Martin J. Lyons Jr.
Chairman and President at Ameren
Thanks, Andrew. Good morning, everyone, and thank you for joining us. We've had a solid start to the year and our team continues to effectively execute our strategic plan across all of our business segments, allowing us to deliver consistently strong results for our customers and shareholders. Yesterday, we announced first quarter 2022 earnings of $0.97 per share compared to earnings of $0.91 per share in the first quarter of 2021. The year-over-year increase of $0.06 per share reflected increased infrastructure investments across all of our business segments that will drive significant long-term benefits for our customers.
The key drivers of our first-quarter results are outlined on this slide. I'm pleased to report that we remain on track to deliver within our 2022 earnings guidance range of $3.95 per share to $4.15 per share. Michael will discuss our first-quarter earnings -- 2022 earnings guidance and other related items in more detail later.
Moving to Slide 5, you will find our strategic plan reiterated. We continue to invest in and operate our utilities in a manner consistent with existing regulatory frameworks, enhanced regulatory frameworks and advocate for responsible energy and economic policies and create and capitalize on opportunities for investment for the benefit of our customers, shareholders and the environment.
Turning now to Page 6, which highlights our commitment to the first pillar of our strategy, investing in and operating our utilities in a manner consistent with existing regulatory frameworks. Our strong long-term earnings growth guidance is primarily driven by our infrastructure investment and rate base growth plans, which are supported by constructive regulatory frameworks. Our plan includes strategically allocating capital to all four of our business segments.
You can see on the right side of this page, we have invested significant capital in each of our business segments during the first three months of this year in order to maintain safe and more reliable operations, all while facilitating and driving a clean energy transition. Regarding regulatory matters in late February, new Ameren Missour electric and natural gas service rates went into effect, reflecting significant investment in grid modernization, reliability, resiliency, security and renewable energy generation. In addition, in April Ameren Illinois filed its required annual electric distribution rate update reflecting similar infrastructure investments and service improvements in that jurisdiction and requesting an $83 million increase. Ongoing investment across all four business segments is building a safer, stronger, smarter and cleaner energy grid for our customers now and in the future. At the same time, we are maintaining discipline with regard to costs, leveraging our investments and focusing on continuous improvement to optimize our performance and drive greater value for our customers.
Moving to Page 7, and the second pillar of our strategy, enhancing regulatory frameworks and advocating for responsible energy and economic policies. Over the last several years, we have worked hard to enhance the regulatory frameworks in both Missouri and Illinois to enable meaningful and needed infrastructure investments to support reliability, resiliency and safety. In order to consistently deliver strong value for our customers, communities and shareholders, while practicing responsible environmental stewardship, we continue to work towards enhancing regulatory frameworks and advocating for responsible energy and economic policies. Workshops related to the implementation of the Illinois Energy Transition legislation enacted last year are ongoing and performance metrics related to the multiyear rate plan are expected to be approved by the ICC by late September. We believe this legislation will support important energy grid investments and will deliver value to customers, such as the utility owned solar and optional battery storage pilot projects in two communities, Peoria and East St. Louis.
We are excited to announce that we began construction of an approximate $10 million, 2.5 megawatt solar energy facility in East St. Louis in early March. This energy center will strengthen the energy grid while building a cleaner energy future for this Illinois community.
Before moving on, I'd like to briefly discuss recent energy and capacity purchases made by the Illinois Power Agency on behalf of our Ameren Illinois customers for the upcoming June 2022 through May 2023 planning year. As you know, global events have been impacting the cost of energy commodities and power prices in the Midwest have been elevated. Further, a combination of factors, including higher energy usage, a reduction of dispatchable generation and the constructive MISO's capacity market are all being cited as causes of a spike in regional capacity prices. Unfortunately, as a result of these factors, some of our Illinois customers will be seen a meaningful increase to the energy supply component of their bills beginning in June.
It is important to note that energy and capacity costs are passed onto our Ameren Illinois customers through a rider with no market. While factors leading to these increases and potential prospective mitigation will undoubtedly be discussed amongst stakeholders, our approach remains the same. We will continue to focus on supporting our customers and communities by connecting them with bill assistance where needed and continuing to invest strategically to support a responsible clean energy transition in Illinois.
Moving now to Page 8 in Missouri legislative matters. As part of the Ameren Missouri Smart Energy Plan a multi-year effort to strengthen the grid, our customers are benefiting from stronger poles, more resilient power lines, smart equipment including modern substations and upgraded circuits to better withstand severe weather events and restore power more quickly.
I'm pleased to report that yesterday afternoon, Senate Bill 745 passed by strong majority support in the General Assembly. This bill enhances the Smart Energy Plan legislation enacted in 2018. More specifically, the bill extends the sunset date on the current Smart Energy Plan legislation through December 31, 2028, with an extension through December 31, 2033, if the utility requests and the PSC approves. The bill also modifies the rate cap beginning in 2024 from the current 2.85% compound annual all in cap on growth in customer rates to a 2.5% average annual cap on rate impacts of PISA deferrals.
In addition, the bill expands and extends economic development incentives and provides for a property tax tracker. The bill will now be sent to the governor for signature. We believe extending Missouri Smart Energy Plan will continue to benefit our customers and communities as we transform the energy grid of today to build a brighter energy future for generations to come, all while creating significant economic development and jobs in the state.
Turning to Page 9, we will now provide an update on developments related to our plan to accelerate the retirement of the Rush Island Energy Center. As discussed on our year-end earnings call in late February, Ameren Missouri filed an Attachment Y with MISO notifying of our intention to close the energy center. As a result of that filing, MISO is now studying the grid reliability implications of Rush Island's planned closure in order to determine any investments and interim operating parameters required prior to closure in order to mitigate system reliability risks. I would note MISO's preliminary study completed in January 2022 recommended transmission upgrades and indicated additional voltage support will be needed on the transmission system to ensure reliability.
While MISO is under no deadline to issue a final report, we expect a draft report will be issued this month. The District Court which is awaiting MISO's analysis is also under no deadline to issue a final order regarding the accelerated retirement date. Ameren Missouri expects to file an update towards 2020 Integrated Resource Plan with the Missouri PSC in June which will reflect the expected accelerated retirement date of the Rush Island Energy Center. Such filing will also include discussion of the expected use of securitization in order to recover the remaining investment in Rush Island. We continue to work with all parties involved to move forward with the accelerated retirement in the most responsible fashion.
On Page 10, we turn our focus to the third pillar of our strategy, creating and capitalizing on opportunities for investment for the benefit of our customers, shareholders and the environment. This page provides an update on the MISO long-range transmission planning process. As we have discussed with you in the past, MISO completed a study outlining the potential road map of transmission investments through 2039, taking into consideration the rapidly evolving generation mix that includes significant additions of renewable generation based on announced utility integrated resource plans, state mandates and goals for clean energy or carbon emission reductions as well as electrification of the transmit -- transportation sector among other things.
Under MISO's Future 1 scenario, which is the scenario that resulted in an approximate 60% carbon emission reduction below 2005 levels by 2039, MISO estimates approximately $30 billion of future transmission investment would be necessary in the MISO footprint. Under its Future 3 scenario which resulted in an approximate 80% reduction in carbon emissions below 2005 levels by 2039, MISO estimates approximately $100 billion of transmission investment in the MISO footprint would be needed.
As part of Tranche 1, MISO working with key stakeholders, including transmission owners has identified projects located in MISO North estimated to total more than $10 billion. The projects crossing through our Missouri and Illinois service territories provide significant investment opportunities. We believe we are well-positioned to execute on these projects given the location of the projects and our expertise constructing large regional transmission projects.
MISO approval of Tranche 1 is expected in late July. Work on three additional tranches has begun and MISO has indicated that an initial set of Tranche 2 projects also located MISO North is scheduled to be approved in the first quarter of 2023. Projects including Tranche 3 are expected to be located in MISO South with approval scheduled in the fourth quarter of 2024 while projects identified in Tranche 4 are expected to improve transfer capability between MISO North and MISO South with approval scheduled in the fourth quarter of 2025.
Moving now to Page 11. We are focused on delivering sustainable energy future for our customers, communities and our country. This slide summarizes our strong sustainability value proposition and focus on environmental, social, governance and sustainable growth goals. Our preferred plan included in Ameren Missouri's 2020 IRP supports our goal of net zero carbon emission by 2050 as well as interim carbon emission reduction targets of 50% and 85% below 2005 levels 2030 and 2040 respectively, which is consistent with the objectives of the Paris agreement and limiting global temperature rise to 1.5 celsius.
As previously noted, the IRP will be updated in June to reflect, among other things, MISO's long-range transmission planning, legislative and regulatory developments and the early retirement of Rush Island. We continue to work diligently to optimize our sustainability value proposition, including our clean energy transition and just last month, we announced completion of our newest clean energy resource, a 6-megawatt solar facility.
The Montgomery County Solar Center is part of our Missouri Community Solar program which began in 2018, offering customers the opportunity to invest in solar energy generation in their community through a shared system. The energy center is now up and running and supporting more than 2,000 customers who want to take part in clean energy generation without having to pay high upfront cost to install solar equipment on their own roofs or property. The program is fully subscribed, and we are evaluating expansion opportunities at additional sites. We also have a strong long-term commitment to our customers and communities to be socially responsible and economically impactful.
I am excited to say that this week DiversityInc announced once again that they have named Ameren number 1 on their top utilities list for diversity and inclusion, A list we have probably been part of since 2009. DiversityInc also recognized Ameren as a top company for veterans, black executives as well as a top company for ESG among all industries. This slide highlights a few of the many things we are doing for our customers and communities, including being an industry leader in diversity, equity and inclusion. Further, our strong corporate governance is led by a diverse Board of Directors focused on strong oversight that's aligned with ESG matters. We recently named our first Chief Sustainability and Diversity Officer to further optimize our ESG impact by aligning these interconnected areas.
Finally, this slide summarizes our very strong sustainable growth proposition which remains among the best in the industry. As mentioned on our call in February, we have a robust pipeline of future investments that will continue to modernize the grid and enable the transition to a cleaner energy future. This pipeline includes over $45 billion of investment opportunities over the next decade that will deliver significant value to all of our stakeholders by making our energy grid stronger, smarter and cleaner. Of course, our investment opportunities will not only create a stronger and cleaner energy grid to meet our customers' needs and exceed their expectations but they will also create stronger economies and thousands of jobs for the communities we serve. I encourage you to take some time to read more about our strong sustainability value proposition. You can find all of our ESG related reports at amereninvestors.com.
Turning to Page 12. To sum up our value proposition, we remain firmly convinced that the execution of our strategy in 2022 and beyond will deliver superior value to our customers, shareholders and the environment. In February, we issued our five-year growth plan, which included our expectation of a 6% to 8% compound annual earnings growth rate from 2022 through 2026. This earnings growth is primarily driven by strong rate base growth supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks.
I will note renewable generation and regionally beneficial transmission projects represent additional investment opportunities. We expect to announce further agreements for the acquisition of renewables over the course of this year and to file certificates of convenience and necessity or CCNs with the Missouri PSC after the updates to the 2020 IRP have been filed in June. We expect to deliver strong long-term earnings and dividend growth which results in an attractive total return that compares favorably with our regulated utility peers. I'm confident in our ability to execute our investment plans and strategies across all four of our business segments as we have an experienced and dedicated team to get it done.
Again, thank you all for joining us today and I will now turn the call over to Michael.
