AMEREN CORP

Ameren Missouri and Ameren Illinois have implemented energy-efficiency programs to educate their customers and to help them become more efficient energy consumers. These programs provide incentives to customers for installing newer, more efficient technology, and for using energy in a more conservation-minded manner. As a component of the energy-efficiency programs, Ameren Missouri and Ameren Illinois have invested in electric smart meters to provide customers more visibility to their energy consumption and facilitate more efficient use of energy. As of December 31, 2024, Ameren Missouri and Ameren Illinois have completed the transition to smart meters, which have been installed for nearly all electric and natural gas customers.

In Missouri, the Missouri Energy Efficiency Investment Act established a rider that, among other things, allows electric utilities to recover costs with respect to MoPSC-approved customer energy-efficiency programs. The law requires the MoPSC to ensure that a utility’s financial incentives are aligned to help customers use energy more efficiently, to provide timely cost recovery, and to provide earnings opportunities associated with cost-effective energy-efficiency and demand response programs. Missouri does not have a law mandating energy-efficiency or demand response programs.

In November 2024, the MoPSC issued an order approving a nonunanimous stipulation and agreement for Ameren Missouri’s MEEIA 2025 plan, which includes a portfolio of customer energy-efficiency and demand response programs, along with the continued use of the MEEIA rider. Ameren Missouri intends to invest $51 million annually in 2025 and 2026 and $22 million in 2027 for customer energy-efficiency and demand response programs. In addition, the order approved performance incentives applicable to each plan year to earn revenues by achieving certain spending and demand response goals. If 100% of the goals are achieved in 2025, 2026, and 2027, Ameren Missouri would earn performance incentive revenues of $5 million, $5 million, and $2 million, respectively. Through 2024, Ameren Missouri has invested approximately $415 million in MEEIA 2019 customer energy-efficiency and demand response programs.

The MEEIA rider allows Ameren Missouri to collect from customers its actual program costs, lost electric revenues, and any performance incentive, without a traditional regulatory rate review, subject to MoPSC prudence reviews, until lower volumes resulting from the MEEIA programs are reflected in base rates. Customer rates, based upon both forecasted program costs and lost electric revenues and collected via the MEEIA rider, are reconciled annually to actual results.

Pursuant to Illinois law, Ameren Illinois offers customer energy-efficiency programs, and is subject to electric energy-efficiency savings goals and a maximum annual amount of investment in electric energy-efficiency programs. Ameren Illinois’ planned investments in electric energy-efficiency programs is approximately $120 million in 2025 and approximately $125 million annually from 2026 to 2029. Every four years, Ameren Illinois is required to file a four-year electric energy-efficiency plan with the ICC. In June 2022, the ICC issued an order approving Ameren Illinois’ electric and natural gas energy-efficiency plans for 2022 through 2025, as well as regulatory recovery mechanisms. The order authorized electric and natural gas energy-efficiency program expenditures of $476 million and $66 million, respectively, over the four-year period. Ameren Illinois is required to file an updated four-year electric energy-efficiency plan with the ICC by March 2025.

Illinois law allows Ameren Illinois to earn a return on its electric energy-efficiency program investments. Ameren Illinois’ electric energy-efficiency investments are deferred as a regulatory asset and earn a return at the applicable WACC, with the ROE based on the annual average of the monthly yields of the 30-year United States Treasury bonds plus 580 basis points. The allowed ROE on electric energy-efficiency investments can be increased or decreased by up to 200 basis points, depending on the achievement of annual energy savings goals. While the ICC approves Ameren Illinois’ four-year electric energy-efficiency plans, the ICC has the ability to reduce the amount of approved electric energy-efficiency savings goals in future plan program years if there are insufficient cost-effective programs available, which could reduce the investments in electric energy-efficiency programs. The electric energy-efficiency program investments and the return on those investments are collected from customers through a rider and are not included in the electric distribution service MYRP framework. Ameren Illinois’ natural gas energy-efficiency program costs are recovered through a rider.