CMS Energy Q4 Earnings Call Highlights

Core Viewpoint - CMS Energy is optimistic about its regulatory outcomes and growth prospects, particularly in renewable energy and large-load opportunities, while maintaining a focus on customer affordability and long-term investments [4][6][19]. Regulatory Developments - The company anticipates a favorable outcome from its pending electric rate case, expecting a return on equity (ROE) of 9.9% or better, supported by constructive positions from the Michigan Public Service Commission [1][6]. - CMS Energy received approval for a 20-year renewable energy plan, representing approximately $14 billion in customer investment opportunities over the next decade [2][6]. Financial Performance and Guidance - CMS Energy reported adjusted earnings per share (EPS) of $3.61 for 2025, exceeding guidance and reflecting over 8% growth from 2024 [8]. - The company raised its 2026 adjusted EPS guidance to a range of $3.83 to $3.90, indicating 6% to 8% growth from 2025 results [6][8]. Capital Investment Plan - The five-year utility capital investment plan has been expanded to $24 billion, up $4 billion, supporting approximately 10.5% rate base growth through 2030 [6][11]. - Major drivers of the updated plan include an integrated resource plan to be filed in mid-2026, which will address capacity needs and incorporate renewable energy sources [11]. Large-Load Opportunities - The company's large-load pipeline, particularly for data centers, is expanding, with potential projects requiring $2.5 billion to $5 billion of investment per additional gigawatt [5][14]. - The Large Load Tariff has been approved to facilitate data center growth while ensuring existing customers are not burdened with the costs [3][12]. Customer Affordability and Cost Savings - CMS Energy emphasizes customer affordability, noting that utility bills represent about 3% of total expenses, down 150 basis points from a decade ago [19]. - The company achieved over $100 million in savings in 2025 through efficiency efforts and estimates that energy waste reduction programs will save customers about $1.2 billion [20]. Financing Strategy - In 2025, CMS Energy invested $3.8 billion, funded through operating cash flow, bond and equity financings, while maintaining investment-grade credit metrics [21]. - For 2026, the company plans to issue over $1.7 billion at the utility level and approximately $700 million of equity at the parent level [21]. Dividend Policy - CMS Energy aims to continue dividend growth, targeting a payout ratio of about 60% in 2026 and approximately 55% over time [22].