Martin Lyons
President, Chief Executive Officer at Ameren
Thanks Megan. Good morning everyone, and thank you for joining us. We had a solid quarter, and we're excited to share an update today on a number of recent developments. As always, our team continues to work hard to execute our strategic plan across all of our business segments, allowing us to deliver significant value to our customers and shareholders. Yesterday, we announced second quarter 2022 earnings of $0.80 per share compared to earnings of $0.80 per share in the second quarter of 2021. The year-over-year results reflected increased infrastructure investments across all our business segments that will drive significant long-term benefits for our customers. The key drivers of our second quarter results are outlined on this slide.
I am pleased to report that we remain on track to deliver solid earnings growth in 2022, and are reaffirming our 2022 earnings guidance range of $3.95 per share to $4.15 per share. Michael will discuss our second 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, enhance 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 based growth plans, which are supported by constructive regulatory frameworks.
You can see on the right side of this page, we continue to strategically invest significant capital in each of our business segments in order to maintain safe and reliable operations, as we transition to a cleaner energy grid. Regarding regulatory matters earlier this week Ameren Missouri filed an electric rate review with the Missouri Public Service Commission requesting a $316 million annual revenue increase. This request reflects significant modernization upgrades to the electric grid for system reliability, resiliency and safety, as well as investments to support the transition to cleaner energy for the benefit of our customers and local communities.
In our Illinois Electric business, we recently requested an $84 million revenue increase in our required annual electric distribution rate filing. Again key drivers for this rate increase includes significant investments to enhance the grid for our customers and communities, which will deliver long-term benefits. Michael will cover these in more detail a bit later, and we will provide updates on these proceedings as they develop later this year. As we invest to build a safer stronger smarter and cleaner energy grid for our customers we also continue to work diligently to manage our costs, leverage our investments and optimize our performance.
Moving now to Page 7, and the second pillar of our strategy, enhancing regulatory frameworks and advocating for responsible energy and economic policies. Without question energy policy at the federal and state levels and constructive regulatory frameworks that incentivize meaningful and needed infrastructure investments have never been more important, as we look to reliably and securely transition to a cleaner energy future as affordably as possible. As you know, late last week, it was announced that Senator's Schumer and Manchin reached agreement on proposed legislation that would, among other things, extend significant incentives for clean energy development and deployment.
Given the clean energy transition underway in Illinois and Missouri, as highlighted by our recent change to the Ameren Missouri Integrated resource plan filed with the Missouri PSC in June, and our goal of reaching net zero carbon emissions by 2045 we are very excited about the potential benefits of this legislation. Specifically the credits proposed for wind, solar, storage, nuclear, carbon capture utilization and storage or CCUS and hydrogen all aligned very well with the significant investments proposed in the Missouri IRP. Importantly the benefits of these tax incentives will ultimately lower the cost of the clean energy transition for our customers in Missouri and Illinois over time.
These potential tax credits when coupled with the significant clean energy funding made available through the infrastructure investment in JOBS Act passed earlier this year, will drive significant long-term benefits for our customers, communities and the country. I will also note that the proposed legislation includes a minimum corporate income tax for public companies with pre-tax book earnings above $1 billion. At the state level as part of the Ameren Missouri's Smart Energy Plan a multiyear 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.
As we mentioned on our first quarter earnings call Missouri Senate Bill 745 which enhances and extends the Smart Energy Plan passed earlier this year with strong majority support in the General Assembly. The bill was later signed by Governor Parson. We believe extending Missouri's 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, and while creating significant economic development and jobs in the state.
Moving to Page 8, for Illinois legislative matters, we continue to make progress working towards the implementation of the Illinois energy transition legislation enacted last year including the performance metrics required by the legislation Ameren Illinois has proposed eight performance metrics each were 3 basis points of incentives for a total of 24 basis points of symmetric, equity return, upside or downside potential. The ICC staff is mostly aligned with the Ameren Illinois on the performance metrics and his proposed a range of 20 to 24 total basis points of increased or decreased return opportunities. We expect a final order from the ICC by late September in the performance metrics target.
We look forward to the ICC's order and filing our first multi-year rate plan next year, as we believe this legislation will support important energy grid investments and deliver value to customers. Turning to Page 9, for an update on our plan to accelerate the retirement of the Rush Island Energy Center. Last month in response to our notification to MISO of our intention to retire the energy center MISO issued its final Attachment Y Report designating the generating units at the Rush Island Energy Center, as system support resources. MISO also concluded that certain mitigation measures including transmission upgrades should occur to ensure reliability before the energy center is retired. Those transmission upgrade projects have been approved by the MISO and we have started the design in procurement process associated with the upgrades, which we expect to complete by late 2025.
In the interim until Rush Island can be retired Ameren Missouri has proposed limiting operations at the energy center. The District Court is under no obligation or deadline to issue a rule modifying its remedy order to reflect the MISO SSR designation or proposed interim operating parameters. The original March 2024 compliance date remains in effect unless extended by the court. We expect a decision in the near term.
Turning now to Page 10, for an update on changes to our 2020 Ameren Missouri Integrated Resource Plan, which we filed in June. Our IRP is a 20-year energy plan created to ensure reliability for our customers for years to come. I'm excited to share with you that these changes to the plan accelerate our clean energy additions, reduced carbon emissions even further in the short term, and accelerate the company's and net zero carbon emissions goal by five years. Specifically, the plan targets a 60% reduction in carbon emissions below 2005 levels by 2030 and an 80% reduction by 2040 and by 2045 our goal is to achieve net zero carbon emissions across all of Ameren.
The new goals include both Scope 1 and Scope 2 emissions including other greenhouse gas emissions of methane, nitrous oxide in sulfur hexafluoride. We plan to achieve these goals by making significant investments in renewable energy, including 2,800 megawatts of renewable energy by 2030, representing an investment opportunity of $4.3 billion. This is an increase of $1 billion from our 2022 or excuse me, our 2020 IRP. By 2040 in total, the plan includes 4,700 megawatts of renewable generation for total investment opportunity of $7.5 billion. The plan also includes 1,200 megawatts of gas combined cycle generation by 2031 an investment opportunity of $1.7 billion, which will allow us to safely and reliably advance the net retirement timeline of our fossil generation including the accelerated retirement of the Rush Island Energy Center.
Further, the plan includes 800 megawatts of battery storage by 2040, representing an investment opportunity of $650 million. We expect to add 1,200 megawatts of a clean dispatchable resource by 2042 and to also seek an extension of the operating license of our carbon free Callaway Nuclear Energy Center beyond the current expiration date of 2044. These changes to the 2020 IRP will drive our ability to meet customers' rising needs and expectations for reliable, affordable and clean energy sources. Achieving these goals is dependent upon a variety of factors including cost-effective advancements in innovative clean-energy technologies and constructive federal and state energy and economic policies. We have issued a request for proposal to solicit solar and wind projects that will allow us to take the next steps and deliver the best value for our customers. One thing is clear, our IRP includes significant incremental investment opportunities, and we're very excited. As we continue to execute our clean energy transition plan.
Turning now to Page 11. Speaking of executing our clean energy transition plan in July we filed certificates of convenience and necessity or CCNs with the Missouri Public Service Commission for two solar project acquisitions. Boomtown a 150 megawatt solar energy center located in Southern Illinois is expected to be in service by the fourth quarter of 2024 Huck Finn a 200 megawatt solar energy center located in Eastern Missouri would be Ameren's largest solar project to-date generating more than 25 times the amount of energy of Missouri's largest existing solar facility. This solar project is also expected to be in service by the fourth quarter of 2024.
While the Missouri PSC is under no deadline to issue an order on the CCN filings we expect decisions by March and April, 2023 for the 200 megawatt and the 150 megawatt facilities, respectively. Looking ahead, we expect to announce further agreements for the acquisition of renewables between now in the first half of 2023. Turning to Page 12, and 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 2009, 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 transportation sector among other things.
In July MISO approved Tranche 1 a set of projects located MISO North, which had estimated to cost more than $10 billion. Of these projects, approximately $1.8 billion represent projects in our service territory that have been assigned to Ameren. We expect to refine the scope, cost estimates and timeline for these projects over the remainder of this year. In addition to the assigned projects MISO approved approximately $700 million of competitive projects across through our Missouri service territory, which provide additional potential investment opportunities.
We are well positioned to compete for and successfully execute on these projects given the location of the projects and our expertise constructing large regional transmission projects. Later this month MISO is expected to post a schedule outlining the RFP process for competitive bidding with the first RFP expected to be issued by late September. The competitive bidding process is expected to take 12 to 24 months. For the projects assigned to Ameren we expect the capital expenditures to begin in 2025 with the completion dates expected near the end of this decade. MISO has also begun work on three additional tranches and has indicated that an initial set of Tranche 2 projects also located MISO North is expected to be approved in the second half of 2023.
Projects included in Tranche 3 are expected to be located MISO South with approval scheduled by the end of 2024 while projects identified in Tranche 4 are expected to improve transfer capability between MISO North and MISO South, and will be studied upon approval of Tranche 3. Turning then to Page 13. Looking ahead, over the next decade we have a robust pipeline of investment opportunities that will deliver significant value to all of our stakeholders by making our energy grid stronger smarter and cleaner. We have updated the investment opportunities to reflect the additional renewable and combined cycle generation included in the change to the IRP filed in June.
We now expect over $48 billion of investment opportunities over the next decade. Maintaining constructive energy policies that support robust investment in energy infrastructure and a transition to a cleaner future in a responsible fashion will be critical to meeting our country's energy needs in the future and delivering on our customers' expectations.
Moving now to Page 14. We are focused on delivering a 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. The change to the Ameren Missouri IRP filed in June supports our goal of net zero carbon emissions by 2045 and is also consistent with the objectives of the Paris Agreement and limiting global temperature rise to 1.5 degree Celsius. We also remain focused on supporting our communities, including our very robust supplier diversity program. Our strong sustainable growth proposition remains among the best in the industry. We have a robust pipeline of future investments that will continue to modernize the grid and enable the transition to a cleaner energy future. 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 15. 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-based growth supported by strategic allocation of infrastructure investment to each of our operating segments based on their constructive regulatory frameworks.
We expect Ameren's future dividend growth to be in line with our long-term earnings per share growth expectations and within a payout ratio range of 55% to 70%. We expect to deliver strong long-term earnings and dividend growth, which resulted in attractive total return that compares favorably with our regulated utility peers. I am 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.
Finally, turning to Page 16. I would like to take the opportunity to congratulate Richard Mark on his retirement and extend my gratitude for his many contributions made to Ameren and our communities. Richard served in several leadership positions during his 20-year career at Ameren, and was influential in the advancement of the electric and natural gas distribution grids throughout Southern and Central Illinois including installing advanced technologies, improving reliability and creating thousands of jobs, in addition to a strong community engagement. Thank you, Richard, and I wish you well in your retirement.
I would also like to introduce to you Ameren Illinois New President Lenny Singh. Lenny brings more than 30 years of utility experience serving in both electric and natural gas operations, most recently as Senior Vice President of Consolidated Edison Company of New York. Over the course of his career Lenny is focused on operational excellence and value creation prioritizing safety, customer satisfaction, continuous improvement action and accountability. I look forward to working with Lenny, as he builds on the Ameren Illinois success as we work to safely reliably and securely drive the clean energy transition in the State of Illinois.
Again, thank you all for joining us today, and I will now turn the call over to Michael.
