Annual Report on Business Diversity · hotels, airlines, rental cars, airport charges, taxi/limo,...

2016

Ameren Illinois Company 6 Executive Drive Collinsville, IL 62234

Richard Mark, Chairman & PresidentAmeren Illinois Company

Prepared by: Byron Witherspoon, PMP (Director, Supplier Diversity)

Annual Report on Business Diversityfor Illinois Commerce Commission

Diverse Business, Veteran Business, and Small Business Annual Report Year Ending December 31, 2016© 2017 Ameren Services

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TABLE OF CONTENTS

I. PRESIDENT’S MESSAGE

II. AMEREN ILLINOIS BUSINESS DIVERSITY AT-A-GLANCE

III. TERMS AND DEFINITIONS

IV. SUMMARY OF WOMEN-OWNED, MINORITY-OWNED, VETERAN-OWNED, AND SMALL BUSINESS ENTERPRISE GOALS AND SPENDING IN 2016

V. POLICIES AND METHODOLOGY

VI. SUPPLIER DIVERSITY GOALS

VII. AREAS OF PROCUREMENT

VIII. CHALLENGES FINDING QUALITY VENDORS

IX. CERTIFICATIONS ACCEPTED

X. POINT OF CONTACT

XI. SUCCESS STORIES

XII. ILLINOIS COMMERCE COMMISSION WEBSITE

APPENDIX A: 2016 INDEPENDENT ECONOMIC IMPACT STUDY OF AMEREN ILLINOIS DIVERSE SPENDING

APPENDIX B: ORGANIZATION PARTICIPATION

APPENDIX C: ORGANIZATION CHART

APPENDIX D: EXPENDITURES BY PRODUCT/SERVICE CATEGORY


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I. PRESIDENT’S MESSAGE

As Ameren Illinois, we are focused on powering the quality of life throughout our 44,000-square-mile Illinois service territory. Providing diverse-owned companies greater opportunities to do business with Ameren Illinois is a critical component of our business and economic development strategy. We believe diverse business participation is a catalyst to our economic success because diverse suppliers are key drivers of economic growth, job creation, and the financial well-being of our communities, our state and our region. As we provided in last year’s report, we have included an economic impact study to illustrate the magnitude of

Ameren Illinois’ diverse business spending within our service territory and our state. Key highlights of the study show that our $149 million in diverse spending in 2016 had a total ripple effect of $458 million for our state and supported 1,570 jobs in our communities.

Our commitments to diverse businesses include awarding business development scholarships for incumbent diverse business owners to attend the Minority Business Executive Program on the campus of Dartmouth College in Hanover, NH. Since 2009, we have awarded ten scholarships to diverse businesses located in Illinois. We believe these scholarships position our diverse businesses to grow and have sustainable partnerships with Ameren Illinois.

While we remain committed to providing access and opportunity to all qualified diverse business enterprises, our focus is on supporting and growing qualified diverse businesses located in our region and state so long-term economic benefits reside in Illinois.

As the chairman and president of Ameren Illinois Company, I’m personally invested in increasing opportunities for diverse-owned businesses and I continue to challenge my business line leadership, supplier diversity team and the supply chain to be active and engaged in providing opportunities.

Ameren Illinois has a special connection to the communities we serve. We believe creating a culture where diverse-owned businesses can flourish enhances our region, our state and helps power the quality of life.

Richard J. Mark,

Chairman & President, Ameren Illinois Company

$149M

$149,436,000 Total Diverse Spend

WBE Spend: $85.4 Million

MBE Spend: $44.6 Million

VBE Spend: $19.4 Million

GEOGRAPHIC IMPACT

10

= $47.5M

Engineering & Architectural

ServicesFinance

Information Technology

Professional Services

Environmental

Legal

DIVERSE PERFORMANCE IN KEY PROFESSIONAL SERVICES CATEGORIES

$149M

$458.6M

AFFECTS

In Total Economic Output

*Bond offerings co-managed by four diverse investment banking companies

Dartmouth Scholarships Awarded Since 2009

2016 Spend With 10 Dartmouth Suppliers

6MBEs Awarded

4WBEs Awarded

ECONOMIC IMPACT

SUPPLIER DEVELOPMENT

$390M* $7.3M $4.75M $3.3M $1.17M $200K

Jobs Supported by People of Different Ethnicities1,570

485 Diverse Businesses in IL

$81.72M in Spend

Watch one of our diverse suppliers talk about their experience

$86M State Household Earnings (See Economic Impact Study Appendix A)

II. AMEREN ILLINOIS BUSINESS DIVERSITY AT-A-GLANCE

https://youtu.be/YFjDvjDOXps


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III. TERMS AND DEFINITIONS

Product/Service Description

Advertising Servicespromotional, news, publicity

Chemicals, Lubricants and Gasesspecialty gases, bulk gases, grease, demineralized water chemicals, transformer oil

Construction and Building Materialssand, gravel, rock, steel shapes, bar stock, steel fabrication, scrap, lumber, bricks and tiles, sewer pipes and tiles, ebony, asbestos, transite, marble and masonite, plumbing fixtures and supplies, fire clay

Control and Instrumentation pressure gauges, flow meters, SCADA, DCS, strip chart recorders, CEMs

Customer-Facing Servicescall center, billing, factoring A/R, locating, energy efficiency programs, credit and collections

Energy Delivery Gas Materialsgas-specific pipes, valves, and fittings, risers, regulators, anodes

Energy Delivery Maintenance and Construction Services Distribution

overhead distribution line and substation construction and maintenance, concrete and asphalt repair and restoration, relay testing and engineering, pole inspections and repairs, pole and tower painting, equipment rentals, traffic control services, and crane services for overhead Energy Delivery distribution work less than 100kV

Energy Delivery Maintenance and Construction Services Transmission

directional boring, line construction, transmission substation work, pole inspection, pole painting, rock drilling, tower painting, relay testing, electrical testing, inspection and restoration, etc. for overhead Energy Delivery work greater than 100kV

Energy Delivery Maintenance and Construction Services Underground

hydro-excavation, underground locating, directional boring and trenching, duct banks, underground substation work, and rock drilling for underground Energy Delivery work

Energy Delivery Underground Materials conduit, vaults, precast concrete structures, junction boxes, lead shields and sleeves, pedestals, manholes, frames, bends, spacers, coilable duct, cover, grates

Electrical Components and Supplieslow-voltage switches, light fixtures, connectors, control cable, stationary batteries, UPS systems, panel fabrication

Engineering and Architectural Servicescivil, electrical, mechanical, chemical

Environmental Serviceshazardous waste, clean-up, remediation, industrial hygiene testing

Facilities Maintenance and Construction Services

fencing, buildings, painting, new construction, roofing, concrete, asphalt, pavement replacement, excavation/grading, electrical work and construction, crane services for construction, demo and/or demo clean-up (excludes remediation), rental equipment

A.) Definitions of Supply Chain Procurement Categories


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Facilities Management janitorial, maintenance, pest control, trash service, catering/food service, meetings, snow removal, office furniture, decorating, picture framing, landscaping, HVAC, plumbing, rental equipment

Fasteners and Hardwarescrews, nuts, bolts, washers, nails, abrasives, glass, buckets, cans, funnels, kettles, measures, pans, oilers, spouts, plugs, plates, studs

Filtersoil, air, gas, oil processing, automotive, gasoline, miscellaneous

Fleet Materialstrucks, earth movers, rail, tires, parts

Fleet Services engine repair, auto body, towing, general vehicle maintenance

Fuelcoal, electric, nuclear fuel, natural gas, liquids, diesel, kerosene, derivatives and associated transportation

Gas Services new construction, maintenance, trenching, gas well work, snubbing

General Maintenance and Construction Servicesnew construction, maintenance, industrial cleaning, scaffolding, fencing

Human Resource Servicesmedical services, drug testing, benefits, life insurance, medical insurance

Insuranceinsurance of property, liability, D&O, fiduciary

IT Materials desktops, laptops, servers, LAN/WAN equipment, routers, software

IT Services IT consulting, programming, network design, implementation services

Materials to Support Power Plant Maintenance, Repair and Operations

small industrial electrical components, fuses, cleaning supplies, welding supplies, hoisting equipment, electrical appliances

Meter Services contract meter reading

Office Supplies office supplies and equipment, including: copiers, faxes, A/V equipment, packing supplies, photographic equipment, photographic supplies, printed materials, printing services, labels, decals, and tags

Othercategory/description not elsewhere classified

Pole Line Hardware and Accessories anchors, arrestors, brackets, connectors, cutouts, insulators, guy wire, pedestals, transformer pads, fuse links

Poles and Towerswood, towers, and crossarms

Professional Services expert testimony, management consulting, tax and auditing services, training, payroll services

Real Estatebrokers’ fees, title insurance, easements, ROW, appraisal services


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Safety

first aid, goggles, glasses, fire extinguishers, fall protection, personal protective equipment, uniforms, electrostatic gloves, hot wire cutters, respirators, respirator cartridges, safety line hoses, basket liners, lineman sleeves, hotline sticks, lift poles, insulated hoods, traffic cones, barriers, ice melt

Staff Augmentation temporary labor: clerical, technical and general

Street Lightingsteel, fiberglass and concrete poles; luminaires; photo cells; street light brackets

Substation Materials air break switches, steel structures, power control cable, relays, remote terminal units (RTU), insulators, switchgear, breakers, circuit breakers, re-closures, capacitors

Surveyingsurveying (aerial and land), gas surveying, mapping, soil boring/testing, concrete testing, other site-testing services

Telecom Materialstelecom equipment, phone accessories, switches, optical cables, batteries, antennae, connector plugs, coaxial, printable tape

Telecom Serviceswireless, radio, local, and long distance voice and data services; communication tower maintenance

Toolssaws, wire cutters, wrenches, screwdrivers, hammers, drills, drill bits, ladders, chainsaws, trimmers, mowers, leaf blowers, rope, rigging, lifting accessories

Transformers distribution and power transformers, transformer services, network protectors, network protectors key components

Transportationbus, helicopter, truckload and less than truckload freight; small package, air express, air cargo, courier

Travelhotels, airlines, rental cars, airport charges, taxi/limo, aircraft maintenance, travel agents

Vegetation Management power line tree-trimming, substation mowing, bare ground weed control

Wire and Cableprimary and secondary cable, bare conductors


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Key Terms and Definitions

AABEAmerican Association of Blacks in Energy

B&CSAmeren Business & Corporate Services segment responsible for opportunities in HR, Finance, Building Services, IT, Communications, etc.

CDTContract Development Team responsible for the implementation and execution of RFPs

CMSDCChicago Minority Supplier Development Council

CorporationThe investor-owned utility whose Illinois company operations are regulated by the ICC

EEIEdison Electric Institute

Excluded ExpendituresPayments made for goods and services that are excluded from the calculations used in reporting diverse and total expenditures

ExpendituresThe actual accounts payable dollars (spend) paid for the procurement of goods and services during a given reporting period

ILBCCIllinois Black Chamber of Commerce

Long-term goalPerformance criteria established 3–5 years beyond the current reporting period

M/W/V/SBE ExpendituresThe actual accounts payable dollars paid for the procurement of goods and services from third parties (M/W/V/SBEs) secured by the Corporation, either directly or through subcontracting

Minority Business Enterprise (MBE)

A business enterprise that is at least 51% owned by a minority individual or group; or if a publicly owned business, at least 51% of the stock of which is owned by one or more minority groups; and whose management and daily business operations are controlled by one or more individuals

NMSDCNational Minority Supplier Development Council

Prime Contractor A supplier that invoices the Corporation directly for goods and services rendered

RFI, RFQ, RFPSolicit requests for information, quotes, and proposals

SLMBCSt. Louis Minority Business Council

Small Business Enterprise (SBE)

A business enterprise that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding 12 months or on sales volume averaged over a three-year period

B.) Key Terms and Definitions


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SubcontractA contract between a party to an original contract and a third to provide all or a specific part of the goods or services required in the original contract

Subcontractor A supplier with a subcontract with the Prime Contractor who invoices the Prime Contractor for services rendered

Supplier Diversity GoalsEstablish annual corporate and business segment supplier diversity utilization goals

Tier II Initiative

Process in which prime suppliers are expected to share in the supplier diversity goals of the Corporation by providing meaningful subcontracting opportunities to diverse suppliers in support of its contractual obligations to the Corporation

Veteran Business Enterprise (VBE)

A business enterprise that is at least 51% owned by one or more veterans, including service-disabled veterans. In the case of a publicly owned business, at least 51% of the stock is owned by one or more veteran and/or service-disabled veterans; and whose management and daily business operations are controlled by one or more individuals

WBDCWomen’s Business Development Center

WBENCWomen’s Business Enterprise National Council

Women Business Enterprise (WBE)

A business enterprise that is at least 51% owned by a woman or women; or if a publicly owned business, at least 51% of the stock of which is owned by one or more women; and whose management and daily business operations are controlled by one or more of such individuals


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Schedule of Exclusions from Expenditures Reported

Board of Directors

Civic

Confidential

Contributions

Corporation (Intra-Entity Payments)

Customer Accounts

Employee – Other Payments

Facilities Site Utilities

Fuel works supplier

Fuel/Coal/Interchange

Government and Regulatory

Municipality/Utility

Nuclear Fuel

Rail Leasing

Rail Maintenance

Railroad

Real Estate

Telecom Services

C.) Schedule of Exclusions from Expenditures Reported


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TABLE 1: AMEREN COMPANIES M/W/V/SBE EXPENDITURES AND VENDOR UTILIZATION

*Note: Actual and Goal percentages reflected do not include small businesses.

(in thousands)

IV. SUMMARY OF WOMEN-OWNED, MINORITY-OWNED, VETERAN-OWNED, AND SMALL BUSINESS ENTERPRISE

GOALS AND SPENDING IN CALENDAR YEAR 2016

Ameren Corporation with All Suppliers

% OF OVERALL

SPEND CATEGORY TOTAL ACTUAL* GOAL*

Overall $2,351,000 13.4% 12.9%

DIRECT TIER II TOTAL ACTUAL GOAL

MBE $72,508 $33,863 $106,371 4.5%

WBE $138,724 $29,720 $168,444 7.2%

VBE $21,599 $19,473 $41,072 1.7%

Total M/W/VBE $232,831 $83,056 $315,887 13.4% 12.9%

SBE $454,746 $ – $454,746 19.3%

Total All Categories $687,577 $83,056 $770,633 32.8%


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TABLE 2: AMEREN ILLINOIS COMPANY’S M/W/V/SBE EXPENDITURES AND VENDOR UTILIZATION

*Note: Actual and Goal percentages reflected do not include small businesses.

(in thousands)

Ameren Illinois with All Suppliers

% OF OVERALL

SPEND CATEGORY TOTAL ACTUAL* GOAL*

Overall $974,652 15.3% 13.2%


MBE $31,316 $13,288 $44,604 4.6%

WBE $67,769 $17,648 $85,417 8.8%

VBE $10,926 $8,489 $19,415 2%

Total M/W/VBE $110,011 $39,425 $149,436 15.3% 13.2%

SBE $168,714 $ – $168,714 17.3%

Total All Categories $278,725 $39,425 $318,150 32.6%

BREAKOUT OF MINORITY SPENDING BY GENDER

(in thousands)

Ameren Illinois Spend with Minority Men and Women

CATEGORY DIRECT TIER II TOTAL $ TOTAL %

Men Women Men Women Men Women Men Women

Asian Pacific American $6,600 $0 $200 $200 $6,800 $200 18% 3%

African American $14,400 $1,700 $6,800 $2,200 $21,200 $3,900 57% 55%

Hispanic American $7,800 $600 $1,300 $2,200 $9,100 $2,800 24% 39%

Native American $200 $0 $200 $200 $400 $200 1% 3%

Total Minority $29,000 $2,300 $8,500 $4.8 $37,500 $7,100 100% 100%


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Furthermore, to enrich Ameren Illinois’ diverse spending beyond percentages and diverse dollars, Ameren engaged Development Strategies once again to conduct an Economic Impact study on 2016 Ameren Illinois diverse spending. The purpose of the Economic Impact study is for increased public perspective to better interpret the magnitude of diverse spending within Ameren Illinois’ service territory. (See Appendix A for full Economic Impact report.)

The study demonstrates the ripple effects enjoyed by the state from Ameren Illinois’ diverse business spending in three primary ways:

1. Output: Total dollar change in the Illinois economy due to diverse spending from Ameren Illinois’ operations

2. Household Earnings: Total dollar change in earnings of households in Illinois due to diverse spending by Ameren Illinois

3. Jobs: Total change in number of jobs held by Illinois residents

While Table 2 represents the 2016 snapshot of Ameren Illinois’ diverse spending, Figure 1 below illustrates the three-year historical performance of Ameren Illinois’ diverse spending by diverse classification.

Figure 1: Three-Year Diverse Dollars by Category

AMEREN ILLINOIS’ DIVERSE SPENDING IN

MIL

LIO

NS

$0

$20

$40

$60

$80

$100

2014 2015 2016

MBE WBEVBE

$85$81$80

$36

$11

$49

$30

$45

$19


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TABLE 3: ECONOMIC IMPACTS OF AMEREN ILLINOIS’ DIVERSE SUPPLIER SPENDING ON ITS ILLINOIS SERVICE

TERRITORY, 2016

Output: Total dollar change in the Illinois service territory’s economy due to expenditures for Ameren Illinois’ operations.

Earnings: Total dollar change in earnings of households in the Illinois service territory due to expenditures for Ameren Illinois.

Employment: Total change in the number of jobs held by Illinois service territory residents per $1 million of direct spending for Ameren Illinois’ operations (adjusted to 2016 dollars).1 Assumes that 60 percent of total diverse supplier spending is to support capital projects based on the distribution of non-labor capital and operations and maintenance spending for Ameren Illinois in 2016.

2 Includes direct and Tier II diverse supplier spending.3 Only includes indirect earnings and jobs since this study only considers direct non-labor contractor spending by

Ameren Illinois.

Non-Labor Capital Expenditures1

Non-Labor Operational

Expenditures

Total Diverse Supplier Spending2

Direct Spending $89,656,000 $59,770,000 $149,426,000

Multipliers (see explanatory notes on next page)

Output 1.855 1.514 1.737

Earnings 0.600 0.288 0.475

Employment 11.370 4.131 8.471

Added Economic Impact on Service Territory

Output $169,037,000 $90,468,000 $259,505,000

Earnings $53,767,000 $17,202,000 $70,969,000

Indirect Jobs Held by Service Territory Residents 1,010 240 1,250

Total Economic Impact on Service Area

Output $408,931,000

Earnings3 $70,969,000

Total Indirect Jobs Held by Service Territory Residents3 1,250


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*Note: Only the top 10 products and services are listed.

TABLES 4–6: AMEREN ILLINOIS M/W/VBE SPEND BY PRODUCT/SERVICE CATEGORY

(in thousands)

Minority Business Enterprises (MBE)

CATEGORY African American Hispanic American Asian American Native American TOTAL

1. Substation Materials $14 $487 $5,356 $5,857

2. Staff Augmentation $5,711 $5,711

3. Energy Delivery Maintenance and Construction Services Distribution

$8,455 $580 $9,035

4. IT Materials $4,553 $254 $1 $4,808

5. Engineering and Architectural Services $2,188 $171 $2,359

6. IT Services $1,864 $86 $1,950

7. Facilities Management $619 $524 $510 $47 $1,700

8. Environmental Services $1,483 $32 $1,515

9. Street Lighting $538 $538

10. Energy Delivery Maintenance and Construction Services Transmission

$509 $509

Total Top 10 MBE Spend $20,223 $7,674 $6,038 $47 $33,982


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Women Business Enterprises (WBE)

PRODUCT/SERVICE

Energy Delivery Maintenance and Construction Services Distribution $42,338

Meter Services $11,433

Vegetation Management Services $3,473

Gas Services $3,213

Transportation $2,662

Facilities Management $2,511

Engineering and Architectural Services $2,501

Energy Delivery Maintenance and Construction Services Underground $2,373

Safety $2,008

Poles $1,554

Total Top 10 WBE Spend $74,066

Veteran Business Enterprises (VBE)

PRODUCT/SERVICE


Fleet Materials $3,457

Vegetation Management Services $3,033

Fleet Services $1,108

Tools $1,077

Construction and Building Materials $812

Facilities Maintenance and Construction Services $811

Transportation $612

Substation Materials $494

Real Estate $457

Total Top 10 VBE Spend $15,824


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TABLE 7: AMEREN ILLINOIS COMPANY M/W/V/SBE EXPENDITURES AND VENDOR UTILIZATION

WITH ILLINOIS-BASED SUPPLIERS

*Note: Actual percentage reflected does not include small businesses.

(in thousands)

Ameren Illinois Company with Illinois-Based Suppliers

% OF OVERALL

SPEND CATEGORY TOTAL ACTUAL* GOAL

Overall $338,088 24.2% —


MBE $8,681 $6,960 $15,641 4.6% —

WBE $48,355 $8,446 $56,801 16.8% —

VBE $5,430 $3,857 $9,277 2.7% —

Total M/W/VBE $62,466 $19,263 $81,719 24.2% —

SBE $57,735 $ - $57,735 17.1% —

Total All Categories $120,191 $19,263 $139,454 41.2% —


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TABLES 8–10: M/W/VBE SPEND BY PRODUCT/SERVICE CATEGORY

(in thousands)

Illinois-Based Minority Business Enterprises (MBE)

CATEGORY African American Hispanic American Asian American Native American TOTAL

Energy Delivery Maintenance and Construction Services Distribution

$3,312 $147 $3,459

Facilities Management $270 $476 $337 $47 $1,130

Environmental Services $509 $533 $1,042

Substation Materials $484 $484

Other $181 $118 $8 $5 $312

Engineering and Architectural Services $1,917 $171 $2,088

Professional Services $83 $37 $120

General Maintenance and Construction Services $26 $26

Meter Services $7 $7

Energy Delivery Underground Materials $4 $4

Total Top 10 MBE Spend $6,189 $1,852 $553 $78 $8,672

*Note: Only the top 10 Tier I products and services are listed.


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Illinois-Based Women’s Business Enterprises (WBE)

PRODUCT/SERVICE


Meter Services $7,954

Energy Delivery Maintenance and Construction Services Underground $2,356

Engineering and Architectural Services $1,717

Vegetation Management $1,294

Facilities Management $908

Transportation $442

Other $294

Real Estate $187

Advertising Services $133

Total Top 10 WBE Spend $47,045

Illinois-Based Veteran Business Enterprises (VBE)

PRODUCT/SERVICE

Fleet Materials $2,474

Vegetation Management $938

Tools $933

Facilities Maintenance and Construction Services $371

Facilities Management $239

Other $215

Real Estate $151

Energy Delivery Gas Materials $66

Materials to Support Power Plant Maintenance, Repair & Operations $19

Total Top 10 VBE Spend $5,406




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V. POLICIES AND METHODOLOGY

Purpose

The purpose of this section is to set forth the Ameren corporate policy for supplier diversity in the procurement of non-fuel materials, services and asset leases.

Scope

A. This policy applies to all Ameren companies, which include:

1. Ameren Illinois 2. Ameren Missouri 3. Ameren Transmission

B. Employee travel and entertainment expenses are not included in this policy.

C. This policy supersedes all previous Supplier Diversity policies.

Definitions

Third-party certifying organizations recognized by Ameren:

A. Ameren does not certify diverse suppliers and relies upon third-party certifying organizations.

B. Ameren recognizes certification from the National Minority Supplier Development Council (NMSDC) and its affiliate councils, the Women’s Business Enterprise National Council (WBENC) and its affiliate councils, and Federal, State and Local government certifying agencies. Contact the Supplier Diversity team for more information on certifying organizations.

Supplier Diversity Organization: Works within Safety & Supply Services to support contract development teams and Business Segment personnel to identify diverse suppliers for inclusion in the sourcing and procurement processes.

Contract Development Team: Members may include the Project Manager, Plant/Facility Manager, and representative from Sourcing, Procurement, and Corporate Legal. Corporate Legal coordinates input from Credit; Tax, Finance/Accounting; Health, Safety, and Environmental; Risk Management; and other applicable departments.


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Responsibilities

Supplier Diversity Organization

A. Sourcing for Diverse Suppliers:

1. Organize and administer diverse supplier sourcing strategies, to include:

• Participating as a member of contract development teams.

• Identifying qualified diverse suppliers to include in procurement projects.

• Providing insight into market and industry availability of diverse suppliers for specific commodities and services.

• Sharing expectations and requirements with prospective diverse suppliers as they relate to procurement opportunities.

• Sharing supplier information with the Contract Development Team for the project and developing Tier II subcontracting opportunities.

• Debriefing suppliers and providing feedback after contract award or non-award.

B. Build Awareness within Ameren:

1. Developing and communicating Supplier Diversity goals and policy.

2. Continuing engagement of Supply Services Groups and Business Segments.

3. Integrating Supplier Diversity into all procurement strategies.

4. Measuring, tracking and reporting progress monthly and quarterly to all levels within the organization.

5. Providing support, data and analysis to other Ameren departments as required.


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C. Community and Industry Awareness and Interaction:

1. Representing Ameren with community organizations, events and initiatives relating to supplier diversity in the Ameren service territory and nationally as required (e.g., minority/women business councils, chambers of commerce).

2. Supporting requirements set forth by government (local, state, federal) and utility service commissions as required.

3. Supporting supplier diversity efforts of utility-related industry groups.

D. Develop Competency and Capacity for program growth:

1. Integrating Supplier Diversity into procurement strategies.

2. Building a Tier II initiative.

3. Establishing a formal mentoring program for existing suppliers when deemed necessary and/or advisable.

E. Create a Sustainable Process:

1. Building on successful diverse supplier relationships to grow long-term, sustainable spend opportunities.

2. Providing Supplier Diversity training for Supply Services and Business Segments.

3. Monitoring compliance of Supplier Diversity language in contracts and ensuring contracts are updated.

4. Leading Supplier Diversity symposiums and summits.

5. Administering recognition programs for outstanding Business Segments, Buyers and Corporate Partners.

Business Segments

A. Build Awareness within Ameren:

1. Communicating business segment leadership message supporting and illustrating the importance of supplier diversity.

2. Identifying and utilizing Business Segment Champions.

3. Including Supplier Diversity in upcoming procurement projects.

B. Develop Competency and Capacity for Program Growth:

1. Meeting with prospective diverse suppliers for future procurement opportunities.

2. Evaluating progress relative to goals.

3. Maintaining level of awareness.

C. Create a Sustainable Process:

1. Identifying opportunities for expanding the scope of work with successful diverse suppliers.

2. Attending and participating in training classes, seminars, etc.

3. Maintaining level of awareness regarding most recent Supplier Diversity requirements/language.

4. Participating in and attending Supplier Diversity events.

5. Participating in recognition programs.

Sourcing and Supply Chain Operations

A. Build Awareness within Ameren:

1. Communicating leadership message supporting and illustrating the importance of Supplier Diversity.

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2. Develop Competency and Capacity for program growth.

3. Incorporating Supplier Diversity into Sourcing and general procurement process.

4. Ensuring Supplier Diversity is included in events and meetings with Business Segment partners.

5. Meeting with identified prospective diverse suppliers for future procurement opportunities.

6. Maintaining level of awareness.

7. Evaluating progress relative to goals.

B. Create a Sustainable Process:

1. Identifying opportunities for expanding the scope of work with successful diverse suppliers.

2. Attending and participating in training.

3. Ensuring contracts contain the most recent Supplier Diversity requirements/language.

4. Participating in and attending Supplier Diversity events.

5. Participating in recognition program.

Policy Requirements

A. Supplier Diversity follows the same policy requirements outlined in the Procurement Policy.

B. Notwithstanding anything contained in this Policy or in the Procurement Policy to the contrary, the Corporation shall at all times comply with any and all applicable federal, state, and local laws and regulations to the extent such apply in any given situation.

Deviations

Deviations from this policy must be approved, in writing, by the Vice President, Safety & Supply Services/Chief Procurement Officer in advance of commitments to suppliers or other non-Ameren entities.


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VI. SUPPLIER DIVERSITY GOALS AND STRATEGIES

ACCESS, DEVELOPMENT and SUSTAINABILITY are the core principles of Ameren’s Supplier Diversity Development process.

Ameren’s Supplier Diversity Organization employs specific goals with comprehensive internal and external strategies to nurture and increase qualified diverse supplier participation within the supply chain. We believe this will lead to long-term partnerships.

These strategies include:

A. Establishing and Supporting Corporate Supplier Diversity Goals:

1. Engage the Ameren Corporate Supplier Diversity Leadership Council (CSDLC), which provides oversight for the Supplier Diversity Development process to ensure continued alignment, stakeholder engagement and accountability regarding Supplier Diversity initiatives. The CSDLC members are senior-level leaders from across the business segments who generally meet quarterly.

2. Establish Business Segment goals and scorecard to support the corporate goal.

3. Formalized multi-tiered supplier program.

4. “Alpha Opportunities” initiative, which provides targeted diverse suppliers an opportunity to gain experience with Ameren at spend levels generally less than or equal to $100,000.

B. Creating Access and Development Opportunities:

1. Conduct Business Segment quarterly engagement meetings.

2. Introduce diverse suppliers within each business segment to perform vendor presentations.

3. Prime/Diverse Supplier matchmakers.

4. Prime Supplier conferences/Tier II progress reporting.

5. Supplier Diversity Symposiums/Summits.

C. Driving Long-Term Sustainability:

1. Dartmouth Scholarship Awards for diverse suppliers.

2. Focused growth initiative.

3. Participation in Diverse Supplier Organizations.


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Key Diverse Business Strategies

A. Ameren Illinois Diverse Business Steering Committee: This committee consists of Illinois Operations director-level leadership and Supplier Diversity. The committee ensures that major sourcing decisions impacting Illinois receive appropriate business diversity and economic impact considerations. (See Appendix C for members.)

B. Diverse Business Development: Ameren’s Diverse Business Development team’s purpose is to increase the opportunities and utilization of a targeted group of incumbent Ameren diverse businesses who are qualified, ready, willing and able to perform more work across the Ameren system. These businesses will be strategic to Ameren achieving its annual diverse business goals.

Diverse Business Development will help Ameren leverage the full breadth of capabilities and experiences of these incumbent businesses by providing them more opportunities within key Ameren categories where it makes sense. These key categories generally have high overall spending and are critical to the operations of Ameren business.

Diverse Business Development will help develop a long-term sustainable base of key diverse businesses that are capable of performing work in multiple Ameren categories.

C. Diverse Business Mentoring: Diverse business mentoring is a curriculum-based initiative designed specifically to nourish and create business scale and capacity among emerging Ameren diverse businesses with specific business needs. The curriculum will include safety, project management, bidding and estimating, and getting paid.

Emerging diverse companies are matched with Ameren business leaders and prime suppliers who have the experience and expertise to assist these companies with their specific business needs. From the mentoring relationship, emerging diverse businesses can realize opportunities for continued growth and enjoy an expanded support network.

D. Diverse Business Goal-Setting: Ameren employs an integrated planning process where Sourcing/Purchasing, Supplier Diversity, and the internal business partners analyze opportunities and develop annual corporate and business segment goals for diverse business expenditures. These goals are then approved by senior management and measured, monitored, and reported throughout the year. The process, in part, requires the Ameren Supplier Diversity team to analyze the categories of spend included in the business segments’ annual budget forecast. The business segment forecast indicates total ‘sourceable’ spending which includes capital and O&M dollars, excluding labor.


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Within the segments’ budget forecast are project breakdowns by cost that provide insight to the Supplier Diversity team on specific opportunities in the business. The Supplier Diversity team also considers Tier II opportunities in the analysis and baseline dollars with diverse suppliers that occur as a result of year-over-year spending in the business (e.g., safety products, MRO, etc.).

The Supplier Diversity team analyzes these factors for spending to identify opportunity-rich categories for increased diverse supplier participation before establishing a dollar and percentage goal for the business.

Once the diverse spend goals are established, they are formally communicated to the CSDLC and throughout Ameren by the Supplier Diversity Organization and the business partner stakeholders. Supplier Diversity goals are included as key performance indicators (KPI) on business segment scorecards.

Goals are adjusted directionally on an annual basis to account for opportunities added or ending.

MBE-specific goals are created as targets based, in part, on:

1. Location of the opportunity

2. Availability of suppliers for the opportunity

E. Business Partner Engagement Meetings: Ameren’s Supplier Diversity organization conducts regular business partner engagement meetings to introduce diverse suppliers and provide opportunities to conduct supplier presentations. This process provides new and incumbent diverse suppliers direct access to the business stakeholders and promotes diverse supplier/business partner relationships.

The business partner meetings also provide the Supplier Diversity Executives the forum to discuss categories for diverse supplier participation, business partner diverse spending profile, and analysis on how the business segments are achieving their Supplier Diversity goals.

F. Formalized Multi-Tier Initiative: Ameren requires prime suppliers to share in our commitment to providing opportunities for diverse suppliers. Ameren’s Tier II initiative requires our prime suppliers to deliver a diverse business utilization plan when competing for Ameren work. The plan identifies the level of expenditures with diverse suppliers who are participating as subcontractors/consultants on Ameren contracts. Prime suppliers are required to report Tier II diverse spend monthly.

Ameren’s Tier II initiative also facilitates custom engagements with our key prime suppliers/contractors to actively manage and strengthen our prime/diverse supplier relationships. The Ameren Supplier Diversity executives lead individualized


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conferences with our business segment stakeholders and our key prime supplier/contractors uniquely designed to:

1. Report out Tier II past performance.

2. Discuss opportunities for increased participation.

3. Reset Tier II expectations.

4. Promote the goods and services of diverse suppliers who are capable of doing business with the prime.

To facilitate overall participation in Ameren’s Tier II initiative across the Ameren system, Supplier Diversity hosts matchmaker events with Ameren prime suppliers and diverse companies to encourage prime/diverse partnerships.

In the event a prime supplier does not meet established goals and/or demonstrate through the quality, intensity, and appropriateness of their efforts why the goal was not met, Ameren corrective actions include removing the prime supplier from future bid opportunities.

G. Alpha Opportunities Initiative: Provides emerging diverse suppliers to Ameren an opportunity to gain experience in bids generally less than or equal to $100,000. The goal is to create a pipeline for emerging diverse suppliers to experience success, create a track record and incrementally grow their businesses to larger spend opportunities. The Alpha Opportunities program will help facilitate sustainable diverse supplier partnerships with Ameren.

H. Supplier Diversity Symposiums and Summits: Ameren’s signature events are its Supplier Diversity symposiums and summits. Ameren hosts Supplier Diversity symposiums and summits to increase the level of diverse supplier participation. These events bring diverse suppliers to a venue that provides access to senior leadership, business partners, prime suppliers, and Sourcing/Purchasing. In addition, workshops are available to educate suppliers on upcoming opportunities.

I. Dartmouth Tuck Scholarship Awards: Annually, Supplier Diversity awards scholarships to the Tuck Minority Executive Business Education series at Dartmouth College in Hanover, New Hampshire. These scholarships are awarded to incumbent diverse suppliers to promote their growth, development, and sustainability in our network.

Ameren Corporation has awarded 16 scholarships to incumbent diverse suppliers since 2009. In 2016, Ameren awarded two scholarships, to Illinois-based Kadilex Construction and Missouri-based Brandt Contracting.


2929

“ Every class was an eye-opening experience. The shared stories and experiences from everyone there left me with ideas to apply to my own situations when certain things come up.

“ I would like to thank Ameren for caring enough to take an interest in my business and helping Brandt Contracting grow capacity. I understand things are not always easy in business but thanks to Ameren, I have been able to listen and share experiences with other small and minority business owners that I would otherwise not have been able to experience. I really appreciate what Ameren is doing for my company and look forward to growing as a supplier to Ameren.”

— Sedrick Brandt President, Brandt Contracting

“Ameren has invested in my business and invested in my professional growth. They have provided opportunities for me that would otherwise have not been available, such as Tuck Business School. I am also involved in a mentoring program at Ameren which will expand my network with prime contractors.

“I would just like to thank Ameren for the opportunities they have provided for me and Kadilex Construction. We appreciate the investment that has been made and continues to be made into our company.”

— Karl Jefferson Jr. President, Kadilex Construction, Inc.

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Participation in Diverse Supplier Organizations

Ameren actively participates in a number of external organizations that support and promote capabilities of diverse suppliers. Supplier Diversity personnel and other co-workers actively participate in certification committees, business expos, and other activities to alert and advise both diverse and non-diverse suppliers of Ameren’s diverse supplier opportunities and expectations.

Ameren also subscribes to a “Supplier Locator” national database that assists the supplier diversity executives in identifying certified diverse suppliers by business category.

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VII. AREAS OF PROCUREMENT

A. Key categories for procurement in 2017 include:

1. Energy Delivery Maintenance and Construction Services Distribution

2. Engineering Services

3. Facilities Building Construction

4. Facilities Maintenance

5. Gas Construction and Services

6. Transmission Line Construction and related activity

7. Vegetation Management

8. Tier II contract opportunities

B. Finance

1. In 2016, Ameren worked with four boutique diverse investment banking companies that co-managed $390 million in bond offerings.

Classifications of these firms include:

• Two minority-owned investment banking firms

• One women-owned investment banking firm

• One service-disabled veteran-owned investment banking firm

2. Ameren also participated in two Corporate Finance Diverse Business Roundtables to discuss opportunities in treasury and network with diverse investment banking companies.


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C. Legal

Ameren provided opportunities for 2 diverse law firms to work on Ameren matters. In 2016, we on-boarded a minority-owned law firm and continued utilization with a woman-owned law firm.

Ameren Corporation also recognized Armstrong Teasdale with its 2016 Best in Class Diversity and Inclusion Award for the firm’s outstanding performance in the area of diversity and inclusion on Ameren matters and for implementing diversity best practices within its supply chain. Armstrong Teasdale was one of 12 law firms serving Ameren that submitted applications for the award.

Ameren will continue to expand its legal portfolio to include more opportunities for diverse law firms.

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As the business of diversity processes continues to evolve, there is an increasing interest among our business partner stakeholders in the diverse composition of a company’s workforce and the economic impact of business diversity within the utility service territory. A growing concern among business partner stakeholders is that the race for higher diverse business spending unnecessarily discounts the regional economic impact realized when diverse businesses located in the service territory/state are awarded work. To address this concern, business diversity practitioners have to thoughtfully balance an apparent public influence that leans toward identifying opportunities to accelerate diverse business spending regardless of regional economic impact with measured consideration for local economic impact. The latter approach may not boost diverse spending percentages at a pace desired because the current scale of local/regional diverse businesses does not generally meet the scale necessary to impact significant diverse business spending within critical utility categories in an exponential way.

The benefits in an approach that prefers regional/state diverse business-focused opportunities are:

• Maintaining a local/regional workforce

• Supporting local/regional communities

• Growing market share in key utility categories over time

Further, the unique nature of the Ameren Illinois infrastructure in critical categories where the utility is investing approximately 80 percent of its dollars creates dynamics that could diminish the success of diverse businesses without a long-term strategy.

These dynamics include:

• Highly mature markets

• Low growth

• Low industry margins

• Technical expertise

• Safety

The effects of these dynamics discourage business participation within these categories regardless of diversity status. Moreover, the availability of diverse suppliers that

VIII. CHALLENGES FINDING QUALITY VENDORS


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currently exist in these categories and can significantly impact increased spending is limited to a few local/regional diverse companies. If any of these diverse companies is involved in a merger and/or acquisition with non-diverse ownership, exits the industry or succumbs to other market dynamics, then that diverse spending is subsequently retired from the utility’s diverse spend profile. For example, in 2016 Ameren Illinois lost $4 million in diverse spend when Apex, a diverse-owned business, was acquired.

In addition, other industries in the region with similar program expectations create diverse participation demands in the market that strain the resources and capacity of diverse suppliers. These dynamics also challenge the utility because multiple industries compete for diverse participation from the same pool of qualified diverse suppliers, which weakens the success any one industry could enjoy.

As diverse business practitioners adjust to try to satisfy seemingly divergent objectives and other market dynamics that could diminish diverse participation in key categories, at risk is a flattening and/or decreasing of diverse spending percentages in the short term while the utilities execute on long-term strategy to grow and develop firms.

In either case, the right strategy will require skillful techniques, intricate understanding of market dynamics and balance in arriving at common goals and expectations. The Illinois Commerce Commission could assist in these challenges by helping to shape a narrative in Illinois that appropriately balances increased diversity spending with advocacy for the growth and development of local/regional diverse economies. The Commission could nurture an environment of confidence with its constituents that the utilities are actively engaged with executing strategies to procure goods and services from qualified diverse-owned businesses. Periodic communications to constituents that support key utility diverse business successes would establish a tone that engenders trust in the activities of the utilities to provide opportunities for qualified diverse businesses.

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X. POINT OF CONTACT

The point of contact for Ameren’s Supplier Diversity Program is:

Byron Witherspoon, PMP

Director, Supplier Diversity

[email protected]

XI. SUCCESS STORIES

While Ameren recognizes and embraces continuous improvement in our Supplier Diversity Development process, our program strategies to create ACCESS, DEVELOPMENT, and SUSTAINABLE OPPORTUNITIES have yielded successful partnerships with diverse suppliers.

IX. CERTIFICATIONS ACCEPTED

(See Section V, Policies and Methodology, Definitions part B)


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Kadilex Construction, Inc. was established in 2010 and, two years later, started working with Ameren as a subcontractor. It was then that Karl Jefferson Jr., president of Kadilex Construction, saw his business take off. Since then, he has worked on Ameren transmission line foundations projects. In 2016, Karl received a scholarship from Ameren to attend a minority business education program at Tuck School of Business at Dartmouth College in Hanover, New Hampshire, furthering his development—and success.

Ameren has been a complete blessing to our company. It’s one of the most important relationships in our business. It’s one relationship we have to keep.

— Karl Jefferson Jr. President, Kadilex Construction, Inc.

Ameren has given us the opportunity to work and to give work to others in search of a better life. That makes our workers feel better about themselves and they feel better about their community.

— William Mason Jr. President, Mason’s Landscaping & Construction Services, Inc.

William Mason Jr., president of Mason’s Landscaping & Construction Services, Inc. leads the business he began with his father in the heart of

East St. Louis, Illinois. Over the years, William developed relationships with Ameren supplier diversity executives and, with their help, the company became a certified Minority Business Enterprise (MBE). The formerly seasonal business now operates year-round, with William’s team restoring yards after Ameren crews complete repair work. The company has been able to create even more jobs

for those who may not have had other opportunities.

Ameren Supplier DiversityWhat our suppliers are saying.


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Ameren Supplier DiversityWhat our suppliers are saying.

This has been a really great match for us. We know INTREN, we have worked with them, and to be able to have them bring us along, so to speak, with the work in St. Louis has really been a tremendous opportunity for us.

— Stephanie J. Hickman President & CEO, Trice Construction Company

While taking over—and transforming—a business that has been in her family for two generations, Stephanie J. Hickman, president and CEO of Trice Construction Company, met another trailblazing woman in construction: INTREN founder and CEO Loretta Rosenmayer. They began bidding on projects together and eventually collaborated on Ameren’s multiyear project to upgrade manholes in the St. Louis area.

After a short gap in her company’s contract with Ameren, Georgina de Regil Randazzo saw an opportunity. The leader of the corporate furnishings company Facilitec began working with Ameren more than 10 years ago, and had a history of providing quality products at a fair price. So, when the chance came in 2016 to participate in a multimillion-dollar furniture contract, Georgina was able to get her foot back in the door providing office chairs and unparalleled service. Now, she is helping to modernize Ameren offices across Missouri and Illinois, and her business is poised for further growth.

Every week, it seems like we are getting different opportunities with Ameren because they like our service. You guys open a lot of doors, in my mind. You say, ‘Wait! Give them a chance.’

— Georgina de Regil Randazzo President, Facilitec Corporate Furnishings, Inc.

Your story could be the next one featured here. Learn more at Ameren.com/SupplierDiversity.


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XII. ILLINOIS COMMERCE COMMISSION WEBSITE

Pursuant to Section 5-117 of the Public Utilities Act (220 ILCS 5/5-117 Section F), Ameren Illinois Company hereby submits to the Illinois Commerce Commission its 2016 Annual Supplier Diversity Report. Reports are due annually on April 15th beginning in 2015.

The Commission shall publish the report on its website and shall maintain the report for at least five years. The Public Utilities Act also requires the ICC and participating utilities to hold an Annual Policy Meeting that is open to the public on the subject of supplier diversity. The policy meeting will follow submission of the April 15 reports. The annual policy meeting is scheduled for June 13, 2017, at the ICC offices located at 160 North LaSalle, Chicago, Illinois 60601.

For more information on Ameren Illinois’ Annual Supplier Diversity Reports, please visit the ICC Supplier Diversity webpage at http://www.icc.illinois.gov/filings/mwvs/.

https://www.icc.illinois.gov/filings/mwvs/meetings.aspx


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APPENDIX A

ECONOMIC IMPACT STUDY


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A STUDY OF AMEREN ILLINOIS SUPPLIER DIVERSITY PROGRAM’S ECONOMIC

IMPACTS ON ILLINOIS AND SERVICE TERRITORY

MARCH 16, 2017

PREPARED FOR


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Supplier Diversity Program Economic Impact Study

DEVELOPMENT STRATEGIES

Table of Contents

SUMMARY OF ECONOMIC IMPACTS ...................................................................................................................... 1

INTRODUCTION ..................................................................................................................................................... 2 AMEREN’S SUPPLIER DIVERSITY PROGRAM ............................................................................................................. 2 SCOPE OF WORK .................................................................................................................................................. 2

ECONOMIC IMPACT OVERVIEW ............................................................................................................................. 3 INTRODUCTION ..................................................................................................................................................... 3 METHODOLOGY .................................................................................................................................................... 4 GEOGRAPHIC STUDY AREA ..................................................................................................................................... 5 MULTIPLIERS ....................................................................................................................................................... 5

ECONOMIC IMPACTS OF AMEREN ILLINOIS SUPPLIER DIVERSITY - 2016 ................................................................ 7 INPUTS ................................................................................................................................................................ 7 ECONOMIC IMPACTS ............................................................................................................................................. 7

Illinois Service Territory ............................................................................................................................... 7 State of Illinois ............................................................................................................................................. 8

APPENDIX

A. 2015 ECONOMIC IMPACTS OF DIVERSE SPENDING BY SERVICE TERRITORY AND STATE

B. SUMMARY OF 2015 AND 2016 ECONOMIC IMPACTS

C. 2015 AND 2016 DIVERSE SPENDING BY ILLINOIS COUNTY


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DEVELOPMENT STRATEGIES 1

SUMMARY OF ECONOMIC IMPACTS

Ameren Illinois spent $149.4 million in 2016 on Tier One and Tier Two diverse suppliers to support its operations.

The following table summarizes the economic impacts of this spending on Ameren Illinois’ service territory and

the state of Illinois based on RIMS-II economic impact modeling methodology as established by the U.S.

Department of Commerce.

Service Territory State of IllinoisDirect Spending 149,426,000$ 149,426,000$ Indirect Output 259,505,000$ 309,222,000$ Indirect Earnings 70,969,000$ 86,231,000$ Indirect Jobs 1,250 1,570 Total Economic Output 408,931,000$ 458,648,000$

Table 1. Economic Impacts of Ameren Illinois Supplier Diversity Spending, 2016


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INTRODUCTION

AMEREN’S SUPPLIER DIVERSITY PROGRAM

Ameren Corporation (“Ameren”) is a Fortune 500 company headquartered in St. Louis, Missouri with approxi-

mately 2.4 million electric customers and 900,000 gas customers across its 64,000 square mile Two-State Service

Territory (“service territory”) that stretches across Missouri and Illinois. Ameren is the holding company of

Ameren Illinois, based in Collinsville, Illinois and Ameren Missouri, based in St. Louis, Missouri.

In order to provide energy services to its customers, Ameren purchases goods and services from a wide range of

suppliers and contractors, which, in turn, have a significant impact on the local economy. As part of its procure-

ment process, Ameren is committed to supporting diverse suppliers (i.e.; minority, women, veteran, service disa-

bled veteran & LGBT owned businesses) through its Supplier Diversity Program. Ameren sets corporate-wide

Supplier Diversity goals in which a percentage of all business spending supports qualified diverse-owned business-

es. In 2016, Ameren surpassed its corporate goal of 12.9 percent by achieving 13.4 percent, or $316 million, in

diverse supplier spending.

The focus of the present study, however, is to isolate the economic impacts of diverse supplier spending by

Ameren Illinois.

SCOPE OF WORK

Development Strategies (DS) was commissioned by Ameren to quantify the economic impacts of Ameren Illinois’

Supplier Diversity Program. Over the last 10 years, Ameren has commissioned DS to conduct similar studies for

its individual business segments including studies on Ameren Missouri, Ameren Illinois, and Ameren Energy Re-

sources (now a part of Dynegy Inc.). In 2016, DS conducted a study of Ameren Corporation’s aggregate opera-

tions, and in addition to the study, was commissioned to isolate the impacts of Ameren’s Supplier Diversity Pro-

gram. The present study provides an update to the 2016 study (which was based on diverse supplier spending in

2015) focusing on the economic impacts of Ameren Illinois’ spending with diverse suppliers in 2016.

Consistent with the previous study, the inputs to the economic impact modeling were based on direct spending for

diverse suppliers in 2016 and do not consider any operational costs associated with managing the program. Typi-

cally, studies such as this use a blended annual average across several years to account for fluctuations in opera-

tional spending that can occur due to a number of factors such as significant weather events that require substan-

tial emergency repair or planned plant and other infrastructure upgrades to meet regulatory guidelines. However,

the ultimate goal of this analysis is provide a framework for a standard replicable model that can be applied to an-

nual Ameren operations moving forward.

Details of methodology, data sources, and critical assumptions made to complete the analysis are included where

appropriate.


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ECONOMIC IMPACT OVERVIEW

INTRODUCTION

Economic impacts manifest themselves in a number of ways. They are triggered through the spending of a busi-

ness or a consumer (or other economic entities) on purchases of goods and services. This spending also supports

other businesses that use that money a “second time” to pay for their operations which, in turn, continues a multi-

plier effect as that money continues to be re-spent (or “ripples”) through the economy. Moreover, employees are

paid wages and salaries and their subsequent household spending in their communities triggers multiplier effects.

Direct economic impacts are represented here by the dollars spent by Ameren Illinois with diverse suppliers.

Indirect economic impacts measure the “multiplier effect” of the diverse supplier spending. The direct spend-

ing on diverse service providers and contractors ripples through the service territory supporting other businesses

and jobs; employees spend a large portion of their incomes near their homes at local businesses such as retail

stores, restaurants, mechanics, housing and others services. Thus, every dollar and each job related to Ameren

Illinois’ spending on diverse suppliers will contribute to additional job support across multiple economic sectors.


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METHODOLOGY

In order to maintain and expand capital facilities and distribute electricity and natural gas services, Ameren Illinois

makes purchases of goods and services that trigger further economic activity throughout its service area in the

form of income for employees and additional expenditures by supplier businesses. Employees, in turn, spend their

wages mostly near where they live, supporting further economic activity at retail shops, home repair contractors,

and other service providers and establishments. This subsequent spending causes “multiplier effects” in the econ-

omy that can be estimated for defined geographic areas using multiplier coefficients, which are obtained from the U.S.

Department of Commerce’s Regional Input-Output Multiplier System (RIMS or RIMS-II).

The RIMS and RIMS-II multipliers are derived from a comprehensive and complex set of inputs that are updated

regularly based on the normal submission of business and employment data that make up the National Income and

Products Accounts (NIPA). Such data is catalogued at the county level throughout the nation, so the RIMS-II

multipliers are calculated for public use for every county. They can also be aggregated for groups of counties to

create a regional analysis (such as for metropolitan areas or labor market areas or entire states). Multiplier coeffi-

cients for smaller geographies are not available.

To calculate the indirect impacts of economic activity in a targeted geographic area (in this case Ameren Illinois’

service area and the state of Illinois), multiplier coefficients are applied to the direct impact dollars. These multi-

pliers take into account an amount of “leakage” from the state economy because some wages and expenditures will

be spent outside of the state. Eventually, all of the direct spending leaks out of the state, but each passing round of

spending creates added multiplier effects, though in diminishing degrees.

Economic impacts are demonstrated through multiplier effects in three primary ways:

1. Output is a measure of the impact on a specific geographic area’s economic activity generated from the

spending and re-spending triggered by business and household spending. The output dollars summarize total

new or added economic activity at all points of the production process rather than just the effects on, say, gross state prod-

uct (which is a measure of value to the ultimate purchaser). Output is a more robust and larger indicator of

economic activity than Gross State Product (GSP).

2. Household Earnings is a measure of how much of the total output is attributable to new income generated

for households living in the targeted geographic area.

3. Jobs supported in the targeted geographic area by direct expenditures and multiplier effects of the subject (in

this case Ameren Illinois’ diverse suppliers/contractors).


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GEOGRAPHIC STUDY AREA

Ameren Illinois’ operations primarily occur within its Illinois

service territory of central and southern Illinois; therefore,

its spending on diverse suppliers is the most “felt” in the

service territory, and thus, state of Illinois.1

Ameren Illinois’ service territory does not conform to coun-

ty boundaries; however, since RIMS-II multipliers can only

be obtained for individual counties or combinations of coun-

ties, for the purposes of this analysis, the service area bound-

aries were reconfigured to align with county boundaries.

MULTIPLIERS

Multipliers are determined not only for geographic areas but also for a wide array of economic sectors within those

geographic areas (RIMS-II has multipliers for some 62 different sectors). It is important, therefore, to determine

the most applicable economic sectors for Ameren Illinois’ diverse supplier/contractor spending. Ameren Illinois

categorizes its diverse spending by 1) operations and maintenance and 2) capital expenditures. The utility multipli-

ers are applied to Ameren Illinois’ diverse suppliers that support non-labor operations and maintenance, since this

set of multipliers best represents the operational activities of a utility company such as Ameren Illinois.2 Unfortu-

nately, there is no “capital expenditure” sector within RIMS-II; therefore, the construction multipliers are applied to

all capital expenditures.

1 Though some of the contractors are based outside of the service territory, the goods and services provided support operations with-in the service territory and state, so all of this spending is considered direct spending. For measuring the indirect impacts, the multipliers themselves account for any leakage (indirect spending outside of the service territory or state). 2 Ameren Illinois’ diverse suppliers represent a broad range of sectors such as professional services or retail trade, but since the goods and/or services support Ameren Illinois’ non-labor operations, the utility multipliers best present this type of spending. This is meth-odology is also consistent with DS’s concurrent study on the economic impacts of Ameren Corporation in which the utility multipliers are applied to all non-labor operational spending.

Ameren Illinois Service Territory Illinois Counties


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The multipliers are applied to each spending category of Ameren Illinois’ diverse suppliers depending on target

geography and the expenditures occurring within that target geography. The output multipliers listed represent the

per dollar impact of direct spending in the service territory economy. For instance, $1,000,000 in expenditures for

contractors supporting the utilities industry in the service territory generates an additional $1,514,000 of economic

activity in the area’s economy, including $288,000 in wages (earnings multiplier).

The employment multiplier measures how many jobs are supported per million dollars in expenditures. Thus, for the utili-

ties sector, $1,000,000 in expenditures supports approximately four jobs in service territory (4.131 to be exact),

[($1,000,000 x 4.131) ÷ 1,000,000].3

3 The most up-to-date RIMS-II multipliers from the U.S. Department of Commerce for Illinois are based on 2015 economic activity. Therefore, the model used in this report inflates the million dollars from 2015, or jobs per $1,012,615, in 2016 dollars, using the na-tional Consumer Price Index (CPI).

Table 2. RIMS-II MultipliersSector Output Earnings Employment

Illinois Service AreaUtilities 1.514 0.288 4.131Construction 1.885 0.600 11.370

State of IllinoisUtilities 1.743 0.362 5.720Construction 2.287 0.721 13.937Source: U.S. Department of Commerce


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ECONOMIC IMPACTS OF AMEREN ILLINOIS SUPPLIER DIVERSITY - 2016

INPUTS

The inputs to the economic impact modeling are based on reported ex-

penditures by Ameren Illinois on diverse suppliers in 2016. Table 3

shows the spending between Tier One and Tier Two suppliers. Tier

One suppliers directly provide services to Ameren Illinois. Tier Two

suppliers provide services to Ameren Illinois contractors, although this

spending is considered direct since the terms, obligations, and allocations to these contractors are managed

through Ameren Illinois.

Of this spending, it is assumed that 60 percent supported capital projects based on the distribution of all non-labor

capital, operations, and maintenance spending for Ameren Illinois in 2016.

ECONOMIC IMPACTS

The multipliers on Table 2 are applied to the expenditure inputs summarized in Table 3, and Tables 4 and 5, be-

low, summarize these impacts on the service territory and state of Illinois in 2016. Similar tables for 2015 are in

the Appendix to this report.

Illinois Service Territory

The top of Table 4 on the next page shows the direct expenditures by Ameren Illinois on diverse suppliers in its

service territory of $149.4 million in 2016.

• The $149.4 million in Ameren Illinois’ direct expenditures to diverse suppliers triggered an additional $259.5

million in value added economic activity in its service territory, of which $71.0 million was household earnings

that supported 1,250 jobs in the service area (average wage of $57,000). The multipliers vary for different

types of major expenditures shown at the top of the table. The “blended” economic activity multiplier is 1.7,

indicating that the indirect economic impact of diverse supplier spending was over one and a half times

Ameren Illinois’ direct spending within the service territory.

• The estimated total output (economic activity) triggered by Ameren Illinois’ spending on diverse suppliers

($149.4 million) and the added multiplier effects ($259.5 million) was $408.9 million for its service territory.

• Of that amount, Ameren Illinois’ spending on diverse suppliers triggered $71.0 million in household earnings

for workers in its service territory.

• In total, Ameren Illinois spending on diverse suppliers supported approximately 1,250 indirect jobs for service

area residents.

Tier One 110,001,000$ Tier Two 39,425,000$ Total 149,426,000$

Table 3. Ameren Illinois Diverse Supplier Expenditures


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State of Illinois

The top of Table 5 on the next page shows the direct expenditures by Ameren Illinois on diverse suppliers in the

entire state of Illinois of $149.4 million in 2016.

• The $149.4 million in Ameren Illinois’ direct expenditures to diverse suppliers triggered an additional $309.2

million in value added economic activity in its service territory, of which $86.2 million was household earnings

that supported 1,570 jobs in the state (average wage of $55,000). The multipliers vary for different types of

major expenditures shown at the top of the table. The “blended” economic activity multiplier is 2.1, indicat-

ing that the indirect economic impact of diverse supplier spending was over twice Ameren Illinois’ direct

spending within the state.

• The estimated total output (economic activity) triggered by Ameren Illinois’ spending on diverse suppliers

($149.4 million) and the added multiplier effects ($309.2 million) was $458.6 million for the state.

• Of that amount, Ameren Illinois’ spending on diverse suppliers triggered $86.2 million in household earnings

for workers in the state.

Non-Labor Capital Expenditures 1

Non-Labor Operational Expenditures

Total Diverse Supplier Spending 2

Direct Spending 89,656,000$ 59,770,000$ 149,426,000$ Multipliers (see explanatory notes below)Output 1.885 1.514 1.737 Earnings 0.600 0.288 0.475 Employment 11.370 4.131 8.471 Added Economic Impact on Service TerritoryOutput 169,037,000$ 90,468,000$ 259,505,000$ Earnings 53,767,000$ 17,202,000$ 70,969,000$ Indirect Jobs Held by Service Territory Residents 1,010 240 1,250 Total Economic Impact on Service AreaOutput 408,931,000$ Earnings3 70,969,000$ Total Indirect Jobs Held by Service Territory Residents3 1,250

2 Includes Direct and Tier Two diverse supplier spending

Employment - Total change in the number of jobs held by Illinois service territory residents per $1 million of direct spending for Ameren Illinois' operations (adjusted to 2016 dollars)1 Assumes that 60 percent of total diverse supplier spending is to support capital projects based on the distribution of non-labor capital and operations and maintenance spending for Ameren Illinois in 2016

3 Only includes indirect earnings and jobs since this study only considers direct non-labor contractor spending by Ameren Illinois

Table 4. Economic Impacts of Ameren Illinois' Diverse Supplier Spending on its Illinois Service Territory, 2016

Output - Total dollar change in the Illinois service territory's economy due to expenditures for Ameren Illinois' operations

Earnings - Total dollar change in earnings of households in the Illinois service territory due to expenditures for Ameren Illinois'


51



• In total, Ameren Illinois spending on diverse suppliers supported approximately 1,570 indirect jobs for state

residents.




Direct Spending 89,656,000$ 59,770,000$ 149,426,000$ Multipliers (see explanatory notes below)Output 2.287 1.743 2.069 Earnings 0.721 0.362 0.577 Employment 13.937 5.720 10.639 Added Economic Impact on IllinoisOutput 205,061,000$ 104,161,000$ 309,222,000$ Earnings 64,606,000$ 21,625,000$ 86,231,000$ Indirect Jobs Held by Service Territory Residents 1,230 340 1,570 Total Economic Impact on IllinoisOutput 458,648,000$ Earnings3 86,231,000$ Total Indirect Jobs Held by Illinois Residents3 1,570


Employment - Total change in the number of jobs held by Illinois residents per $1 million of direct spending for Ameren Illinois' operations (adjusted to 2016 dollars)1 Assumes that 60 percent of total diverse supplier spending is to support capital projects based on the distribution of non-labor capital and operations and maintenance spending for Ameren Illinois in 2016


Table 5. Economic Impacts of Ameren Illinois' Diverse Supplier Spending on the State of Illinois, 2016

Output - Total dollar change in the Illinois economy due to expenditures for Ameren Illinois' operations

Earnings - Total dollar change in earnings of households in Illinois due to expenditures for Ameren Illinois'


52


DEVELOPMENT STRATEGIES I

APPENDIX


53


DEVELOPMENT STRATEGIES II

A. 2015 ECONOMIC IMPACTS OF DIVERSE SPENDING BY SERVICE TERRITORY AND STATE




Direct Spending 92,397,000$ 66,909,000$ 159,306,000$ Multipliers (see explanatory notes below)Output 1.896 1.398 1.687 Earnings 0.649 0.291 0.499 Employment 13.981 4.294 9.894 Added Economic Impact on Service TerritoryOutput 175,203,000$ 93,525,000$ 268,728,000$ Earnings 59,984,000$ 19,477,000$ 79,461,000$ Indirect Jobs Held by Service Territory Residents 1,190 260 1,450 Total Economic Impact on Service AreaOutput 428,034,000$ Earnings3 79,461,000$ Total Indirect Jobs Held by Service Territory Residents3 1,450





Direct Spending 92,397,000$ 66,909,000$ 159,306,000$ Multipliers (see explanatory notes below)Output 2.369 1.5437 2.022 Earnings 0.776 0.3319 0.589 Employment 17.062 5.3809 12.146 Added Economic Impact on IllinoisOutput 218,888,000$ 103,287,000$ 322,175,000$ Earnings 71,700,000$ 22,207,000$ 93,907,000$ Indirect Jobs Held by Service Territory Residents 1,450 330 1,780 Total Economic Impact on IllinoisOutput 481,481,000$ Earnings3 93,907,000$ Total Indirect Jobs Held by Illinois Residents3 1,780

2 Includes Direct and Tier Two diverse supplier spending3 Only includes indirect earnings and jobs since this study only considers direct non-labor contractor spending by Ameren Illinois


Economic Impacts of Ameren Illinois' Diverse Supplier Spending on the State of Illinois, 2015

1 Assumes that 58 percent of total diverse supplier spending is to support capital projects based on the distribution of non-labor capital and operations and maintenance spending for Ameren Corporation in 2014

1 Assumes that 58 percent of total diverse supplier spending is to support capital projects based on the distribution of non-labor capital and operations and maintenance spending for Ameren Corporation in 2014

Output - Total dollar change in the Illinois economy due to expenditures for Ameren Illinois' operations

Earnings - Total dollar change in earnings of households in Illinois due to expenditures for Ameren Illinois'Employment - Total change in the number of jobs held by Illinois residents per $1 million of direct spending for Ameren Illinois' operations (adjusted to 2015 dollars)

Economic Impacts of Ameren Illinois' Diverse Supplier Spending on its Illinois Service Territory, 2015

Output - Total dollar change in the Illinois service territory's economy due to expenditures for Ameren Illinois' operations

Earnings - Total dollar change in earnings of households in the Illinois service territory due to expenditures for Ameren Illinois'Employment - Total change in the number of jobs held by Illinois service territory residents per $1 million of direct spending for Ameren Illinois' operations (adjusted to 2015 dollars)


54


DEVELOPMENT STRATEGIES III

B. SUMMARY OF 2015 AND 2016 ECONOMIC IMPACTS

20152 20163

Total Direct Spending1 159,306,000$ 149,426,000$ Indirect Output 322,175,000$ 309,222,000$ Indirect Earnings 93,907,000$ 86,231,000$ Indirect Jobs 1,780 1,570 Total Economic Output 481,481,000$ 458,648,000$ 1 Direct spending based on actual expenditures and not adjusted to constant dollars

20152 20163

Total Direct Spending1 159,306,000$ 149,426,000$ Indirect Output 268,728,000$ 259,505,000$ Indirect Earnings 79,461,000$ 70,969,000$ Indirect Jobs 1,450 1,250 Total Economic Output 428,034,000$ 408,931,000$ 1 Direct spending based on actual expenditures and not adjusted to constant dollars2 At the time of conducting the economic impact study reflecting 2015 spending, the most up-to-date multipliers at the time from the U.S. Department of Commerce were based on 2010 economic activity3 At the time of conducting the present economic impact study based on 2016 spending, the most up-to-date multipliers from the U.S. Department of Commerce were based on 2015 economic activity.

Summary of Annual Economic Impacts of Ameren Illinois Diverse Supplier Spending on the State of Illinois

3 At the time of conducting the present economic impact study based on 2016 spending, the most up-to-date multipliers from the U.S. Department of Commerce were based on 2015 economic activity.

2 At the time of conducting the economic impact study reflecting 2015 spending, the most up-to-date multipliers at the time from the U.S. Department of Commerce were based on 2010 economic activity

Summary of Annual Economic Impacts of Ameren Illinois Diverse Supplier Spending on the Ameren's Illinois Service Territory


55


DEVELOPMENT STRATEGIES IV

C. 2015 AND 2016 DIVERSE SPENDING BY ILLINOIS COUNTY


56


DEVELOPMENT STRATEGIES V


57

APPENDIX B

ORGANIZATION PARTICIPATION


58

ORGANIZATION PARTICIPATION

Ameren actively engages with a number of organizations that support and promote capabilities of diverse suppliers:

• American Association of Blacks in Energy

• Chicago Minority Supplier Development Council

• Edison Electric Institute

• Gateway Business Guild

• Hispanic Chamber of Commerce of Metropolitan St. Louis

• Illinois Black Chamber of Commerce

• Illinois Hispanic Chamber of Commerce

• National Minority Supplier Development Council

• St. Louis Minority Business Council

• Women’s Business Development Center


59

APPENDIX C

ORGANIZATIONAL CHART


60

CORPORATE SUPPLIER DIVERSITY LEADERSHIP COUNCIL (CSDLC)

Dennis Weisenborn VP Safety and Supply Services, and Chief Procurement Officer

Mark Brandt Senior Director, Supply Services

Ron Pate Ameren Illinois, Senior Vice President Operations and Tech Services

Shawn Schukar Senior VP Transmission Business Development and Project Mangement

Mary Heger Senior VP and Chief Information Officer

Kevin Anders Ameren Missouri, Assistant Vice President, Operations and Tech Services

Timothy Herrmann Vice President Callaway Energy Center

Geralynn Lord VP Corporate Communications

Sharon Harvey Davis VP Diversity and Inclusion and Chief Diversity Officer

Byron Witherspoon Director, Supplier Diversity

Lonza Bufford Supplier Diversity Executive

John Barud Sr. Director Division

Operations South

Craig Gilson Sr. Director Division

Operations North

Eric Kozak Sr. Director

Gas Operations

Chuck Mueller Sr. Director Portfolio

and Facilities Management

Derek Cliff Director Construction Service

Shirley Stennis Director Customer Service

Joe Solari Sr. Director IT Application Development

MEMBERS

AMEREN ILLINOIS SUPPLIER DIVERSITY STEERING COMMITTEE


61

Byron Witherspoon, Director

Supplier DiversityStrategy

Ameren IllinoisStrategy

Ameren Missouri/ATX Strategy

Ameren Generation& B&CS Strategy

Business DevelopmentStrategy

Marketing/Comm Strategy





Lonza Bu�ord, SDE Stacy Dover, SDE Sylvania McDaniel, SDEVeronica Walton, SDE

Anjanette Brooks, SDE Veronica Walton, SDE

• Work collaboratively with BL to identify key opportunities to pursue

• Manage key T&D categories

• Analyze Tier II plans

• BL reporting & engagement

• Target Alpha ops

• IUBC support & regional organization involvement

• Prime business reviews

• Work collaboratively with BLs to identify key opportunities to pursue

• Manage key T&D categories




• Regional organization involvement


• Work collaboratively with BLs to identify key opportunities to pursue

• Manage key generation and B&CS categories




• Regional organization involvement


• Tier II program management

• Manage end-to-end supplier development

• Facilitate and support outreach & mentoring

• Lead Economic Impact initiative

• End-to-end supplier registration services

• Facilitate Dartmouth selection

• Develop and implement comprehensive/ coordinated communication strategy

• Lead SD branding and marketing efforts

• Facilitate and support outreach initiatives

ORGANIZATIONAL CHART


62

APPENDIX D

EXPENDITURES BY PRODUCT/SERVICE CATEGORY

(in thousands)

African American

Hispanic

Native American

Asian-Pacific

Total Men

Total Women

Total MBE

Total WBE

Subtotal M/WBE

Total VBE

Total SBE

2016 Total M/W/V/SBE

Total Company

Product Service D

escription

Men

Women

Men

Women

Men

Women

Men

Women

Minority Business Enterprise



Women Business Enterprise

Minority/Women Business Enterprise

Veteran Business Enterprise

Small Business Enterprise

Minority/Women/Veteran/ Small Business Enterprise

Purchases

ED M

tce and Const. Services D

istribution$

7,2081,247

5807,788

1,2479,035

42,33851,373

3,96316,154

71,490271,837

%2.7%

0.5%0.2%

0.0%0.0%

0.0%0.0%

0.0%2.9%

0.5%3.3%

15.6%18.9%

1.5%5.9%

26.3%

Engineering and A

rchitectural Svcs.$

2,1880

1712,359

02,359

2,5014,860

1741,595

6,62936,182

%6.0%

0.0%0.0%

0.0%0.0%

0.0%0.5%

0.0%6.5%

0.0%6.5%

6.9%13.4%

0.5%4.4%

18.3%

Environmental

Services$

950533

32982

5331,515

1,1942,709

818,116

20,83324,635

%3.9%

2.2%0.1%

0.0%0.0%

0.0%0.0%

0.0%4.0%

2.2%6.1%

4.8%11.0%

0.0%73.5%

84.6%

Facilities M

anagement

$619

192332

47510

1,368332

1,7002,511

4,211242

3,8248,277

13,008

%4.8%

0.0%1.5%

2.6%0.4%

0.0%3.9%

0.0%10.5%

2.6%13.1%

19.3%32.4%

1.9%29.4%

63.6%

Fleet Materials

$446

8701,316

1,316

1,3163,457

6,45711,230

24,773

%1.8%

0.0%3.5%

0.0%0.0%

0.0%0.0%

0.0%5.3%

0.0%5.3%

0.0%5.3%

14.0%26.1%

45.3%

Gas Services

$160

6688

22688

3143,213

3,52718,426

21,95348,387

%0.3%

0.0%0.1%

0.2%0.0%

0.0%0.0%

0.0%0.5%

0.2%0.6%

6.6%7.3%

0.0%38.1%

45.4%

IT Materials

$4,553

2541

4,554254

4,808363

5,17128

1,1296,328

12,490

%36.5%

0.0%0.0%

2.0%0.0%

0.0%0.0%

0.0%36.5%

2.0%38.5%

2.9%41.4%

0.2%9.0%

50.7%

Meter Services

$0

00

11,47311,473

037

11,51022,791

%0.0%

0.0%0.0%

0.0%0.0%

0.0%0.0%

0.0%0.0%

0.0%0.0%

50.3%50.3%

0.0%0.2%

50.5%

Staff Augm

entation$

5,7115,711

05,711

1725,883

00

5,8836,554

%0.0%

0.0%87.1%

0.0%0.0%

0.0%0.0%

0.0%87.1%

0.0%87.1%

2.6%89.8%

0.0%0.0%

89.8%

Substation Material

$14

4875,356

5,8570

5,857237

6,094494

7,52414,112

33,808

%0.0%

0.0%1.4%

0.0%0.0%

0.0%15.8%

0.0%17.3%

0.0%17.3%

0.7%18.0%

1.5%22.3%

41.7%

Vegetation M

anagement Services

$749

242749

242991

3,4734,464

3,0332,375

9,87280,044

%0.9%

0.0%0.0%

0.3%0.0%

0.0%0.0%

0.0%0.9%

0.3%1.2%

4.3%5.6%

3.8%3.0%

12.3%

Gross Products/

Services Procurement

$16,887

1,7807,938

91647

06,038

030,910

2,69633,606

67,475101,081

11,39975,637

188,117574,509

%2.9%

0.3%1.4%

0.2%0.0%

0.0%1.1%

0.0%5.4%

0.5%5.8%

11.7%17.6%

2.0%13.2%

32.7%

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