Ameren accelerates coal retirement and expands MISO transmission footprint
The holding company utilized securitized bonds to fund the closure of the Rush Island Energy Center while pursuing long-range transmission projects in Illinois and Missouri.
Ameren (AEE) shifted its generation profile and transmission strategy in 2024 across its three primary electric utilities: Union Electric Company (MO), Ameren Illinois Company (IL), and Ameren Transmission Company of Illinois (IL). The company focused on the accelerated retirement of legacy coal assets and the expansion of its FERC-regulated transmission network within the Midcontinent Independent System Operator (MISO) footprint.
Regulatory recovery for the transmission business remains anchored in a forward-looking formula ratemaking framework. Ameren Transmission Company of Illinois operated under an allowed base return on equity of 10.02%. To expand this footprint, the subsidiary filed requests for Certificates of Convenience and Necessity with the Illinois Commerce Commission and the Missouri Public Service Commission in 2024 for MISO long-range transmission projects.
Capital investment in the transmission sector was bolstered by three competitive bid projects awarded by MISO, representing an estimated investment of approximately $220 million. These additions complement the subsidiary's existing core assets, including the Mark Twain, Spoon River, and Illinois Rivers lines.
The company's generation mix underwent a significant structural change with the retirement of the Rush Island Energy Center on October 15, 2024. To finance this accelerated closure, the company issued $476 million in securitized utility tariff bonds in December 2024. This move allows the company to recover costs associated with the plant's retirement through a securitization mechanism rather than traditional rate-base additions.
Operating revenues across the subsidiaries totaled over $6.6 billion for the period. Union Electric reported electric operating revenues of $3.83 billion, while Ameren Illinois reported $2.62 billion. Ameren Transmission Company of Illinois contributed $230.3 million, the majority of which was derived from the sale of transmission services via MISO. The customer base remains substantial, with Union Electric serving 1.3 million electric and 0.1 million gas customers, and Ameren Illinois serving 1.2 million electric and 0.8 million gas customers.
Operational management in Illinois included the use of bad debt riders to adjust rates for net write-offs of customer accounts receivable. This mechanism provides a hedge against credit risk within the residential and commercial customer classes.
The company's forward path depends on the outcome of the CCN filings submitted to the ICC and MoPSC, with decisions on those long-range transmission projects expected in 2025.