Martin J. Lyons
Chairman, President and Chief Executive Officer at Ameren
Thanks, Andrew. Good morning, everyone. Thank you for joining us today as we cover our third quarter 2024 earnings results.
I'll begin today on Page 4. We're focused on delivering strong long-term value for our customers, communities, shareholders and the environment. By investing in rate-regulated infrastructure, enhancing regulatory frameworks and advocating for responsible energy policies, we are positioning ourselves to take advantage of future opportunities to benefit all of our stakeholders. And through a disciplined approach to optimizing our operating performance, we have been able to keep our customer rates low in comparison to the national average as we transform the energy grid to enhance reliability and provide cleaner energy to our communities. We remain excited for the future and we see strong growth opportunities unfolding over the next decade.
Turning to Page 5. Yesterday, we announced third quarter 2024 adjusted earnings of $1.87 per share compared to earnings of $1.87 per share in the third quarter of 2023. These comparable adjusted earnings results were in-line with our expectations. The third quarter and year-to-date 2024 adjusted results exclude two charges related to separate proceedings that had been ongoing for over a decade. The first, related to an agreement in principle to settle the Rush Island Energy Center New Source Review and Clean Air Act proceeding, and the second for customer refunds required by the Federal Energy Regulatory Commission's, FERC's, October 2024 order, which established a new base return-on-equity within the Midcontinent Independent System Operator, or MISO, that was applied retroactively to certain periods extending back to 2013. Key earnings drivers are highlighted on this page. Mike will discuss the factors driving the quarterly results in more detail in a moment.
Our strong investment pipeline continues to drive earnings growth, and I'm excited about the significant economic growth opportunities in the communities we serve. The Greater St. Louis region is experiencing some of the highest employment growth we've seen in the better part of three decades. In August, the region was ranked fourth among large metro areas in the country for employment growth. And we're seeing the strength in our region reflected in strong weather-normalized retail sales growth year-to-date across all customer classes in Missouri.
Turning now to Page 6. Thanks to our team's execution of our strategy over the course of this year, we have a strong foundation as we head into the final months of 2024. We expect to deliver 2024 earnings within our adjusted guidance range of $4.55 per share and $4.69 per share. And we expect our 2025 earnings per share to be in the range of $4.85 and $5.05, with the midpoint representing a 7.1% increase over the midpoint of our 2024 adjusted guidance range. While our historical practice has been to provide initial earnings guidance on our fourth quarter earnings call in February, we're issuing this 2025 guidance now to reinforce our confidence in our ability to look to deliver on our 6% to 8% earnings per share growth guidance expectations. We expect to provide our long-term earnings growth guidance and capital and financing plans on our year-end call in February.
On Page 7, we highlight the latest advancements across Ameren as we execute our strategic objectives for the year. Our infrastructure investment plan is designed to improve the reliability, resiliency, safety and efficiency of our system as we remain focused on a reliable clean-energy transition. Year-to-date, we've invested $3 billion to replace aging infrastructure and also build the new infrastructure needed to meet our customers' growing demands with a diverse mix of energy resources. Just last week, we announced that we have now closed on three solar energy centers this year, totaling 500 megawatts of new generation, which are undergoing final testing and are expected to be in service by the end of the year.
On the regulatory front, MISO's long-range transmission planning process is progressing toward approval of the Tranche 2.1 portfolio by the end of the year. In September, MISO released additional Tranche 2.1 project details, which included approximately $3.6 billion of transmission investment needed in our Missouri and Illinois service territories to support reliability for the region.
At Ameren Missouri, we're working to bring more dispatchable generation onto the grid. In October, the Missouri Public Service Commission, or Missouri PSC, approved a Certificate of Convenience and Necessity, or CCN, and post-construction cost deferral for the 800 megawatt simple-cycle natural gas energy center, Castle Bluff. This $900 million investment in dispatchable generation will support energy reliability in our region and will also create hundreds of construction jobs, several new permanent jobs and additional tax revenue for the region. In addition, in November, we reached an agreement in principle with the U.S. Department of Justice to settle the Rush Island Energy Center New Source Review and Clean Air Act proceeding. I'll cover the details of the agreement in a moment.
And finally, at Ameren Illinois, in October, the Administrative Law Judge, or ALJ, issued a proposed order regarding our revised 2024 through 2027 electric distribution multi-year rate plan. Importantly, the ALJ proposed order supports 99% of our requested rate base, when excluding the impacts of other post-employment benefits, or OPEB. Following our team's extensive engagement with key stakeholders, all the intervenors support the Illinois Commerce Commission's, or ICC's, approval of a revised grid plan with limited adjustments. We look forward to an ICC decision by the end of this year, which we expect to be consistent with the multi-year capital plans we issued in February.
Last, operational performance across our Company remains strong, with a focus on delivering safer, more reliable and affordable energy through grid hardening, enhanced automation, optimization and standardization.
Turning to Page 8 for an update on Ameren Missouri's new generation projects. We continue to execute our Ameren Missouri Integrated Resource Plan, or IRP, which focuses on maintaining and building a diverse cleaner generation portfolio to ensure our reliable and low-cost mix of energy resources to serve our customers' needs. As I mentioned, we have three solar projects in the later stages of commissioning and testing and that are expected to be in service by the end of this year. We're also working toward the successful construction of another 400 megawatts of solar generation across three additional projects, which we expect will be ready-to-serve customers in late 2025 and 2026. Further, as I mentioned, in October, the Missouri PSC approved a CCN for the dispatchable 800-megawatt simple-cycle natural gas energy center, Castle Bluff, following a constructive settlement with the Commission staff and other intervenors. The order also includes post-construction cost deferral to reduce unrecovered costs by allowing us to defer and recover the depreciation expense from the Castle Bluff Energy Center and an adjusted weighted average cost of capital return on the investment from the time it is placed in service to when it is incorporated into base rates.
As solar energy predictably rises and then falls every day, it is vital to have Castle Bluff Energy Center to bolster grid reliability for our customers. Prep work has begun on Castle Bluff, which will be located on the site of our retired Meramec Energy Center, allowing us to cost-effectively expedite the construction by leveraging an existing site with infrastructure in place. The Energy Center is expected to be in service for our customers by the end of 2027. We look forward to continuing to work with key stakeholders to bring additional generation online as quickly as possible to meet the needs of all customers, including businesses looking to relocate or expand in Missouri.
Moving now to Page 9 for an update on the MISO long-range transmission projects. In September, MISO provided additional detail and individual project cost estimates underlying the almost $22 billion Tranche 2.1 portfolio, which is expected to drive significant reliability and capacity benefits for the region. The portfolio includes three projects in our Missouri and Illinois service territories that collectively represent an investment opportunity of approximately $3.6 billion. We await MISO's determination of which projects will be directly assigned or which will go through a competitive bidding process. MISO expects to approve the Tranche 2.1 projects by the end of this year. Once approved, MISO plans to commence work in 2025 on the Tranche 2.2 portfolio to address further transmission needs in the North and Midwest regions. As we continue to see substantial load growth across the country, MISO and its transmission owners will continue to assess whether the current long-range transmission future scenarios will be sufficient to support our region's energy needs in the years ahead.
Moving now to Page 10 for an update on our expanding customer growth opportunities. Our service territories have a broad-based diverse economy, which continues to expand across a variety of manufacturing sectors, including aerospace, agriculture and food processing, to name a few. So far this year, we've received expansion commitments or executed new contracts for approximately 350 megawatts of new load from data centers, manufacturing and other industries, 90% of which is located in Missouri. These projects are expected to create more than to 2,200 jobs. We expect these new and expanding customers to be fully ramped-up by 2028. We're excited about these opportunities and see tremendous additional opportunities for growth over the next five years to seven years, which will bring jobs and additional tax base to benefit our state and local communities.
Through ongoing collaboration with a variety of state and local stakeholders, we continue to attract new business and data center interest. Over the last few months, our economic development pipeline of potential additional demand has doubled in size and we are making meaningful progress with several potential customers. These customers, representing several gigawatts of interest, have completed transmission engineering studies and, over the coming months, each will further evaluate the site locations and determine whether they will move forward with construction agreements. We're pleased to offer reliable service and competitive rates as well as the people, resources, expertise and partnerships needed to deliver for these customers.
The ultimate net financial impact of any incremental load will be dependent upon a variety of factors, including customer ramp-up time, additional generation or grid investments needed, timing of rate reviews and tariff structures. To that end, we are in the process of carefully evaluating potential load growth opportunities and our associated generation portfolio needs and would expect to update our IRP by February of 2025. This is an exciting time in our industry, and we look forward to finding solutions for these significant potential new customers.
Turning then to Page 11. After almost 50 years of providing cost-effective energy to our customers, our Rush Island Energy Center was safely retired on October 15. We are grateful to our co-workers who made this plant a reliable and low-cost energy source for our customers for many decades. Careful planning over several years enabled us to ensure that every employee impacted by the retirement of Rush Island had an opportunity with the Company as we continue to thoughtfully transition our generation resources, while retaining our talented workforce. The Missouri PSC has authorized recovery of approximately $470 million of costs related to retirement of Rush Island through the issuance of securitized utility tariff bonds, and we are working through the next steps to execute that issuance.
In addition, in November, Ameren Missouri and the U.S. Department of Justice reached a settlement agreement in principle requiring Ameren Missouri to fund two mitigation relief programs in addition to retiring the Energy Center. The cost of these programs, which will provide for the electrification of school buses over a three-year period and air purifiers for eligible Ameren Missouri residential customers over 12 months, totaled $64 million. And the charges recorded this year related to this agreement are excluded from our adjusted earnings results. The agreement between the DOJ and Ameren Missouri is subject to approval by the U.S. District Court for the Eastern District of Missouri, which is expected by the end of the year.
Moving to Page 12. Looking ahead, over the coming decade, we have a robust pipeline of investment opportunities of more than $55 billion that will continue to deliver significant value to our stakeholders, create thousands of jobs, generate tax revenue for our local economies and support economic growth in our region. Importantly, our 10-year investment pipeline does not reflect possible additional generation as we evaluate our needs to serve potential additional load growth. Any such changes to our 10-year investment pipeline will be reflected in our February earnings call update.
Moving to Page 13. Our five-year growth plan, released last February, included our expectation of a 6% to 8% compound annual earnings growth rate from 2024 through 2028. This earnings growth is driven by strong compound annual rate base growth of 8.2% and strategic allocation of infrastructure investment to each of our business segments based on their regulatory frameworks.
Investment in Ameren presents an attractive opportunity for those seeking a high-quality utility growth story. Combined, our strong long-term 6% to 8% earnings growth and an attractive and growing dividend, which today yields 3.1%, result in a compelling total return story. We have a strong track-record of execution, a strong balance sheet and an experienced management team. I'm confident in our ability to execute our investment plans and other elements of our strategy across all four of our business segments.
Again, thank you all for joining us today, and I'll now turn the call over to Michael.
