ST. LOUIS — Ameren Corp. reported slumping third-quarter earnings and said tough regulatory decisions in Illinois had short-circuited its bottom line.
Now the company’s Ameren Illinois utility is fighting back with legal action aimed at winning higher charges for delivering electricity to its 1.2 million customers in Illinois.
Ameren Corp.’s third quarter numbers showed overall core earnings of $323 million or $1.33 per share, down sharply from the $381 million or $1.57 per share earned in the third quarter of 2011.
Ameren Illinois burned a hole in the profit picture with its core third-quarter earnings of $70 million, a collapse of $29 million from the $99 million it generated in the third quarter of 2011. Addressing analysts in a conference call, Ameren management said a September decision by Illinois state regulators cost it some $48 million in revenue. Those regulators, the Illinois Commerce Commission, had refused a rehearing in the rate case and now Ameren Illinois has appealed to the 4th District Appellate Court.
Tom Voss, Ameren Corp.’s president, chairman and CEO, said the Illinois utility is also battling to get a complex program of “smart grid” improvements approved by the ICC — an earlier plan was rejected because it didn’t spell out customer savings and benefits — and now worries it won’t have enough money to get the job done.
“Unfortunately, the disappointing ICC order (from September) jeopardizes Ameren Illinois’ ability to implement advanced metering and other infrastructure improvements,” said Voss. He also said the company would struggle to meet job creation targets specified by Illinois lawmakers as part of legislation which overhauled the way utilities can charge for their services.
Voss said Ameren Illinois would reduce or defer $30 million in capital spending planned for 2013 to compensate for its shrinking earnings. He said the utility was also looking at going back to Illinois lawmakers to seek “legislative remedies,” presumably to force the ICC to take a different attitude in future rate cases.
Marty Lyons, Ameren Corp.’s chief financial officer, said the ICC rate order and other setbacks suffered by Ameren Illinois had “reduced core earnings by 12 cents per share compared to the third quarter of 2011.”
Ameren Corp has now narrowed its 2012 core earnings guidance range to $2.35 to $2.45 per share, as opposed to the previous estimate of $2.25 to $2.55 per share.