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Ameren Missouri sees power sales decline during H1'19

Ameren Corp. said Aug. 2 that it suffered a drop in earnings during the first half of the year compared to the same period in 2018 due largely to lower retail power sales by its main electric utilities.

The St. Louis-based utility holding company said that utility subsidiary Ameren Missouri's earnings reflected lower electric retail sales due to mild early summer temperatures compared to what the company called "extremely warm early summer temperatures in the year-ago period."

In the first six months of the year, Ameren Missouri, known legally as Union Electric Co., saw its total electric sales fall 15.6% compared to the first half of 2018. Its second-quarter 2019 electric sales were down almost 25%.

The utilities' retail load declined 5.9% in the first six months of 2019 compared to the same period in 2018, a trend being noted in numerous other US electric utility earnings calls this week.

Revenue from Ameren Missouri's retail load fell to $1.40 billion in the first half of 2019 from $1.54 billion in the first half of 2018.

Ameren executives also told analysts that the cost of refueling and the maintenance outage of its 1,215-MW Callaway Nuclear Generating Station near Fulton, Mo., had increased compared to 2018, and that the Ameren Illinois Natural Gas earnings had also declined due to a change in rate design.

The company said, however, that some of its earnings decline was offset by increased infrastructure investments that drove higher earnings at Ameren Transmission and Ameren Illinois Electric Distribution.

Ameren Corp. said in its second-quarter 2019 earnings statement that it had net income attributable to common shareholders of $179 million, or 72 cents per diluted share, compared to second-quarter 2018 net income attributable to common shareholders of $239 million, or 97 cents per diluted share.

Strategic focus on the grid

Ameren Corp. Chairman, President and CEO Warner Baxter told analysts that Ameren's "strategy" is to invest in the modernization of the grid. "We expect the energy grid will be increasingly more important and valuable to our customers, communities and shareholders," he said.

The aim, he said, will be to enable two-way energy flows to accommodate more renewables, distributed energy resources and innovative products and services. He said the company also wants to support increased electrification of transportation.

Baxter said that Ameren is expecting electric and natural gas transmission and distribution investments to grow to about 76% of total rate base by the end of 2023.

Meanwhile, the company is expecting to retire in 2022 the 872-MW coal-fired Meramec Energy Center in St. Louis County.

It said it wants its coal and natural gas-fired generation to be roughly 11% of total rate base by the end of 2023, compared to 16% in 2018.

Ameren is in "transition" to a cleaner energy mix, executives said, and has build-transfer agreements in place for 700 MW of wind generation that it hopes will be in service by the end of 2020.

In its presentation it said that 100 MW of solar generation by 2027 is also part of the plan.

Jeffrey Ryser is a reporter for S&P Global Platts. S&P Global Platts and S&P Global Market Intelligence are owned by S&P Global Inc.