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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Ameren Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 8, 2011 04:41PM
Ameren Corp. (AEE) filed Quarterly Report for the period ended 2011-09-30. Highlight of Business Operations:Higher electric base rates at Ameren Missouri, effective June 2010 and July 2011 ($36 million and $138 million, respectively), offset by net base fuel expense ($- million and $25 million, respectively), which was a result of higher net base fuel cost rates approved in the 2010 and 2011 MoPSC rate orders. Net base fuel expense is the sum of fuel - production volume and other (-$14 million and -$32 million, respectively), purchased power (+$13 million and +$53 million, respectively), and off-system revenues (+$5 million and +$66 million, respectively) offset by the FAC under-recovery (-$4 million and -$112 million, respectively). See below for additional details regarding the FAC.Ameren Missouri’s electric margins increased by $28 million, or 4%, and $20 million, or 1%, for the three and nine months ended September 30, 2011, respectively, compared with the same periods in 2010. Ameren Missouri’s electric margins were favorably impacted by higher electric base rates, effective June 2010 and July 2011 ($36 million and $138 million, respectively), offset by net base fuel expense ($- million and $25 million, respectively), which was a result of higher net base fuel cost rates approved in the 2010 and 2011 MoPSC rate orders. Net base fuel expense is the sum of fuel - production volume and other (-$14 million and -$32 million, respectively), purchased power (+$13 million and +$53 million, respectively), and off-system revenues (+$5 million and +$66 million, respectively) offset by the FAC under-recovery (-$4 million and -$112 million, respectively). Decreased energy center utilization for the nine months ended September 30, 2011, when compared to the same period in 2010, primarily due to planned and unplanned outages. Genco’s lower production volume decreased electric revenues by $9 million, which was offset by a $20 million decline in production volume and other costs, which included a $5 million decline in fuel costs and a $15 million decline in emission allowance costs. Lower emission allowance costs were primarily attributable to the impairment of allowances in 2010. Genco’s average capacity factor remained unchanged at 71% year-to-date in 2011 compared with the same period in 2010, and Genco’s equivalent availability factor decreased to 84% year-to-date in 2011, compared with 86% year-to-date in 2010. However, Genco’s energy center utilization increased for the quarter compared to the same period last year. Genco’s higher production volume increased electric revenues by $20 million, which was offset, in part, by a $1 million increase in production volume and other costs, which included a $9 million increase in fuel costs net of an $8 million decline in emission allowance costs. Genco’s baseload coal-fired energy centers’ average capacity factor increased to 79% in the third quarter of 2011, compared with 72% in the third quarter of 2010, and Genco’s equivalent availability factor increased to 92% in the third quarter of 2011, compared with 89% in the third quarter of 2010. Decreased energy center utilization at AERG, for the nine months ended September 30, 2011, when compared to the same period in 2010, primarily due to planned and unplanned outages. AERG’s lower production volume decreased electric revenues by $16 million, which was mitigated by a $10 million decline in production volume and other costs, which included $7 million of fuel cost and $3 million of emission allowances costs. AERG’s average capacity factor decreased to 75% year-to-date in 2011, compared with 76% year-to-date in 2010, and AERG’s equivalent availability factor decreased to 81% year-to-date in 2011, compared with 85% year-to-date in 2010. However, AERG’s energy center utilization increased for the quarter compared to the same period last year. AERG’s higher production volume increased electric revenues by $5 million. Production volume and other costs were comparable. Production volume and other costs included higher fuel cost of $2 million offset by lower emission allowances costs of $2 million. AERG’s baseload coal-fired energy centers’ average capacity factor increased to 84% in the third quarter of 2011, compared with 75% in the third quarter of 2010, and AERG’s equivalent availability factor increased to 91% in the third quarter of 2011, compared with 85% in the third quarter of 2010. The marketing strategy for the Merchant Generation segment is to optimize generation output in a low risk manner to minimize volatility of earnings and cash flow, while seeking to capitalize on its low-cost generation fleet. To accomplish this strategy, the Merchant Generation segment has established hedge targets for near-term years. Through a mix of physical and financial sales contracts, Marketing Company targets to hedge Merchant Generation’s expected output by 80% to 90% for the following year, 50% to 70% for two years out, and 30% to 50% for three years out. As of September 30, 2011, Marketing Company had hedged approximately 27.5 million megawatthours of Merchant Generation’s expected generation for 2011, at an average price of $45 per megawatthour. For 2012, Marketing Company had hedged approximately 21.5 million megawatthours of Merchant Generation’s forecasted generation sales at an average price of $46 per megawatthour. For 2013, Marketing Company had hedged approximately 11 million megawatthours of Merchant Generation’s forecasted generation sales at an average price of $41 per megawatthour. As of September 30, 2011 Marketing Company had also entered into capacity-only sales contracts for 2011, 2012, and 2013, resulting in expected capacity-only revenues related to these contracts of $44 million, $16 million, and $4 million, respectively. Any unhedged forecasted generation will be exposed to market prices at the time of sale. As a result, any new physical or financial power sales may be at price levels lower than previously experienced and lower than the value of existing hedged sales.
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