The coronavirus may delay construction of part of an Ameren Corp. wind project to 2021, Chairman, President and CEO Warner Baxter said on the company’s May 12 earnings call.
Ameren has received all requisite regulatory approvals related to its acquisition of a pair of Missouri wind projects totaling 700 MW, according to Baxter. While construction has commenced and is “well underway,” at least one of the facilities may be delayed in coming online.
The 400-MW High Prairie Wind Farm is still expected online this year, said Baxter. The 300-MW Outlaw Wind Project, however, “is facing greater challenges” as it was slated for completion later in the year. “Manufacturing, shipping and other supply chain issues have negatively impacted the schedule on this project,” he added.
“We have not received formal notice from the developer that any portion of this project will be delayed beyond Dec. 31, 2020, at this time,” said Baxter, adding that “our discussions with the developer indicate that a completion of a portion of the project representing approximately $100 million of investment may go in service in the first quarter of 2021.”
Baxter stressed that, while that scenario would be disappointing, Ameren would still close on approximately $1.1 billion, or 92%, of its planned $1.2 billion investment in wind generation.
“For any portion of the project completed in 2021, we have contractual protections to pay a reduced amount to account for the potential loss of production tax credits, subject to an obligation to later pay the original contracted amount should Ameren be entitled to receive those credits,” said Baxter, expressing optimism with regard to the U.S. Department of the Treasury’s indication last week that in-service criteria for wind tax equity deals may be extended by one year.
Ameren has a “robust pipeline of investments” of over $36 billion excluding any potential new renewable power generation from its next Missouri integrated resource plan and any “potential new multi-value transmission projects,” said Baxter.
The pandemic’s impact has already had a slight impact on the company’s earnings, according to Executive Vice President and CFO Michael Moehn.
“While we did see an impact on electric margins for Ameren Missouri and Ameren Illinois Co. electric distribution due to COVID-19, the impact was not material in the first quarter due in part to the timing of the stay-at-home orders in Illinois that began March 21 and the stay-at-home orders in [St. Louis] and St. Louis County that began March 23,” said Moehn, who is also chairman of Ameren Missouri and president of Ameren Services Co. “Ameren Missouri customer sales for April, excluding the impact of colder-than-normal weather, were down approximately 7%, reflecting the negative impact from COVID-19 compared to the prior year,” Moehn added.
Ameren’s results reflected “earnings on increased infrastructure investments made across all business segments,” according to a statement, with warmer temperatures and higher operations and maintenance costs at Union Electric Co., which does business as Ameren Missouri, functioning as the main contributors to the company’s under-performance.
Lower retail sales due to mild winter weather were a factor in driving down Ameren Missouri’s earnings, as was the absence of energy efficiency incentives, according to Moehn. Lower allowed returns on equity at Ameren Illinois Electric Distribution and Ameren Transmission Co. also impacted the subsidiary’s earnings.
Meanwhile, Ameren is finalizing its plans for the initial phase of reopening with stay-at-home orders in the St. Louis area lifting on May 18. Restrictions in the rest of Missouri were lifted on May 4.
“Of course, we expect restrictions on economic and social activity will continue in all of our communities for some time,” said Baxter. “Since we are an essential business, these orders have not limited our operations or the execution of our strategic plan beyond the safety measures we have implemented for the protection of our coworkers and customers.”
To read the original article, click here.