Dive Brief:
- St. Louis-based Ameren expects to grow its federally approved transmission ratebase from $750 million at the end of last year to $2.6 billion in 2018, or about 28% a year.
- As a share of the utility company's total ratebase, transmission will grow from 7% to 18% over the time span. In contrast, Ameren expects its ratebase in Missouri to grow by 2% a year.
- Ameren's “weather-normalized” residential and commercial sales grew 0.6% last year while industrial sales fell 3.2%, mainly on a decline in manufacturing in Illinois. Ameren expects residential and commercial sales to fall 1% and industrial sales to slip 0.7% this year, mainly on energy efficiency programs and federal lightbulb standards.
Dive Insight:
Ameren sold its merchant power plant fleet last year so it is now focusing only on regulated utility operations, with a heavy focus on transmission. Ameren can earn a 12.38% return on equity on transmission projects approved by the Federal Energy Regulatory Commission (FERC). It can earn 9.8% on utility projects approved by the Missouri Public Service Commission.
“We are allocating significant and growing amounts of discretionary capital to our FERC-regulated electric transmission businesses and Illinois deliverable utilities as these operate under formulaic and constructive regulatory frameworks,” Warner Baxter, Ameren president, said.
Ameren expects FERC to keep its pro-transmission stance, despite complaints at the commission seeking lower transmission-related ROEs. “We do have confidence though that the FERC commission is still very pro-transmission development and they understand that the return on equity components are a very important element of continuing to encourage transmission investments,” Maureen Borkowski, head of Ameren's transmission subsidiary, said.
