ITEM 8.01 Other Events.

On September 13, 2021, Senate Bill 2408 ("SB 2408") was approved by the Illinois General



Assembly and will be sent to the Illinois governor. This legislation includes,
among other things, changes to the regulatory framework applicable to Ameren
Illinois' electric distribution business. If SB 2408 is enacted, the existing
performance-based formula ratemaking framework will remain available for
establishing and reconciling rates through 2023. If SB 2408 is enacted, Ameren
Illinois will have the option to establish new rates based on either (i) a
traditional regulatory rate review using a future test year, or (ii) an
investment and operating cost plan for a four-year period (a "Multi-Year Plan"),
which Ameren
Illinois would submit by January 20, 2023, to the Illinois Commerce Commission
("ICC") for review and approval.
Under a Multi-Year Plan, the ICC would establish base electric rates to be
charged to customers for each delivery year of the four-year period beginning in
2024. The ICC would also determine the allowed return on common equity ("ROE")
to be used in establishing rates based on Ameren Illinois' forecasted average
annual rate base. The ROE would be subject to adjustment during the Multi-Year
Plan period based on certain performance metrics that shall include measures
relating to delivery system reliability, supplier diversity, affordability of
customer delivery service cost, the utility's customer service performance,
timeliness of response to customer requests for interconnection of distributed
energy resources, and reductions in peak load due to demand response programs.
SB 2408 provides for symmetrical performance-based ROE incentives and penalties
in a range of 20 to 60 basis points in the aggregate. The revenue requirement
for a particular calendar year would reflect Ameren Illinois' actual capital
structure for such year, with an equity ratio of up to 50% being deemed prudent
and reasonable and a higher equity ratio requiring specific ICC approval.
Annual rate adjustments would be permitted under a Multi-Year Plan to reflect
the actual annual revenue requirement based on Ameren Illinois'
year-end
rate base. The actual annual revenue requirement approved in an annual rate
adjustment may not exceed 105% of the revenue requirement for the annual period
approved by the ICC in the Multi-Year Plan (the
"True-up
Cap"). Subject to ICC prudence review, annual reconciliations would be recovered
from or refunded to customers within 24 months of the applicable annual period.
Certain variations from forecasted costs are excluded from the
True-up
Cap, including those associated with major storms, new business and facility
relocations, changes in the timing of expenditures or investments that move the
expenditure or investment into or out of the applicable calendar year, changes
in interest rates, taxes (including income taxes and taxes other than income
taxes), pension or other post-retirement benefits costs, and amortization of
certain regulatory assets. The
True-up
Cap also excludes costs recovered through riders without a traditional
ratemaking proceeding, such as purchased power, transmission and bad debt costs.
As with the existing formula ratemaking framework, electric distribution
revenues would continue to be decoupled from sales volumes under a Multi-Year
Plan.
If Ameren Illinois elects to file a Multi-Year Plan, SB 2408 permits the
phase-in
of any initial rate increase with at least 50% of the first year's approved rate
increase reflected in the first year, with the remaining portion deferred as a
regulatory asset and recovered in rates over a period not to exceed 24 months
beginning within 12 months after the second year's rates are effective. Ameren
Illinois recognizes revenues when amounts are expected to be collected from
customers within two years from the end of an applicable year.
SB 2408 would also permit Ameren Illinois to make certain investments in
renewable generation and electric vehicle infrastructure, including an aggregate
of up to $40 million for two solar generation and battery storage pilot projects
in East St. Louis and Peoria, Illinois.
There can be no assurance that SB 2408 will become law. If signed by the
Illinois governor, SB 2408 would become effective immediately.


This combined Form
8-K
is being filed separately by Ameren Corporation and Ameren Illinois Company
(each a "registrant"). Information contained herein relating to any individual
registrant has been filed by such registrant on its own behalf. No registrant
makes any representation as to information relating to any other registrant.
--------------------------------------------------------------------------------

© Edgar Online, source Glimpses