Ameren Corporation (AEE - Free Report) subsidiary — Ameren Missouri — recently announced that the Missouri Public Service Commission has approved new lower electric rates for residential, commercial and industrial customers effective from April. This approval will reduce monthly bills for the typical residential customer by approximately $1.25 per month.
The company was able to provide the rate cut due to the approval of $32 million decrease in its annual revenue requirement. This rate cut marks the second decrease in rates in since 2018. Notably, last time the company had lowered rates by 6%, as a part of its Smart Energy Plan.
Though the decline in utility rate looks insignificant in the face of current coronavirus-induced financial crisis that’s plaguing customers, it will instill optimism in the service provider.
Smart Energy Plan Will Help
Ameren has implemented Smart Energy Plan for infrastructure upgradation and to improve reliability with clean energy. Through this plan the company is also trying to keep customer rates affordable. This also promotes usage of more clean energy like wind and solar. Notably, the company aims at expanding renewable sources by adding at least 700 megawatts (MW) of wind generation by 2020 in Missouri and 100 MW of solar generation by 2027. Under this plan, the company is seeking regulatory permission to spend $68 million on three solar-battery pilot projects. These projects will increase the effectiveness and viability of its renewable projects.
Ameren Missouri has plans to invest $7.6 billion over the next five years to develop a cleaner and stronger energy grid. On this regard it is imperative to mention that the recent rate cut by Fed will be beneficial for the company to borrow funds. This will fulfil the company’s target to keep lower electric rates for its 1.2 million electric customers.
Zacks Rank and Price Movement
Ameren currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of the company have lost 9.2% in past 12 months compared with the industry’s decline of 14.4%.
Other Key Picks
Some other top-ranked stocks from the same industry are NorthWestern Corporation (NWE - Free Report) , Pacific Gas & Electric Co. (PCG - Free Report) and Duke Energy Corporation (DUK - Free Report) . NorthWestern sports a Zacks Rank #1, while Pacific Gas & Electric and Duke Energy carry a Zacks Rank #2 (Buy).
Long-term earnings growth of Pacific Gas & Electric, NorthWestern and Duke Energy is pegged at 2.50%, 3.10% and 4.70%, respectively.
Pacific Gas & Electric, NorthWestern and Duke Energy have trailing four-quarter positive earnings surprise of 7.35%, 7.62% and 6.53%, on average, respectively.
Just Released: Zacks’ 7 Best Stocks for Today
Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.5% per year.
These 7 were selected because of their superior potential for immediate breakout.
See these time-sensitive tickers now >>