other column are minimum purchase commitments under contracts for equipment, design and construction, meter reading services, and service maintenance agreements related to Ameren Missouri’s High Prairie Renewable Energy Center, among other agreements, at December 31, 2020.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal
|
|
Natural
Gas(a)
|
|
Nuclear
Fuel
|
|
Purchased
Power(b)(c)(d)
|
|
Methane
Gas
|
|
Other(e)
|
|
Total
|
Ameren:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
$
|
321
|
|
|
$
|
161
|
|
|
$
|
56
|
|
|
$
|
150
|
|
(f)
|
$
|
3
|
|
|
$
|
97
|
|
|
$
|
788
|
|
2022
|
194
|
|
|
111
|
|
|
12
|
|
|
64
|
|
|
3
|
|
|
29
|
|
|
413
|
|
2023
|
113
|
|
|
72
|
|
|
45
|
|
|
24
|
|
|
3
|
|
|
27
|
|
|
284
|
|
2024
|
94
|
|
|
31
|
|
|
26
|
|
|
7
|
|
|
3
|
|
|
25
|
|
|
186
|
|
2025
|
55
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
28
|
|
|
103
|
|
Thereafter
|
—
|
|
|
64
|
|
|
21
|
|
|
—
|
|
|
18
|
|
|
92
|
|
|
195
|
|
Total
|
$
|
777
|
|
|
$
|
456
|
|
|
$
|
160
|
|
|
$
|
245
|
|
|
$
|
33
|
|
|
$
|
298
|
|
|
$
|
1,969
|
|
Ameren Missouri:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
$
|
321
|
|
|
$
|
44
|
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
79
|
|
|
$
|
503
|
|
2022
|
194
|
|
|
40
|
|
|
12
|
|
|
—
|
|
|
3
|
|
|
30
|
|
|
279
|
|
2023
|
113
|
|
|
35
|
|
|
45
|
|
|
—
|
|
|
3
|
|
|
28
|
|
|
224
|
|
2024
|
94
|
|
|
15
|
|
|
26
|
|
|
—
|
|
|
3
|
|
|
26
|
|
|
164
|
|
2025
|
55
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
29
|
|
|
94
|
|
Thereafter
|
—
|
|
|
17
|
|
|
21
|
|
|
—
|
|
|
18
|
|
|
70
|
|
|
126
|
|
Total
|
$
|
777
|
|
|
$
|
158
|
|
|
$
|
160
|
|
|
$
|
—
|
|
|
$
|
33
|
|
|
$
|
262
|
|
|
$
|
1,390
|
|
Ameren Illinois:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2021
|
$
|
—
|
|
|
$
|
117
|
|
|
$
|
—
|
|
|
$
|
160
|
|
(f)
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
290
|
|
2022
|
—
|
|
|
71
|
|
|
—
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
138
|
|
2023
|
—
|
|
|
37
|
|
|
—
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
62
|
|
2024
|
—
|
|
|
16
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
23
|
|
2025
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
Thereafter
|
—
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
Total
|
$
|
—
|
|
|
$
|
298
|
|
|
$
|
—
|
|
|
$
|
259
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
570
|
|
(a)Includes amounts for generation and for distribution.
(b)The purchased power amounts for Ameren and Ameren Illinois exclude agreements for renewable energy credits through 2035 with various renewable energy suppliers due to the contingent nature of the payment amounts, with the exception of expected payments of $48 million through 2025.
(c)The purchased power amounts for Ameren and Ameren Missouri exclude a 102-MW power purchase agreement with a wind farm operator, which expires in 2024, due to the contingent nature of the payment amounts.
(d)The purchased power amounts for Ameren exclude obligations resulting from capacity supply and energy product agreements between Ameren Missouri and Ameren Illinois, as disclosed in Note 13 – Related-party Transactions.
(e)The other amounts for Ameren exclude obligations resulting from interconnection agreements between Ameren Missouri and ATXI, as disclosed in Note 13 – Related-party Transactions.
(f)In January 2018, as required by the FEJA, Ameren Illinois entered into agreements to acquire zero emission credits, through 2026. Annual zero emission credit commitment amounts will be published by the IPA each May prior to the start of the subsequent planning year, which begins each June. The amounts above reflect Ameren Illinois’ commitment to acquire approximately $26 million of zero emission credits through May 2021.
Environmental Matters
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. We employ dedicated personnel knowledgeable in environmental matters to ensure our business activities comply with regulatory requirements.
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. 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. Ameren and Ameren Missouri expect that such compliance costs would be recoverable through rates, subject to MoPSC prudence review, but the timing of costs and their recovery could be subject to regulatory lag.
Ameren and Ameren Missouri estimate that they will need to make capital expenditures of $175 million to $225 million from 2021 through 2025 in order to comply with existing environmental regulations. Additional environmental controls beyond 2025 could be required. This estimate of capital expenditures includes ash pond closure and corrective action measures required by the CCR regulations, potential modifications to cooling water intake structures at existing power plants under Clean Water Act rules, and by effluent limitation guidelines applicable to steam electric generating units, all of which are discussed below. This estimate does not include capital expenditures that may be required as a result of the NSR and Clean Air Act litigation discussed below. Ameren Missouri’s current plan for compliance with existing air emission regulations includes burning low-sulfur coal and installing new or optimizing existing air pollution control equipment. The actual amount of capital expenditures required to comply with existing environmental regulations may vary substantially from the above estimates because of uncertainty as to future permitting requirements made by state regulators and the EPA, potential revisions to regulatory obligations, and the cost of potential compliance strategies, among other things.
The following sections describe the more significant environmental laws and rules and environmental enforcement and remediation matters that affect or could affect our operations. The EPA has initiated an administrative review of several regulations and proposed amendments to regulations and guidelines, including to the effluent limitation guidelines and the CCR Rule, which could ultimately result in the revision of all or part of such rules.
Clean Air Act
Federal and state laws, including CSAPR, regulate emissions of SO2 and NOx through the reduction of emissions at their source and the use and retirement of emission allowances. CSAPR is implemented through a series of phases, and the second phase became effective in 2017. Additional emission reduction requirements may apply in subsequent years. To achieve compliance with the CSAPR, Ameren Missouri burns low-sulfur coal, operates two scrubbers at its Sioux Energy Center, and optimizes other existing air pollution control equipment. Ameren Missouri expects to incur additional costs to lower its emissions at one or more of its energy centers to comply with the CSAPR in future years. These higher costs are expected to be recovered from customers through the FAC or higher base rates.
CO2 Emissions Standards
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.
NSR and Clean Air Act Litigation
In January 2011, the Department of Justice, on behalf of the EPA, filed a complaint against Ameren Missouri in the United States District Court for the Eastern District of Missouri alleging that in performing projects at its coal-fired Rush Island Energy Center in 2007 and 2010, Ameren Missouri violated provisions of the Clean Air Act and Missouri law. In January 2017, the district court issued a liability ruling and, in September 2019, entered a final order that required Ameren Missouri to install a flue gas desulfurization system at the Rush Island Energy Center and a dry sorbent injection system at the Labadie Energy Center. There were no fines in the order. In October 2019, Ameren Missouri 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. Ameren Missouri believes that the district court both misinterpreted and misapplied the law in its ruling. In December 2020, the court of appeals heard oral arguments presented by the parties. Ameren Missouri is unable to predict the ultimate resolution of this matter. The court is under no deadline to issue a ruling in this case; however, Ameren Missouri expects a ruling during 2021.
The ultimate resolution of this matter could have a material adverse effect on the results of operations, financial position, and liquidity of Ameren and Ameren Missouri. Among other things and subject to economic and regulatory considerations, resolution of this matter could result in increased capital expenditures for the installation of air pollution control equipment, as well as increased operations and maintenance expenses. Based upon engineering studies from October 2019, capital expenditures to comply with the district court’s order for installation of a flue gas desulfurization system at the Rush Island Energy Center are estimated at approximately $1 billion. Further, the flue gas desulfurization system would result in additional operation and maintenance expenses of $30 million to $50 million annually for the life of the energy center. Engineering studies required to develop estimated capital expenditures and estimated additional operation and maintenance expenses for the Labadie Energy Center to comply with the district court’s order will not be undertaken while the case is under appeal. As a result of the district court’s stay, Ameren Missouri does not expect to make significant capital expenditures or incur operations and maintenance expenses related to the district court’s order while the case is under appeal.
Clean Water Act
The EPA’s Section 316(b) Rule requires power plant operators to evaluate cooling water intake structures and identify measures for reducing the number of aquatic organisms impinged on a power plant’s cooling water intake screens or entrained through the plant’s cooling water system. All of Ameren Missouri’s coal-fired and nuclear energy centers are subject to the cooling water intake structures rule. Requirements of the rule are being implemented through the permit renewal process of each energy center’s water discharge permit, which is expected to be completed by 2023.
In 2015, the EPA issued a rule to revise the effluent limitation guidelines applicable to steam electric generating units. These guidelines established national standards for water discharges, prohibits effluent discharges of certain waste streams, and imposes more stringent limitations on certain water discharges from power plants. To meet the requirements of the guidelines, Ameren Missouri installed dry ash handling systems and completed construction of wastewater treatment facilities at three of its four coal-fired energy centers in 2020. The Meramec Energy Center, which is the fourth coal-fired energy center and is scheduled to close permanently in 2022, will not have new wastewater and dry ash handling systems. Estimated capital expenditures to complete these projects are included in the CCR management compliance plan, discussed below.
CCR Management
The EPA’s CCR rule establishes requirements for the management and disposal of CCR from coal-fired power plants and will result in the closure of surface impoundments at Ameren Missouri’s energy centers. Ameren Missouri is in the process of closing surface impoundments at three facilities, and is scheduled to complete the last of such closures at all of its energy centers in 2023. While the EPA has issued a series of revisions to the CCR rule, none of those revisions or proposals is expected to materially impact our closure schedule. Ameren and Ameren Missouri have AROs of $111 million recorded on their respective balance sheets as of December 31, 2020, associated with CCR storage facilities. Ameren Missouri estimates it will need to make total capital expenditures of $75 million to $100 million from 2021 through 2025 to implement its CCR management compliance plan, which includes installation of dry ash handling systems, wastewater treatment facilities, and groundwater monitoring equipment.
Remediation
The Ameren Companies are involved in a number of remediation actions to clean up sites impacted by the use or disposal of materials containing hazardous substances. Federal and state laws can require responsible parties to fund remediation regardless of their degree of fault, the legality of original disposal, or the ownership of a disposal site.
As of December 31, 2020, Ameren Illinois has remediated the majority of the 44 former MGP sites in Illinois it owned or for which it was otherwise responsible. Ameren Illinois estimates it could substantially conclude remediation efforts at the remaining sites by 2023. The ICC allows Ameren Illinois to recover such remediation and related litigation costs from its electric and natural gas utility customers through environmental cost riders. Costs are subject to annual prudence review by the ICC. As of December 31, 2020, Ameren Illinois estimated the remaining obligation related to these former MGP sites at $94 million to $157 million. Ameren and Ameren Illinois recorded a liability of $94 million to represent the estimated minimum obligation for these sites, as no other amount within the range was a better estimate.
The scope of the remediation activities at these former MGP sites may increase as remediation efforts continue. Considerable uncertainty remains in these estimates because many site-specific factors can influence the ultimate actual costs, including unanticipated underground structures, the degree to which groundwater is encountered, regulatory changes, local ordinances, and site accessibility. The actual costs and timing of completion may vary substantially from these estimates.
Our operations or those of our predecessor companies involve the use of, disposal of, and, in appropriate circumstances, the cleanup of substances regulated under environmental laws. We are unable to determine whether such practices will result in future environmental commitments or will affect our results of operations, financial position, or liquidity.
NOTE 15 – SUPPLEMENTAL INFORMATION
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the balance sheets and the statements of cash flows as of December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
Ameren
|
Ameren
Missouri
|
Ameren
Illinois
|
|
|
Ameren
|
Ameren
Missouri
|
Ameren
Illinois
|
Cash and cash equivalents
|
$
|
139
|
|
$
|
136
|
|
$
|
—
|
|
|
|
$
|
16
|
|
$
|
9
|
|
$
|
—
|
|
Restricted cash included in “Other current assets”
|
17
|
|
5
|
|
6
|
|
|
|
14
|
|
4
|
|
5
|
|
Restricted cash included in “Other assets”
|
141
|
|
—
|
|
141
|
|
|
|
120
|
|
—
|
|
120
|
|
Restricted cash included in “Nuclear decommissioning trust fund”
|
4
|
|
4
|
|
—
|
|
|
|
26
|
|
26
|
|
—
|
|
Total cash, cash equivalents, and restricted cash
|
$
|
301
|
|
$
|
145
|
|
$
|
147
|
|
|
|
$
|
176
|
|
$
|
39
|
|
$
|
125
|
|
Restricted cash included in “Other current assets” primarily represents funds held by an irrevocable Voluntary Employee Beneficiary Association (VEBA) trust, which provides health care benefits for active employees. Restricted cash included in “Other assets” on Ameren’s and Ameren Illinois’ balance sheets primarily represents amounts collected under a cost recovery rider that are restricted for use in the procurement of renewable energy credits and amounts in a trust fund restricted for the use of funding certain asbestos-related claims.
Accounts Receivable
“Accounts receivable – trade” on Ameren’s and Ameren Illinois’ balance sheets include certain receivables purchased at a discount from alternative retail electric suppliers that elect to participate in the utility consolidated billing program. At December 31, 2020 and 2019, “Other current liabilities” on Ameren’s and Ameren Illinois’ balance sheets included payables for purchased receivables of $28 million and $32 million, respectively.
The following table provides a reconciliation of the beginning and ending amount of the allowance for doubtful accounts for the years ended December 31, 2020 and 2019:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Ameren Missouri
|
Ameren Illinois(a)
|
Ameren
|
|
|
Ameren Missouri
|
Ameren Illinois(a)
|
Ameren
|
Beginning of period
|
$
|
7
|
|
$
|
10
|
|
$
|
17
|
|
|
|
$
|
7
|
|
$
|
11
|
|
$
|
18
|
|
Bad debt expense
|
15
|
|
33
|
|
48
|
|
|
|
9
|
|
21
|
|
30
|
|
|
|
|
|
|
|
|
|
|
Net write-offs
|
(6)
|
|
(9)
|
|
(15)
|
|
|
|
(9)
|
|
(22)
|
|
(31)
|
|
End of period
|
$
|
16
|
|
$
|
34
|
|
$
|
50
|
|
|
|
$
|
7
|
|
$
|
10
|
|
$
|
17
|
|
(a)Ameren Illinois has riders that allow it to recover the difference between its actual net bad debt write-offs under GAAP, including those associated with receivables purchased from alternative retail electric suppliers, and the amount of net bad debt write-offs included in its base rates. In 2020, the rider for electric distribution allows for recovery of bad debt expense recognized under GAAP. See Note 2 – Rate and Regulatory Matters for additional information.
Net write-offs decreased for the year ended December 31, 2020 due to the temporary suspension of disconnecting customers for nonpayment. See Note 2 – Rate and Regulatory Matters for additional information.
Inventories
The following table presents the components of inventories for each of the Ameren Companies at December 31, 2020 and 2019:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Ameren
Missouri
|
Ameren
Illinois
|
Ameren
|
|
|
Ameren
Missouri
|
Ameren
Illinois
|
Ameren
|
Fuel(a)
|
$
|
115
|
|
$
|
—
|
|
$
|
115
|
|
|
|
$
|
126
|
|
$
|
—
|
|
$
|
126
|
|
Natural gas stored underground
|
5
|
|
52
|
|
57
|
|
|
|
6
|
|
57
|
|
63
|
|
Materials, supplies, and other
|
266
|
|
83
|
|
349
|
|
|
|
241
|
|
64
|
|
305
|
|
Total inventories
|
$
|
386
|
|
$
|
135
|
|
$
|
521
|
|
|
|
$
|
373
|
|
$
|
121
|
|
$
|
494
|
|
(a)Consists of coal, oil, and propane.
Asset Retirement Obligations
The following table provides a reconciliation of the beginning and ending carrying amount of AROs for the years ended December 31, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
|
December 31, 2019
|
|
Ameren
Missouri
|
|
Ameren
Illinois
|
|
|
|
Ameren
|
|
|
|
Ameren
Missouri
|
|
Ameren
Illinois
|
|
Ameren
|
|
Beginning balance at January 1
|
$
|
687
|
|
|
$
|
4
|
|
|
|
(a)
|
$
|
691
|
|
(b)
|
|
|
$
|
646
|
|
|
$
|
4
|
|
|
$
|
650
|
|
|
Liabilities incurred
|
36
|
|
(c)
|
—
|
|
|
|
|
36
|
|
(c)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Liabilities settled
|
(58)
|
|
|
—
|
|
|
|
|
(58)
|
|
|
|
|
(20)
|
|
|
—
|
|
|
(20)
|
|
|
Accretion(d)
|
29
|
|
|
1
|
|
|
|
|
30
|
|
|
|
|
28
|
|
|
—
|
|
|
28
|
|
|
Change in estimates
|
57
|
|
(e)
|
—
|
|
|
|
|
57
|
|
(e)
|
|
|
33
|
|
(f)
|
—
|
|
|
33
|
|
(f)
|
Ending balance at December 31
|
$
|
751
|
|
(g)
|
$
|
5
|
|
|
|
(a)
|
$
|
756
|
|
(b), (g)
|
|
|
$
|
687
|
|
|
$
|
4
|
|
(a)
|
$
|
691
|
|
(b)
|
(a)Included in “Other deferred credits and liabilities” on the balance sheet.
(b)Balance included $60 million and $53 million in “Other current liabilities” on the balance sheet as of both December 31, 2020 and 2019, respectively.
(c)In December 2020, Ameren Missouri recorded an ARO related to the decommissioning for the High Prairie Renewable Energy Center.
(d)Accretion expense attributable to Ameren Missouri and Ameren Illinois was recorded as a decrease to regulatory liabilities and an increase to regulatory assets, respectively.
(e)Ameren Missouri changed its fair value estimate primarily due to an update to the decommissioning of the Callaway Energy Center to reflect the cost study and funding analysis filed with the MoPSC in November 2020 and an increase in the cost estimate for closure of certain CCR storage facilities.
(f)Ameren Missouri changed its fair value estimate primarily due to an increase in the cost estimate for closure of certain CCR storage facilities.
(g)The balance as of December 31, 2020, includes an ARO related to the decommissioning of the Callaway Enter Center of $549 million.
Noncontrolling Interests
As of December 31, 2020 and 2019, Ameren’s noncontrolling interests included the preferred stock of Ameren Missouri and Ameren Illinois.
Deferred Compensation
As of December 31, 2020, and 2019, “Other current liabilities” and “Other deferred credits and liabilities” on Ameren’s balance sheet included deferred compensation obligations of $90 million and $86 million, respectively, recorded at the present value of future benefits to be paid.
Excise Taxes
Ameren Missouri and Ameren Illinois collect from their customers excise taxes, including municipal and state excise taxes and gross receipts taxes, that are levied on the sale or distribution of natural gas and electricity. The following table presents the excise taxes recorded on a gross basis in “Operating Revenues – Electric,” “Operating Revenues – Natural gas” and “Operating Expenses – Taxes other than income taxes” on the statements of income for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Ameren Missouri
|
$
|
139
|
|
|
$
|
147
|
|
|
$
|
164
|
|
|
Ameren Illinois
|
115
|
|
|
117
|
|
|
118
|
|
|
Ameren
|
$
|
254
|
|
|
$
|
264
|
|
|
$
|
282
|
|
|
Allowance for Funds Used During Construction
The following table presents the average rate that was applied to eligible construction work in progress and the amounts of allowance for funds used during construction capitalized in 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
Average rate:
|
|
|
|
|
|
|
Ameren Missouri
|
5
|
%
|
|
6
|
%
|
|
7
|
%
|
|
Ameren Illinois
|
5
|
%
|
|
5
|
%
|
|
5
|
%
|
|
Ameren:
|
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
32
|
|
|
$
|
28
|
|
|
$
|
36
|
|
|
Allowance for borrowed funds used during construction
|
16
|
|
|
20
|
|
|
21
|
|
|
Total Ameren
|
$
|
48
|
|
|
$
|
48
|
|
|
$
|
57
|
|
|
Ameren Missouri:
|
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
19
|
|
|
$
|
19
|
|
|
$
|
27
|
|
|
Allowance for borrowed funds used during construction
|
10
|
|
|
12
|
|
|
14
|
|
|
Total Ameren Missouri
|
$
|
29
|
|
|
$
|
31
|
|
|
$
|
41
|
|
|
Ameren Illinois:
|
|
|
|
|
|
|
Allowance for equity funds used during construction
|
$
|
13
|
|
|
$
|
9
|
|
|
$
|
9
|
|
|
Allowance for borrowed funds used during construction
|
6
|
|
|
8
|
|
|
7
|
|
|
Total Ameren Illinois
|
$
|
19
|
|
|
$
|
17
|
|
|
$
|
16
|
|
|
Earnings per Share
Earnings per basic and diluted share are computed by dividing “Net Income Attributable to Ameren Common Shareholders” by the weighted-average number of basic and diluted common shares outstanding, respectively, during the applicable period. The weighted-average shares outstanding for earnings per diluted share includes the incremental effects resulting from performance share units, restricted stock units, and the forward sale agreement relating to common stock when the impact would be dilutive, as calculated using the treasury stock method. For information regarding performance share units and restricted stock units, see Note 11 – Stock-based Compensation. For information regarding the forward sale agreement, see Note 5 – Long-term Debt and Equity Financings.
The following table reconciles the weighted-average number of common shares outstanding to the diluted weighted-average number of common shares outstanding for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average Common Shares Outstanding – Basic
|
247.0
|
|
|
245.6
|
|
|
243.8
|
|
Assumed settlement of performance share units and restricted stock units
|
1.2
|
|
|
1.4
|
|
|
2.0
|
|
Dilutive effect of forward sale agreement
|
0.5
|
|
|
0.1
|
|
|
—
|
|
Weighted-average Common Shares Outstanding – Diluted(a)
|
248.7
|
|
|
247.1
|
|
|
245.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)There were no potentially dilutive securities excluded from the earnings per diluted share calculations for the years ended December 31, 2020, 2019, and 2018.
Supplemental Cash Flow Information
The following table provides noncash financing and investing activity excluded from the statements of cash flows for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2020
|
|
December 31, 2019
|
|
December 31, 2018
|
Ameren
|
Ameren
Missouri
|
|
Ameren
Illinois
|
|
Ameren
|
Ameren
Missouri
|
Ameren
Illinois
|
|
Ameren
|
Ameren
Missouri
|
Ameren
Illinois
|
Investing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued capital expenditures
|
$
|
400
|
|
$
|
183
|
|
|
$
|
218
|
|
|
$
|
333
|
|
$
|
140
|
|
$
|
163
|
|
|
$
|
272
|
|
$
|
121
|
|
$
|
138
|
|
Accrued nuclear fuel expenditures
|
—
|
|
—
|
|
|
—
|
|
|
19
|
|
19
|
|
—
|
|
|
20
|
|
20
|
|
—
|
|
Accrued wind generation expenditures
|
46
|
|
46
|
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
Net realized and unrealized gain (loss) – nuclear decommissioning trust fund
|
116
|
|
116
|
|
|
—
|
|
|
143
|
|
143
|
|
—
|
|
|
(38)
|
|
(38)
|
|
—
|
|
Exchange of bond investments for the extinguishment of senior unsecured notes(a)
|
—
|
|
—
|
|
|
—
|
|
|
17
|
|
—
|
|
17
|
|
|
—
|
|
—
|
|
—
|
|
Financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of common stock for stock-based compensation
|
$
|
38
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54
|
|
$
|
—
|
|
$
|
—
|
|
|
$
|
35
|
|
$
|
—
|
|
$
|
—
|
|
Exchange of bond investments for the extinguishment of senior unsecured notes(a)
|
—
|
|
—
|
|
|
—
|
|
|
(17)
|
|
—
|
|
(17)
|
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)See Note 5 – Long-term Debt and Equity Financings for additional information.
NOTE 16 – SEGMENT INFORMATION
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. The category called Other primarily includes Ameren (parent) activities and Ameren Services.
Ameren Missouri has one segment. Ameren Illinois has three segments: Ameren Illinois Electric Distribution, Ameren Illinois Natural Gas, and Ameren Illinois Transmission. See Note 1 – Summary of Significant Accounting Policies for additional information regarding the operations of Ameren Missouri, Ameren Illinois, and ATXI.
Segment operating revenues and a majority of operating expenses are directly recognized and incurred by Ameren Illinois to each Ameren Illinois segment. Common operating expenses, miscellaneous income and expenses, interest charges, and income tax expense are allocated by Ameren Illinois to each Ameren Illinois segment based on certain factors, which primarily relate to the nature of the cost. Additionally, Ameren Illinois Transmission earns revenue from transmission service provided to Ameren Illinois Electric Distribution, other retail electric suppliers, and wholesale customers. The transmission expense for Illinois customers who have elected to purchase their power from Ameren Illinois is recovered through a cost recovery mechanism with no net effect on Ameren Illinois Electric Distribution earnings, as costs are offset by corresponding revenues. Transmission revenues from these transactions are reflected in Ameren Transmission’s and Ameren Illinois Transmission’s operating revenues. An intersegment elimination at Ameren and Ameren Illinois occurs to eliminate these transmission revenues and expenses.
The following tables present information about the reported revenue and specified items reflected in net income attributable to common shareholders and capital expenditures by segment at Ameren and Ameren Illinois for the years ended December 31, 2020, 2019, and 2018. Ameren, Ameren Missouri, and Ameren Illinois management review segment capital expenditure information rather than any individual or total asset amount.
Ameren
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Transmission
|
|
Other
|
|
Intersegment Eliminations
|
|
Ameren
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
3,069
|
|
|
$
|
1,496
|
|
|
$
|
760
|
|
|
$
|
469
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,794
|
|
|
|
Intersegment revenues
|
40
|
|
|
2
|
|
|
—
|
|
|
54
|
|
|
—
|
|
|
(96)
|
|
|
—
|
|
|
|
Depreciation and amortization
|
604
|
|
|
288
|
|
|
81
|
|
|
98
|
|
|
4
|
|
|
—
|
|
|
1,075
|
|
|
|
Interest income
|
26
|
|
|
2
|
|
|
—
|
|
|
1
|
|
|
4
|
|
|
(4)
|
|
|
29
|
|
|
|
Interest charges
|
190
|
|
|
72
|
|
|
41
|
|
|
78
|
|
(a)
|
42
|
|
|
(4)
|
|
|
419
|
|
|
|
Income taxes (benefit)
|
34
|
|
|
42
|
|
|
36
|
|
|
78
|
|
|
(35)
|
|
|
—
|
|
|
155
|
|
|
|
Net income (loss) attributable to Ameren common shareholders
|
436
|
|
|
143
|
|
|
99
|
|
|
216
|
|
|
(23)
|
|
|
—
|
|
|
871
|
|
|
|
Capital expenditures
|
1,666
|
|
(b)
|
543
|
|
|
301
|
|
|
716
|
|
|
5
|
|
|
2
|
|
|
3,233
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
3,212
|
|
|
$
|
1,487
|
|
|
$
|
791
|
|
|
$
|
401
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,891
|
|
|
|
Intersegment revenues
|
31
|
|
|
17
|
|
|
6
|
|
|
63
|
|
|
—
|
|
|
(98)
|
|
|
19
|
|
(c)
|
|
Depreciation and amortization
|
556
|
|
|
273
|
|
|
78
|
|
|
84
|
|
|
4
|
|
|
—
|
|
|
995
|
|
|
|
Interest income
|
26
|
|
|
6
|
|
|
—
|
|
|
1
|
|
|
5
|
|
|
(5)
|
|
|
33
|
|
|
|
Interest charges
|
178
|
|
|
71
|
|
|
38
|
|
|
74
|
|
(a)
|
25
|
|
|
(5)
|
|
|
381
|
|
|
|
Income taxes (benefit)
|
68
|
|
|
45
|
|
|
30
|
|
|
64
|
|
|
(25)
|
|
|
—
|
|
|
182
|
|
|
|
Net income (loss) attributable to Ameren common shareholders
|
426
|
|
|
146
|
|
|
84
|
|
|
185
|
|
|
(13)
|
|
|
—
|
|
|
828
|
|
|
|
Capital expenditures
|
1,076
|
|
|
518
|
|
|
318
|
|
|
528
|
|
|
3
|
|
|
(32)
|
|
(d)
|
2,411
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
3,555
|
|
|
$
|
1,544
|
|
|
$
|
814
|
|
|
$
|
378
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,291
|
|
|
|
Intersegment revenues
|
34
|
|
|
3
|
|
|
1
|
|
|
55
|
|
|
—
|
|
|
(93)
|
|
|
—
|
|
|
|
Depreciation and amortization
|
550
|
|
|
259
|
|
|
65
|
|
|
77
|
|
|
4
|
|
|
—
|
|
|
955
|
|
|
|
Interest income
|
28
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
(5)
|
|
|
33
|
|
|
|
Interest charges
|
200
|
|
|
73
|
|
|
38
|
|
|
75
|
|
(a)
|
19
|
|
|
(4)
|
|
|
401
|
|
|
|
Income taxes (benefit)
|
124
|
|
|
41
|
|
|
25
|
|
|
56
|
|
|
(9)
|
|
|
—
|
|
|
237
|
|
|
|
Net income (loss) attributable to Ameren common shareholders
|
478
|
|
|
136
|
|
|
70
|
|
|
164
|
|
|
(33)
|
|
|
—
|
|
|
815
|
|
|
|
Capital expenditures
|
914
|
|
|
503
|
|
|
311
|
|
|
562
|
|
|
5
|
|
|
(9)
|
|
|
2,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)Ameren Transmission interest charges include an allocation of financing costs from Ameren (parent).
(b)Includes $564 million at Ameren and Ameren Missouri for the acquisition of the High Prairie Renewable Energy Center for the year ended December 31, 2020.
(c)Intersegment revenues at Ameren include $14 million and $5 million of revenue from Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. Under authoritative accounting guidance for rate-regulated entities, the revenue recognized by Ameren Illinois was not eliminated upon consolidation. See Note 13 – Related-party Transactions for additional information.
(d)Intersegment capital expenditure eliminations include $24 million of eliminations for the year ended December 31, 2019, for a software licensing agreement between Ameren Illinois and Ameren Missouri. See Note 13 – Related-party Transactions for additional information.
Ameren Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois
Natural Gas
|
|
Ameren Illinois Transmission
|
|
Intersegment Eliminations
|
|
Ameren Illinois
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
1,498
|
|
|
$
|
760
|
|
|
$
|
277
|
|
|
$
|
—
|
|
|
$
|
2,535
|
|
|
Intersegment revenues
|
—
|
|
|
—
|
|
|
52
|
|
|
(52)
|
|
|
—
|
|
|
Depreciation and amortization
|
288
|
|
|
81
|
|
|
65
|
|
|
—
|
|
|
434
|
|
|
Interest income
|
2
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
3
|
|
|
Interest charges
|
72
|
|
|
41
|
|
|
42
|
|
|
—
|
|
|
155
|
|
|
Income taxes
|
42
|
|
|
36
|
|
|
46
|
|
|
—
|
|
|
124
|
|
|
Net income available to common shareholder
|
143
|
|
|
99
|
|
|
137
|
|
|
—
|
|
|
379
|
|
|
Capital expenditures
|
543
|
|
|
301
|
|
|
603
|
|
|
—
|
|
|
1,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
1,504
|
|
|
$
|
797
|
|
|
$
|
226
|
|
|
$
|
—
|
|
|
$
|
2,527
|
|
|
Intersegment revenues
|
—
|
|
|
—
|
|
|
62
|
|
|
(62)
|
|
|
—
|
|
|
Depreciation and amortization
|
273
|
|
|
78
|
|
|
55
|
|
|
—
|
|
|
406
|
|
|
Interest income
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
Interest charges
|
71
|
|
|
38
|
|
|
38
|
|
|
—
|
|
|
147
|
|
|
Income taxes
|
45
|
|
|
30
|
|
|
35
|
|
|
—
|
|
|
110
|
|
|
Net income available to common shareholder
|
146
|
|
|
84
|
|
|
113
|
|
|
—
|
|
|
343
|
|
|
Capital expenditures
|
518
|
|
|
318
|
|
|
372
|
|
|
—
|
|
|
1,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
External revenues
|
$
|
1,547
|
|
|
$
|
815
|
|
|
$
|
214
|
|
|
$
|
—
|
|
|
$
|
2,576
|
|
|
Intersegment revenues
|
—
|
|
|
—
|
|
|
53
|
|
|
(53)
|
|
|
—
|
|
|
Depreciation and amortization
|
259
|
|
|
65
|
|
|
50
|
|
|
—
|
|
|
374
|
|
|
Interest income
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|
Interest charges
|
73
|
|
|
38
|
|
|
38
|
|
|
—
|
|
|
149
|
|
|
Income taxes
|
41
|
|
|
25
|
|
|
32
|
|
|
—
|
|
|
98
|
|
|
Net income available to common shareholder
|
136
|
|
|
70
|
|
|
98
|
|
|
—
|
|
|
304
|
|
|
Capital expenditures
|
503
|
|
|
311
|
|
|
444
|
|
|
—
|
|
|
1,258
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present disaggregated revenues by segment at Ameren and Ameren Illinois for the years ended December 31, 2020, 2019, and 2018. Economic factors affect the nature, timing, amount, and uncertainty of revenues and cash flows in a similar manner across customer classes. Revenues from alternative revenue programs have a similar distribution among customer classes as revenues from contracts with customers. Other revenues not associated with contracts with customers are presented in the Other customer classification, along with electric transmission and off-system revenues.
Ameren
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Transmission
|
|
|
|
Intersegment Eliminations
|
|
Ameren
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
1,373
|
|
|
$
|
867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
2,240
|
|
|
Commercial
|
1,025
|
|
|
486
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1,511
|
|
|
Industrial
|
261
|
|
|
124
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
385
|
|
|
Other
|
325
|
|
|
21
|
|
|
—
|
|
|
523
|
|
|
|
|
(94)
|
|
|
775
|
|
|
Total electric revenues
|
$
|
2,984
|
|
|
$
|
1,498
|
|
|
$
|
—
|
|
|
$
|
523
|
|
|
|
|
$
|
(94)
|
|
|
$
|
4,911
|
|
|
Residential
|
$
|
76
|
|
|
$
|
—
|
|
|
$
|
541
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
617
|
|
|
Commercial
|
29
|
|
|
—
|
|
|
136
|
|
|
—
|
|
|
|
|
—
|
|
|
165
|
|
|
Industrial
|
4
|
|
|
—
|
|
|
14
|
|
|
—
|
|
|
|
|
—
|
|
|
18
|
|
|
Other
|
16
|
|
|
—
|
|
|
69
|
|
|
—
|
|
|
|
|
(2)
|
|
|
83
|
|
|
Total gas revenues
|
$
|
125
|
|
|
$
|
—
|
|
|
$
|
760
|
|
|
$
|
—
|
|
|
|
|
$
|
(2)
|
|
|
$
|
883
|
|
|
Total revenues(a)
|
$
|
3,109
|
|
|
$
|
1,498
|
|
|
$
|
760
|
|
|
$
|
523
|
|
|
|
|
$
|
(96)
|
|
|
$
|
5,794
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
1,403
|
|
|
$
|
848
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
2,251
|
|
|
Commercial
|
1,157
|
|
|
497
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1,654
|
|
|
Industrial
|
278
|
|
|
127
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
405
|
|
|
Other
|
271
|
|
|
32
|
|
(b)
|
—
|
|
|
464
|
|
|
|
|
(96)
|
|
|
671
|
|
|
Total electric revenues
|
$
|
3,109
|
|
|
$
|
1,504
|
|
|
$
|
—
|
|
|
$
|
464
|
|
|
|
|
$
|
(96)
|
|
|
$
|
4,981
|
|
|
Residential
|
$
|
81
|
|
|
$
|
—
|
|
|
$
|
570
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
651
|
|
|
Commercial
|
34
|
|
|
—
|
|
|
154
|
|
|
—
|
|
|
|
|
—
|
|
|
188
|
|
|
Industrial
|
4
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
|
|
—
|
|
|
17
|
|
|
Other
|
15
|
|
|
—
|
|
|
60
|
|
(b)
|
—
|
|
|
|
|
(2)
|
|
|
73
|
|
|
Total gas revenues
|
$
|
134
|
|
|
$
|
—
|
|
|
$
|
797
|
|
|
$
|
—
|
|
|
|
|
$
|
(2)
|
|
|
$
|
929
|
|
|
Total revenues(a)
|
$
|
3,243
|
|
|
$
|
1,504
|
|
|
$
|
797
|
|
|
$
|
464
|
|
|
|
|
$
|
(98)
|
|
|
$
|
5,910
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
1,560
|
|
|
$
|
867
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
2,427
|
|
|
Commercial
|
1,271
|
|
|
511
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
1,782
|
|
|
Industrial
|
312
|
|
|
130
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
442
|
|
|
Other
|
308
|
|
(c)
|
39
|
|
|
—
|
|
|
433
|
|
|
|
|
(92)
|
|
|
688
|
|
(c)
|
Total electric revenues
|
$
|
3,451
|
|
|
$
|
1,547
|
|
|
$
|
—
|
|
|
$
|
433
|
|
|
|
|
$
|
(92)
|
|
|
$
|
5,339
|
|
|
Residential
|
$
|
90
|
|
|
$
|
—
|
|
|
$
|
581
|
|
|
$
|
—
|
|
|
|
|
$
|
—
|
|
|
$
|
671
|
|
|
Commercial
|
37
|
|
|
—
|
|
|
159
|
|
|
—
|
|
|
|
|
—
|
|
|
196
|
|
|
Industrial
|
4
|
|
|
—
|
|
|
17
|
|
|
—
|
|
|
|
|
—
|
|
|
21
|
|
|
Other
|
7
|
|
|
—
|
|
|
58
|
|
|
—
|
|
|
|
|
(1)
|
|
|
64
|
|
|
Total gas revenues
|
$
|
138
|
|
|
$
|
—
|
|
|
$
|
815
|
|
|
$
|
—
|
|
|
|
|
$
|
(1)
|
|
|
$
|
952
|
|
|
Total revenues(a)
|
$
|
3,589
|
|
|
$
|
1,547
|
|
|
$
|
815
|
|
|
$
|
433
|
|
|
|
|
$
|
(93)
|
|
|
$
|
6,291
|
|
|
(a)The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Missouri
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Transmission
|
|
Ameren
|
2020
|
|
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
(14)
|
|
|
$
|
(20)
|
|
|
$
|
20
|
|
|
$
|
50
|
|
|
$
|
36
|
|
Other revenues not from contracts with customers
|
25
|
|
|
8
|
|
|
2
|
|
|
1
|
|
|
36
|
|
2019
|
|
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
35
|
|
|
$
|
(74)
|
|
|
$
|
—
|
|
|
$
|
(31)
|
|
|
$
|
(70)
|
|
Other revenues not from contracts with customers
|
19
|
|
|
7
|
|
|
2
|
|
|
—
|
|
|
28
|
|
2018
|
|
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
(8)
|
|
|
$
|
(3)
|
|
|
$
|
(23)
|
|
|
$
|
(25)
|
|
|
$
|
(59)
|
|
Other revenues not from contracts with customers
|
24
|
|
|
16
|
|
|
2
|
|
|
—
|
|
|
42
|
|
(b)Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. See Note 13 – Related-party Transactions for additional information.
(c)Includes $60 million for the year ended December 31, 2018, for the reduction to revenue for the excess amounts collected in rates to be refunded related to the TCJA from January 1, 2018, through July 31, 2018. See Note 2 – Rate and Regulatory Matters for additional information.
Ameren Illinois
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Illinois Transmission
|
|
Intersegment Eliminations
|
|
Ameren Illinois
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
867
|
|
|
$
|
541
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,408
|
|
|
Commercial
|
486
|
|
|
136
|
|
|
—
|
|
|
—
|
|
|
622
|
|
|
Industrial
|
124
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
138
|
|
|
Other
|
21
|
|
|
69
|
|
|
329
|
|
|
(52)
|
|
|
367
|
|
|
Total revenues(a)
|
$
|
1,498
|
|
|
$
|
760
|
|
|
$
|
329
|
|
|
$
|
(52)
|
|
|
$
|
2,535
|
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
848
|
|
|
$
|
570
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,418
|
|
|
Commercial
|
497
|
|
|
154
|
|
|
—
|
|
|
—
|
|
|
651
|
|
|
Industrial
|
127
|
|
|
13
|
|
|
—
|
|
|
—
|
|
|
140
|
|
|
Other
|
32
|
|
(b)
|
60
|
|
(b)
|
288
|
|
|
(62)
|
|
|
318
|
|
|
Total revenues(a)
|
$
|
1,504
|
|
|
$
|
797
|
|
|
$
|
288
|
|
|
$
|
(62)
|
|
|
$
|
2,527
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Residential
|
$
|
867
|
|
|
$
|
581
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,448
|
|
|
Commercial
|
511
|
|
|
159
|
|
|
—
|
|
|
—
|
|
|
670
|
|
|
Industrial
|
130
|
|
|
17
|
|
|
—
|
|
|
—
|
|
|
147
|
|
|
Other
|
39
|
|
|
58
|
|
|
267
|
|
|
(53)
|
|
|
311
|
|
|
Total revenues(a)
|
$
|
1,547
|
|
|
$
|
815
|
|
|
$
|
267
|
|
|
$
|
(53)
|
|
|
$
|
2,576
|
|
|
(a)The following table presents increases/(decreases) in revenues from alternative revenue programs and other revenues not from contracts with customers for the Ameren Illinois segments for the years ended December 31, 2020, 2019, and 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ameren Illinois Electric Distribution
|
|
Ameren Illinois Natural Gas
|
|
Ameren Illinois Transmission
|
|
Ameren Illinois
|
2020
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
(20)
|
|
|
$
|
20
|
|
|
$
|
42
|
|
|
$
|
42
|
|
Other revenues not from contracts with customers
|
8
|
|
|
2
|
|
|
—
|
|
|
10
|
|
2019
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
(74)
|
|
|
$
|
—
|
|
|
$
|
(33)
|
|
|
$
|
(107)
|
|
Other revenues not from contracts with customers
|
7
|
|
|
2
|
|
|
—
|
|
|
9
|
|
2018
|
|
|
|
|
|
|
|
Revenues from alternative revenue programs
|
$
|
(3)
|
|
|
$
|
(23)
|
|
|
$
|
(25)
|
|
|
$
|
(51)
|
|
Other revenues not from contracts with customers
|
16
|
|
|
2
|
|
|
—
|
|
|
18
|
|
(b)Includes $14 million and $5 million for Ameren Illinois Electric Distribution and Ameren Illinois Natural Gas, respectively, for the year ended December 31, 2019, for a software licensing agreement with Ameren Missouri. See Note 13 – Related-party Transactions for additional information.