Marty Lyons: Yeah, I would just say that, look, we have a broad service territory and we’re deeply involved in throughout Illinois and Missouri in economic development activities and our teams support economic development expansion across both service territories. I would say this though, in the greater St. Louis region, both in the Illinois side and the Missouri side, I’m more excited than I’ve been in years with respect to, I would say, the collaborative approach to really going after economic development efforts and really thinking about, how we drive inclusive economic growth, economic development and compete for projects. And I’ve never seen the community as unified and speaking with one voice and going after these things.
We’re seeing some wins, some wins that’ll produce, I think, economic expansion two and three years out, some positive announcements, as Michael said. But, and I hope we are being conservative with respect to our growth projections. That said, as we see growth, we often see also, continued efforts on energy efficiency, both the energy efficiency we promote, but also just kind of energy efficiency in general and so try to be realistic about our growth expectations of those efforts.
David Arcaro: And then was just curious, what level of FFO to debt you’re seeing over the plan? Wondering to the extent you realize some of the CapEx upside opportunities, how that could impact the equity needs going forward?
Michael Moehn: Yeah, perfect. So, again, we haven’t really given targets in the past. I think what we’ve talked about is, look, we like our ratings where they are, BAA1, BBB+, that downgrade threshold S&P is 13. 17 at Moody’s. We’ve trended obviously closer to that 17%. Again, as I outlined in my opening remarks, we feel good about our balance sheet. I think we come into this from a position of strength as I look out over the five years, the equity needs that I outlined certainly support, I believe actually maintaining that BAA1 and so maintaining something over that 17%, over that five year period. And so, and again, I try to be clear on what we did from an equity standpoint, for 2024, we’re assuming $300 million of equity.
We’ve done about $230 million under our ATM program today. Really the remaining balance that we need to do is related to our DRIP 401k. And then for all the other years, it’s really consistent with where we had been before. So basically $600 million and again, I think supports those credit ratings that I just spoke about.
Operator: Our next question comes from line of Durgesh Chopra with Evercore. Please receive your question.
Durgesh Chopra: Hey guys, thanks for giving me time. I know it’s close to the hour. Just Michael, on the point about equity, maybe you could just expand on this. So the CapEx plan is up, the five year CapEx plan is up close to 10%, a little over 10%, but the equity is kind of the same. Are you kind of modelling now lesser question versus the downgrade thresholds or are there other cash flow improvements that you might be missing?
Michael Moehn: Yeah, I don’t know if there’s other cash flow improvements. Again, I think we’re always been conservative as we think about the balance sheet and so, again, I feel good about what I just said, David, in terms of how we’re thinking about the FFO to debt over time and being above that downgrade threshold at 17%. We continue to obviously work with the rating agencies. We’ll be in talking to them again in the spring and so, I guess I don’t have any reason to feel concerned about it at this point and again, I think it’s the right thing to do. We added the capital and still feel good about the levels that we’re at given the equity that we’re issuing.
Durgesh Chopra: Got it. And then maybe just a couple of clarifying questions and this will be quick, hopefully, but in the current five year CapEx plan, the four solar projects that you have settlement for in Missouri, those are included in the plan. Confirm that for us and then the upside would be the Missouri IRP results and then any transmission project awards from the MISO planning. Am I thinking about it correctly?
Marty Lyons: Well, I think, first of all, yes. The projects that we’ve already had CCNs for, as well as the subject to the stipulation are included in the five-year CapEx that’s shown on Slide 23 and in fact, some additional CapEx as well for renewable projects that we anticipate to come into service by the end of 2028. And then the second part of your question was?
Durgesh Chopra: It was just the traffic upside.
Marty Lyons: No, I would think there, what we’re saying is with respect to transmission, we’ve got the Tranche 1 projects that have been assigned to us or awarded or included in there, but what we have not included in there is any upside for a potential additional win of a transmission project that we’ve proposed on.
Durgesh Chopra: Got it. Thank you so much. I appreciate the time.
Operator: Thank you. Our final question comes from the line of Julien Dumoulin Smith with Bank of America. Please proceed with your question.
Julien Dumoulin Smith: Hey, good morning team. Thank you guys very much for the time. I appreciate it, or squeezing me in here. Look, maybe just to kick off quickly here, just on the balance sheet, obviously you’re bringing down equity slightly over the comparable period from last plan. I’m taking CapEx fairly meaningfully here. I just wanted to clarify, just where are you relative to the required metrics? Can you elaborate a little bit through the cadence of the plan, how you’re thinking about the FFO to debt? Or just where are you starting and ending, if you will and then I got to follow up real quickly.
Michael Moehn: Yeah, good morning, Julian. It’s Michael. As I said, we have — the downgrade threshold of Moody’s is 17% and we historically haven’t talked about exactly what we’re targeting. But again, over this five-year plan, there is cushion over that 17%. Again, I feel good about it. We have been, I think, done a great job of sort of telegraphing what our equity needs, being very disciplined about going out and issuing that equity. I think we come into this kind of super CapEx environment with a very, very healthy balance sheet. As you know, we’re not trying to get up to some level, right, where we’ve been at these levels and I see us staying at that level over the five-year plan.
Julien Dumoulin Smith: Got it, so every year kind of over that 17% threshold, give or take. And the rating is…
Michael Moehn: Over the five-year plan, yeah. Over 17%.
Marty Lyons: And again, look, as we have frequent conversations, then we’ll go in again and have another conversation with them, so.
Julien Dumoulin Smith: Wonderful. And just to clarify this on the Missouri CapEx, obviously that’s a nice uptick there and obviously you haven’t necessarily decided when you’re finally cased, but how do you think about just the clarity that you have on that spend, right? When you think about having visibility tied to specific projects that are likely to be approved or what have you, I just want to understand the level of confidence that there is in this CapEx in Missouri. Obviously you’re putting a lot more in there. Just wanna understand what are the key parameters, what are the key inputs that you’re thinking about in saying, look, we’ve got confidence in the totality of this, right? What pieces aren’t necessarily approved perhaps?
Michael Moehn: Well, look, I think one of the things you could look at, Julien, is every year at this time, we make a filing in Missouri where we’re very transparent and lay out what our planned capital expenditures are, how we’re justifying those, thinking about those, where they plan to go and so you’ll see that actually today coming from Ameren, Missouri. It happens every year at the same time and then it’s subject to public discussion about the plans and where they’re going. I would say this, as you look at Missouri, it’s really, as I said earlier, it’s really to align our investment with the things that were in our IRP last fall. So, we do plan to invest in an 800 megawatt simple cycle plant. We do plan to continue to invest in our dispatchable resources, which is both our coal-fired energy centers to get them through to their retirement, making sure that they’re reliable and efficient, making sure that we continue to invest in our nuclear facilities.
So we’ve got a lot of dispatchable resources there. And then as it related to the IRP, also we had planned investments in renewables in some over this five-year period and in battery storage as well and so those are included in the plan. As I mentioned earlier, with respect to renewables, we got a positive order out of the commission on a couple of CCNs last year. We’ve got four that are pending right now that we believe will be filing a stipulated settlement here in the short term. And we would look to commission approval, but those would be subject to commission approval. And then we’ve got other planned investments in renewables, again, in accordance with that IRP. And then with respect to the remainder of the spend, it really has to do with continued investment in our distribution infrastructure.
I think our customers are seeing a lot of benefits today, as I mentioned in our prepared remarks, especially when we have severe weather events. We’re seeing the infrastructure investments that we are making, which are stronger, thicker, taller poles, smart automation, distribution automation, our system, new substations. We’re really seeing the benefit of that in terms of reduced frequency of outage. I mentioned earlier, the hit top quartile in terms of safety measures or frequency of outages here. So seeing a lot of benefits from that, but, we’ve only really been at that since 2018, and there’s a tremendous amount of investment still to be made, really decades of investment still to be made in terms of not only replacing aging infrastructure, but really modernizing that infrastructure to make sure that the kind of benefits that we’re seeing in terms of reduced frequency and duration of outages across our service territory in Missouri.
So again, all of that is subject to further planning and etcetera, but I think, again, I’d point you to today’s filing in Missouri, which really lays out all the specifics in terms of the plans we had to invest and the justification. With that, I’ll stop.
Operator: Thank you. Mr. Lyons, I would now like to turn the floor back over to you for closing comments.
Marty Lyons: Yeah, well, thank you. And I wanna thank everybody for their participation today, their questions. We thank you for your investment, your confidence in our Ameren team. We’re going to work to build on the best we have of delivering reliable, safe and affordable energy for our customers and communities across both Missouri and Illinois. So look, everybody, be safe and we look forward to seeing many of you at conferences over the next few weeks.
Operator: Ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.
