Ameren Corp. outlined plans Feb. 18 to reduce its reliance on coal, aiming to shrink its coal-fired generation rate base to 6% by 2026 while growing a portfolio of carbon-free generation.
Ameren, like many other major utilities, is targeting net-zero carbon emissions by 2050. To reach that goal, the company expects to spend about $3.3 billion by 2030 to add 2,400 MW of renewable generation and about $7 billion by 2040 for a total of 4,700 MW, according to a presentation to investors. The company anticipates retiring several coal-fired plants, including its 867-MW Meramec plant in 2022, the 994-MW Sioux plant in 2028, two units at the 2,464-MW Labadie plant in 2036 and another two in 2042, as well as the planned "accelerated retirement" of the 1,218-MW Rush Island plant.
President and CEO Martin Lyons Jr. said the Midcontinent Independent System Operator Inc.'s preliminary assessment of the plan to retire Rush Island found that transmission upgrades and more voltage support are needed to ensure reliability ahead of the plant's closure. The Missouri Public Service Commission will review Ameren Missouri's plans to retire the plant, but executives said on the company's fourth-quarter 2021 earnings call that they did not have a definitive timeline. Ameren Missouri, legally known as Union Electric Co., plans to file an update to its 2020 integrated resource plan later in 2022.
Coal-related revenues accounted for about 15% of Ameren's total revenues in 2021. Its coal-related capital expenditures over the next five years are expected to be about $700 million, or about 4% of the total five-year plan.
Ameren outlined a $45 billion investment pipeline of regulated infrastructure over the next 10 years, executives said on the call, including $17.3 billion over the next five years. About $8.9 billion will go to Ameren Missouri through 2026, while about $3.5 billion is planned for Ameren Transmission Co., $3.1 billion for Ameren Illinois Co. electric distribution and $1.8 billion for Ameren Illinois natural gas.
"We continue to work in earnest with developers to acquire renewable generation projects to be completed in 2024 through 2026," Lyons said, highlighting the recent acquisition of a planned 150-MW solar farm by Invenergy LLC. "We expect to announce further agreements over the course of this year."
The company also plans to pursue an extension of its operating license for the 1,236-MW Callaway nuclear power plant beyond 2044.
Results
Ameren reported full-year 2021 net income attributable to common shareholders of $990 million, or $3.84 per diluted share, up from $871 million, or $3.50 per diluted share, in 2020. The S&P Capital IQ consensus GAAP estimate for Ameren in 2021 was $3.84 per share.
For the fourth quarter of 2021, Ameren reported net income attributable to common shareholders of $125 million, or 48 cents per diluted share, up from $115 million, or 46 cents per share, in fourth-quarter 2020. The S&P Capital IQ consensus GAAP estimate was 49 cents per share.
The company expects 2022 earnings per share to be in the range of $3.95 to $4.15 and anticipates EPS to grow at a 6% to 8% compound annual rate through 2026, using the 2022 guidance range midpoint of $4.05 per share as the base. Ameren's multiyear earnings growth is expected to be driven by projected rate base growth of about 7% compounded annually from 2021 through 2026, the company said.
