Company: AILIM
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0001002910-25-000055
Chunk: 305

Company: Ameren Illinois Co
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 305
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– Summary of Significant Accounting Policies under Part II, Item 8, of this report.•Discount rates•Cost escalation rates•Changes in regulation, expected scope of work, technology, or timing of environmental remediation•Estimates as to the probability, timing, or amount of cash expenditures associated with AROs

Basis for Judgment

We record the estimated fair value of legal obligations associated with the retirement of tangible long-lived assets in the period in which the liabilities are incurred and capitalize a corresponding amount as part of the book value of the related long-lived asset. In subsequent periods, we adjust AROs for accretion and changes in the estimated fair values of the obligations, with a corresponding increase or decrease in the asset book value for the fair value changes. We estimate the fair value of our AROs using present value techniques, in which we make various assumptions about discount rates and cost escalation rates. In addition, these estimates include assumptions of the probability, timing, and amount of cash expenditures to settle the ARO, and are based on currently available technology. Ameren and Ameren Missouri have recorded AROs for retirement costs associated with decommissioning of Ameren Missouri’s Callaway and wind renewable energy centers, certain Ameren Missouri solar energy centers, CCR facilities, and river structures at certain energy centers used for unloading coal and circulating water systems. Additionally, Ameren, Ameren Missouri, and Ameren Illinois have recorded AROs for retirement costs associated with asbestos removal and the disposal of certain transformers. See Note 15 – Supplemental Information under Part II, Item 8, of this report for the amount of AROs recorded at December 31, 2024.

A significant portion of Ameren’s and Ameren Missouri’s AROs relate to the decommissioning of Ameren Missouri’s Callaway Energy Center. Changes in key assumptions could materially affect the decommissioning obligation. The following table reflects the sensitivity of potential changes in key assumptions to Ameren Missouri’s Callaway Energy Center decommissioning obligation as of December 31, 2024:

Change in Callaway Energy Center’s Key ARO AssumptionsIncrease (Decrease) to ARODiscount rate decreased by 0.10%$12 Cost escalation rate increased by 0.25%28 Increase in the estimated decommissioning costs by 10%47 Two-year deferral in timing of cash expenditures(31)

Impact of New Accounting Pronouncements

See Note 1 – Summary of