Electric Utility

Gas Utility

NorthStar Clean Energy

Consumers Utility Revenue

- Residential

- Commercial

- Industrial

- Other

Revenue from Contracts

Financing Income

Alternative-Revenue Programs

Leasing Income

Total Operating Revenue - CMS Energy

Total Operating Revenue - Consumers

86d87e57b1cbfdcd8bc5718487e9fb477d187fc3c64beea770ea0911ad286eee

1. **CMS increased its planned utility debt issuance for 2024 from $500 million to $675 million** to rebalance the rate-making capital structure due to recent rate case outcomes ** **[CMS_3394266_4]** **[CMS_3394266_15]** **. Given the potential impact of increased debt on the company's balance sheet and credit ratings, how does management plan to manage debt levels while ensuring financial stability?

2. **With an upcoming equity need of up to $350 million starting next year**, and discussions about potentially pulling ahead some parent debt financing needs from 2025 to 2024 if market conditions are favorable ** **[CMS_3394266_4]** **[CMS_3394266_21]** **, could you elaborate on the company's capital raising strategy and its impact on shareholder value?

3. You have a **$17 billion 5-year capital plan** focused on transitioning to renewables and clean energy while maintaining customer affordability ** **[CMS_3394266_1]** **[CMS_3394266_2]** **. Considering this significant investment, what specific measures are you implementing to prevent rate hikes that could burden customers?

4. In the electric rate case filing, you mentioned that **electric cases are more complex than gas cases, with over 20 intervenors compared to less than 10 in gas cases** **[CMS_3394266_9]**. What challenges do you anticipate in achieving a constructive outcome, and how might increased complexity and intervenor participation affect the timeline and results of the rate case?

5. Regarding servicing data centers, **data centers are currently on industrial rates rather than economic development rates**, and there is ongoing exploration of a specific data center rate ** **[CMS_3394266_9]** **[CMS_3394266_7]** **. How do you plan to attract and retain large data center customers while ensuring that rate design changes do not negatively impact the company's revenue stability?

845a65eb4225d67d829fcc59e9ff67c76128fe558404b80f9bc8e3987d6a325b

### Q2 2024 Earnings Call
   - **Issued Period**: Q2 2024
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **Adjusted Earnings Per Share (EPS)**: Full-year guidance of **$3.29 to $3.35 per share**, with confidence toward the high end of this range  **[CMS_3394266_2]** .
     - **Long-term Adjusted EPS Growth**: Guidance toward the high end of the range of **6% to 8%**, implying **7% up to 8%**  **[CMS_3394266_2]** .

### Q1 2024 Earnings Call
   - **Issued Period**: Q1 2024
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **Full Year EPS Guidance**: Reaffirmed at **$3.29 to $3.35 per share**, with confidence toward the high end  **[CMS_3380718_2]** .
     - **Long-term Adjusted EPS Growth**: High end of the range of **6% to 8%**, implying **7% up to 8%**  **[CMS_3380718_2]** .
     - **Weather Impact**: Plan for normal weather, equating to **$0.22 per share of positive variance** for the remaining 9 months  **[CMS_3380718_3]** .
     - **Regulatory Perspective**: Assuming **$0.18 per share of positive variance** from a constructive electric rate order  **[CMS_3380718_3]** .
     - **Cost Performance**: Anticipate lower O&M expenses, driving **$0.09 per share of positive variance** for the remaining 9 months  **[CMS_3380718_3]** .

### Q4 2023 Earnings Call
   - **Issued Period**: Q4 2023
   - **Guided Period**: FY 2024
   - **Guidance**:
     - **2024 Adjusted EPS Guidance**: Raised to **$3.29 to $3.35 per share**, with confidence toward the high end  **[CMS_3371540_4]** **[CMS_3371540_3]** .
     - **Dividend**: Increase to **$2.06 per share for 2024**, targeting a payout ratio of about 60%  **[CMS_3371540_3]** .
     - **Long-term EPS Growth**: High end of the range of **6% to 8%**, implying up to 8%  **[CMS_3371540_3]** .
     - **Utility Investment Plan**: New 5-year, **$17 billion utility customer investment plan**, supporting approximately **7.5% rate base growth through 2028**  **[CMS_3371540_2]** .
     - **Equity Needs**: Resume ATM equity issuance program up to **$350 million per year** from 2025 through 2028  **[CMS_3371540_5]** .
     - **Debt Issuances**: Limited to utility debt issuances for 2024, with no planned long-term financings at the parent company  **[CMS_3371540_5]** .

### Q3 2024 Earnings Call
   - **Issued Period**: Q3 2024
   - **Guided Period**: N/A
   - **Guidance**: The documents do not contain information about the Q3 2024 earnings call for CMS, so specific guidance metrics are unavailable.

21d33c842ef9251a75f4a316c30e74b03479832e30caf0f96f809bf1ea77376b

Current Assets (USD, millions)

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395ca3190a18cc16f7ccf5fee65218cbc839fb82329ce9e2af6f1db524564992

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93ae71db9eeb90d1075c5ee2ac801ca732ec4dd1ae148a4fcd9e29654ff012c9

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7c4606fcd456ccac3f9d3f4d68d5b5616f43125e07a0e8cb719172992ccd4af7

| Name                | Position                                      | Start Date          | Short Bio                                                                                                                                          |
|---------------------|-----------------------------------------------|---------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|
| Garrick J. Rochow   | President and CEO                             | December 2020       | Garrick J. Rochow has been serving as the **President and Chief Executive Officer** of CMS Energy and Consumers Energy since **December 2020**. He has over 20 years of experience in the utility industry, including 19 years with CMS, and has held various leadership positions within the company  **[0000811156-24-000048_cms-20240308.htm:16]** **[0000811156-24-000052_cms-20240321.htm:15]** . |
| Rejji P. Hayes      | Executive Vice President and CFO              | October 20, 2023    | Rejji P. Hayes serves as the **Executive Vice President and Chief Financial Officer** of CMS Energy Corporation. He has been in this role since at least **October 20, 2023**  **[0001104659-23-110417_tm2328518d1_s3asr.htm:31]** . |
| Brandon J. Hofmeister | Senior Vice President, Sustainability and External Affairs | N/A                 | The documents do not provide specific details about the start date or a comprehensive biography for Brandon J. Hofmeister, who serves as Senior Vice President, Sustainability and External Affairs at CMS. However, it is noted that he held the position of Senior Vice President at CMS and Consumers in 2023  **[0000811156-24-000052_cms-20240321.htm:35]** . |
| Shaun M. Johnson    | Senior Vice President and General Counsel     | N/A                 | The documents do not provide specific details on the start date for Shaun M. Johnson as Senior Vice President and General Counsel at CMS. However, he is listed as one of the named executive officers (NEOs) for CMS as of December 31, 2023  **[0000811156-24-000052_cms-20240321.htm:35]** . |
| LeeRoy Wells Jr.    | Senior Vice President, Operations             | N/A                 | The documents do not provide specific details on the start date or a comprehensive biography for **LeeRoy Wells Jr.**, who serves as the **Senior Vice President, Operations** at CMS. However, it is noted that he is one of the named executive officers (NEOs) as of December 31, 2023  **[0000811156-24-000052_cms-20240321.htm:35]** **[0000811156-24-000048_cms-20240308.htm:36]** . |

30a20a9126d539cd1f91c9648abbedf21eccd532bbc5a22c668942914c55a31e

**Annual guidance for FY 2024:**
- **EPS**: $3.29 to $3.35  **[CMS_3405041_3]** **[CMS_3405041_5]**  (no change from prior guidance $3.29 to $3.35  **[CMS_3394266_2]** )

**Annual guidance for FY 2025:**
- **EPS**: $3.52 to $3.58  **[CMS_3405041_3]**  (no prior guidance)  
- **Long-term adjusted EPS growth**: 6% to 8%  **[CMS_3405041_3]**  (no change from prior guidance 6% to 8%  **[CMS_3394266_2]** )

**Additional guidance (multi-year / other):**
- **5-Year plan updates**: CMS plans to provide a refresh of their 5-year capital and financial plans in Q4 2024  **[CMS_3405041_3]**  (no prior guidance)  
- **FFO to debt target**: mid-teens FFO to debt on a consolidated basis  **[CMS_3405041_5]**  (no prior guidance)  
- **Tax credit transferability**: $0.5 billion embedded in the 5-year plan  **[CMS_3405041_27]**  (no prior guidance)  

e65756d5816b5f9605bd5a44627fcdd0a40f897445d2b9f6a012471dd104d66d

| Name                          | Start Date | End Date | Reason for Change |
|-------------------------------|------------|----------|-------------------|
| PricewaterhouseCoopers LLP    | 2007  **[0000811156-24-000044_cms-20231231.htm:163]**    | Present  | Current auditor   |

f40d08d3d8818f7d12f6b8adfb6878e73d11fe57bfb455a0d18dcdb9e1a6ec7f

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

Current Assets [USD, Millions]

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Accounts Receivable [USD, Millions]

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Shareholders' Equity [USD, Millions]

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Common Stock [USD, Millions]

Additional Paid-in Capital [USD, Millions]

Adjustments for Non-Cash Items [USD, Millions]

Stock-Based Compensation [USD, Millions]

Changes in Working Capital [USD, Millions]

Capital Expenditures (CapEx) [USD, Millions]

Proceeds from Debt [USD, Millions]

Repayments of Debt [USD, Millions]

Share Repurchases [USD, Millions]

Dividend Payments [USD, Millions]

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Cost of Goods Sold (COGS) [USD, Millions]

SG&A [USD, Millions]

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D&A [USD, Millions]

Interest Expense [USD, Millions]

Operating Income (EBIT) [USD, Millions]

Net Income [USD, Millions]

EPS - Basic [USD, Per Share]

EPS - Diluted [USD, Per Share]

788510eea84061195adde024a0fe760c24247f5d9992dca24eb57f80be5268de

a1f93915f9d6667791a2b587093625e1ad687202473b2fc2f112381bb2c057d4

| Year  | Amount Due [Millions] | Debt Type                                      | Interest Rate [%] | % of Total Debt                          |
|-------|------------------------|-----------------------------------------------|-------------------|------------------------------------------|
| 2025  | 400                   | Unsecured Term Loan Credit Facility           | 5.694            | 2.4% = (400 / 16,554) * 100 **[0000811156-24-000114_cms-20240930.htm:52]** **[0000811156-24-000114_cms-20240930.htm:56]** |
| 2027  | 75                    | Tax-Exempt Variable Rate Limited Obligation Revenue Bonds | 3.350            | 0.5% = (75 / 16,554) * 100 **[0000811156-24-000114_cms-20240930.htm:52]** **[0000811156-24-000114_cms-20240930.htm:56]** |
| 2029  | 600                   | First Mortgage Bonds                          | 4.600            | 3.6% = (600 / 16,554) * 100 **[0000811156-24-000114_cms-20240930.htm:52]** **[0000811156-24-000114_cms-20240930.htm:56]** |
| 2030  | 700                   | First Mortgage Bonds                          | 4.700            | 4.2% = (700 / 16,554) * 100 **[0000811156-24-000114_cms-20240930.htm:52]** **[0000811156-24-000114_cms-20240930.htm:56]** |

abefe3b2353afee36f89d2cb58c46cf06894ada61ea549296bf3f6aa8bdfad32

- **CMS Energy's FFO-to-debt ratio remains under 15%**, and management does not foresee improving it to the **17% required for a credit rating upgrade** by Moody's in the near term or within their 5-year plan, indicating potential **limitations in financial flexibility**.  **[CMS_3371540_6]**
- There is an **ongoing storm review process and audit**, with results expected in September. The company anticipates incorporating the findings into future rate cases, which could potentially **lead to increased regulatory scrutiny or required investments**, impacting financial performance.  **[CMS_3371540_24]**
- CMS Energy's **growth projections rely on elevated energy and capacity prices** in the **years beyond 2026**, particularly from their Dearborn Industrial Generation (DIG) facility. If these prices do not remain elevated, the company's growth may not meet expectations.  **[CMS_3371540_7]**

7b63162d1791263d85b0e618ba3549fb78452a017a1f04c029d166c1ef605761

- **CMS Energy is expecting significant load growth from secured contracts with data centers and manufacturing projects, including a 230 MW data center expansion online by 2025, with a strong pipeline that could lead to upside in long-term load growth expectations.**  **[CMS_3380718_11]**
- **The company is focusing on improving reliability and long-term resiliency of their electric system through capital investments and best practices, while also emphasizing affordability by driving down unit costs, which is expected to benefit customers and deliver positive outcomes in their upcoming electric rate case.**  **[CMS_3380718_5]**
- **There are positive trends in weather-normalized sales, particularly in higher-margin residential and commercial customer classes, contributing to strong financial performance and supporting confidence in their growth outlook.**  **[CMS_3380718_9]**

28f325e07f466093bf0560a875a0bf8fc9b1e0d414040d5721dc97b734736c8b

- **Weather-normalized Commercial and Industrial electric sales volumes decreased in Q2 2024**, with Commercial down **1%** and Industrial down **2%** compared to Q2 2023, indicating potential weakness in demand.  **[CMS_3394266_12]**
- The upcoming implementation of performance-based ratemaking could introduce financial risks, with potential penalties of up to **$10 million** annually if performance metrics are not met.  **[CMS_3394266_17]** **[CMS_3394266_18]**
- **Heavy storm activity** in the first half of 2024 led to increased operational challenges and costs, resulting in a negative impact of **$0.03 per share** due to storm restoration expenses, indicating vulnerability to weather-related disruptions.  **[CMS_3394266_3]** **[CMS_3394266_12]** **[CMS_3394266_13]**

a6098f2567bc03ea556d503ef6d890c505fc19a0ea547bfef1d70a29d7832099

1. **Increased Demand and CapEx**  
   **Q:** Are you seeing higher demand and planning for increased CapEx?  
   **A:** Yes, we are experiencing strong economic growth in the state, leading to higher demand than projected in our 2021 Integrated Resource Plan (IRP).  **[CMS_3394266_8]** **[CMS_3394266_19]**  This increased demand will be reflected in our Renewable Energy Plan filing in November.  **[CMS_3394266_8]**  We anticipate additional capital investment opportunities between 2026 and 2028, providing upside potential in terms of capital growth.  **[CMS_3394266_8]** 

2. **Financing Strategy**  
   **Q:** What are your plans regarding financing and potential debt or equity issuance?  
   **A:** We plan to issue about **$675 million** in the second half of the year at the utility, slightly increased from the initial **$500 million** due to rate case outcomes with modestly lower equity levels.  **[CMS_3394266_15]**  We're considering pulling forward some parent debt financing needs, such as senior notes or hybrids, to take advantage of favorable market conditions.  **[CMS_3394266_21]**  However, we do not plan to issue equity in 2024, and our equity needs starting next year remain up to **$350 million**.  **[CMS_3394266_21]** 

3. **Performance-Based Ratemaking**  
   **Q:** Can you provide an update on performance-based ratemaking legislation and its impact?  
   **A:** The dialogue on performance-based ratemaking has been constructive.  **[CMS_3394266_17]**  We've narrowed down to four benchmarkable metrics, and while details are being finalized, we expect implementation over the next one to two years.  **[CMS_3394266_17]** **[CMS_3394266_18]**  The mechanism is intended to be symmetric, offering both upside and downside of approximately **$10 million** each, which is manageable in the context of the year.  **[CMS_3394266_18]** 

4. **Sales Trends and Outlook**  
   **Q:** How are underlying sales trends and what is the near-term outlook?  
   **A:** Despite a slight pullback in Q2 weather-normalized sales—residential up **0.1%**, commercial down **1%**, industrial down **2%**—year-to-date trends are positive.  **[CMS_3394266_12]**  Residential sales are up about **1%**, commercial up over **1%**, and industrial down about **1%**, with all-in sales up over **0.5%**.  **[CMS_3394266_12]**  Accounting for our **2%** annual energy waste reduction, underlying economic conditions remain strong across all customer classes.  **[CMS_3394266_12]** 

5. **Data Center Load Growth**  
   **Q:** How is data center growth impacting your operations and is legislation affecting it?  
   **A:** Data center projects are progressing regardless of state legislation on sales and use tax incentives.  **[CMS_3394266_7]** **[CMS_3394266_10]**  We've signed a **230-megawatt** data center set to come online in 2025-2026.  **[CMS_3394266_10]**  The primary focus for data centers is the speed of infrastructure deployment rather than tax legislation, and we're accommodating their needs within a **two to three-year** cycle.  **[CMS_3394266_10]** 

6. **Outperformance Drivers**  
   **Q:** What is driving your current level of outperformance?  
   **A:** Outperformance is driven by rate relief net of investments, cost performance initiatives, and strong performance at our non-utility business, NorthStar.  **[CMS_3394266_15]**  NorthStar has contributed an additional **$0.05** year-over-year due to strong operations at DIG and benefits from solar projects.  **[CMS_3394266_15]**  We continue to execute cost management initiatives through the CE Way, yielding annual savings greater than **$50 million**.  **[CMS_3394266_6]** 

7. **Electric Rate Case and Settlement**  
   **Q:** What are your thoughts on the electric rate case settlement and potential rate design issues?  
   **A:** While we always look for settlement opportunities, electric cases are more complex with over **20 intervenors**.  **[CMS_3394266_9]**  Our case focuses on electric reliability investments, such as system hardening and tree trimming, aligning with customer and regulator expectations.  **[CMS_3394266_9]**  Regarding rate design, data centers currently use an industrial rate, and we're exploring a specific data center rate to better balance capacity and energy costs.  **[CMS_3394266_9]** 

8. **Palisades Nuclear Plant Impact**  
   **Q:** How does the potential return of the Palisades plant affect you?  
   **A:** The Palisades plant is making progress towards reopening, with an additional **$150 million** allocated by the state.  **[CMS_3394266_21]**  A Power Purchase Agreement for its output has already been signed with co-ops in Michigan and Indiana, so it's already spoken for.  **[CMS_3394266_21]**  We do not anticipate any adverse impact on CMS Energy as a result of Palisades returning.  **[CMS_3394266_21]** 

9. **Storm Restoration and Reliability**  
   **Q:** How are you performing in terms of storm restoration and reliability improvements?  
   **A:** We've made significant improvements, reducing the size of outages and increasing the percentage of customers restored within **24 hours** from **90%** last year to **95%** this year.  **[CMS_3394266_13]**  Investments in tree trimming have led to more than **60%** reduction in outages where trees are trimmed.  **[CMS_3394266_13]**  Financially, we've avoided over **$40 million** in costs through efficient storm restoration efforts.  **[CMS_3394266_13]** 

10. **DIG Recontracting and Power Prices**  
    **Q:** What's the outlook for DIG recontracting given power price trends?  
    **A:** The energy and capacity markets continue to present ripe opportunities.  **[CMS_3394266_5]**  We are securing favorable bilateral contracts for capacity prices well above our plan, which strengthens and extends our financial performance.  **[CMS_3394266_5]** 

13201f8c3246245927cd22541aa42200d56b00fb962da21b5a8311b7b3a72f46

- **CMS Energy has announced a new 5-year, $17 billion utility customer investment plan, supporting approximately 7.5% rate base growth through 2028**, with significant investments in renewable generation, grid modernization, and reliability improvements.  **[CMS_3371540_2]**
- The company expects a **constructive outcome in its electric rate case**, with positive indicators and support from key stakeholders, which could enhance future earnings growth.  **[CMS_3371540_10]**
- **Increased load growth opportunities** due to manufacturing and data center expansion in Michigan, supported by favorable policies like the **Chips Act** and the **Inflation Reduction Act**, with a robust pipeline not yet fully reflected in their plan, suggesting potential upside to earnings.  **[CMS_3371540_14]**

d2b37b0f9c1086b773755f3a70f3ced4e53a8f817e9aaf4c53878f4ccd63d791

- CMS Energy plans to request a **larger revenue increase** in its upcoming electric rate case due to increased capital and O&M spending, which may lead to higher customer bills and potential regulatory pushback.  **[CMS_3380718_15]** ,  **[CMS_3380718_5]**
- The company anticipates potential opposition from the **Attorney General** during rate case proceedings, especially during the political season, which could complicate or delay rate approvals.  **[CMS_3380718_14]**
- There is uncertainty regarding **future earnings beyond 2025**, as the company is not yet considering derisking future years, indicating possible challenges in sustaining growth targets.  **[CMS_3380718_10]**

db7dab6d4cb74d4911cf1e5023a30682a605644294b73b1e56de9043e5132ae7

1. **Increasing Load Growth**  
   **Q:** Is load growth increasing, and how will it impact plans?  
   **A:** Management expects significant upward pressure on load growth beyond the current **0.5%** estimate due to new data centers and manufacturing developments. This increase will be reflected in upcoming renewable energy and integrated resource plans, providing opportunities for additional capital investments.  **[CMS_3405041_14]** ,  **[CMS_3405041_16]** ,  **[CMS_3405041_20]** ,  **[CMS_3405041_26]** 

2. **Capital Expenditure and Equity Needs**  
   **Q:** Will higher CapEx require more equity financing?  
   **A:** With capital plans expected to rise, management anticipates equity needs of up to **$350 million** per year starting next year. Strong cash flow and tax credit monetization may reduce equity requirements, funding approximately **35–40%** of utility CapEx with equity. They foresee upward pressure on the **$17 billion** five-year capital plan but will pace investments to align with regulatory approvals and customer demand.  **[CMS_3405041_20]** ,  **[CMS_3405041_27]** 

3. **Storm Recovery Mechanism**  
   **Q:** Will the proposed storm recovery mechanism be approved?  
   **A:** The company proposed a storm restoration tracker to share costs with customers, but staff is not supportive. Management anticipates the commission will need to weigh in, possibly requiring a full order, which may impact the current rate case settlement. They view staff's position as a starting point but seek approval to ensure better service through necessary investments.  **[CMS_3405041_17]** ,  **[CMS_3405041_18]** ,  **[CMS_3405041_19]** 

4. **Data Center and Manufacturing Demand**  
   **Q:** Can you accommodate large new data center loads?  
   **A:** Yes, CMS Energy can support significant load increases from data centers and manufacturing. They have existing capacity and infrastructure, enabling them to meet timelines for customers like Switch, which is expanding by **230 MW** by 2026, and Corning, ramping up to **90–95 MW**. They work closely with customers to align ramp-up schedules and ensure reliable service.  **[CMS_3405041_6]** ,  **[CMS_3405041_23]** ,  **[CMS_3405041_24]** 

5. **DIG Performance and Capacity Contracts**  
   **Q:** What's the outlook for DIG's capacity revenues?  
   **A:** The Dearborn Industrial Generation (DIG) continues to perform well, securing bilateral capacity contracts at prices above plan. They see strong capacity market conditions, with reverse inquiries at levels of **$5 to $6** per kilowatt-month, significantly higher than historical prices of **$3 to $3.50**. This robust opportunity is expected to persist due to reduced supply and increased demand in Zone 7.  **[CMS_3405041_8]** ,  **[CMS_3405041_11]** 

6. **Energy Storage Plans and IRA Impact**  
   **Q:** How will energy storage targets be affected by tax changes?  
   **A:** Energy storage plans will unfold in the 2026 integrated resource plan. Management considers a potential repeal of the IRA a low probability event and believes it would not significantly alter their long-term storage investments, though costs might rise without tax credits. They remain committed to complying with state laws mandating storage deployment.  **[CMS_3405041_10]** 

7. **Cost Overruns and Expense Management**  
   **Q:** What's causing cost swings in the financials?  
   **A:** Higher-than-budgeted costs in insurance and IT led to funding adjustments. Management is addressing these through contingencies from countermeasures like operational efficiencies and favorable weather impacts, ensuring these are current costs and not pulled forward from future budgets.  **[CMS_3405041_12]** ,  **[CMS_3405041_13]** 

07ef2601eb4b8d48778188dc043268475788f11216b9d43cd3301a14ea7c25e5

1. **Data Center Demand**  
   **Q:** Any updates on data center demand and potential load growth?  
   **A:** CMS Energy is experiencing strong interest in data center projects, highlighted by a **230 MW data center expansion** expected to be online by 2025, with the majority of load in place by 2026.  **[CMS_3380718_11]**  Michigan's attractive features, such as a temperate climate and robust infrastructure, make it appealing for data center development. There's potential upside to long-term load growth expectations due to a **strong pipeline** of both manufacturing and data center projects.  **[CMS_3380718_11]** 

2. **Electric Rate Case Increase**  
   **Q:** Should we expect a larger revenue increase request in the upcoming electric rate case?  
   **A:** Yes, CMS Energy anticipates a larger revenue increase request due to important capital investments aimed at improving reliability.  **[CMS_3380718_15]**  The company has made efforts to offset some O&M costs to balance customer impact.  **[CMS_3380718_15]** 

3. **Sales Outlook**  
   **Q:** How did sales perform across customer classes, and what's driving the outlook?  
   **A:** Sales were better than expected in Q1. **Residential sales increased nearly 1.5%**, with about two-thirds of that due to leap day effects.  **[CMS_3380718_9]**  **Commercial sales rose about 3.5%**, driven by sectors like agriculture and entertainment.  **[CMS_3380718_9]**  Return-to-office trends and a hybrid workforce are contributing factors. Industrial sales were flat, but there's optimism due to a robust pipeline of industrial opportunities.  **[CMS_3380718_9]** 

4. **Gas Rate Case and Settlement**  
   **Q:** What's the status and outlook for settling the gas rate case?  
   **A:** The staff's position is considered **constructive**, and CMS Energy is looking for opportunities to reach a settlement.  **[CMS_3380718_8]** **[CMS_3380718_16]**  The company is confident in the merits of the case, which focuses on a safe natural gas system and affordability for customers.  **[CMS_3380718_8]** **[CMS_3380718_16]** 

5. **Performance-Based Rates**  
   **Q:** Any updates on the performance-based rates process?  
   **A:** The process is progressing constructively, with metrics narrowed from about a dozen to **four benchmarkable metrics**.  **[CMS_3380718_12]**  A staff report is expected in May, and implementation may be a couple of rate cases away.  **[CMS_3380718_12]** 

6. **DIG Recontracting Opportunity**  
   **Q:** What's the update on DIG recontracting opportunities?  
   **A:** CMS Energy has **30%–35% open margin** in the outer years starting in 2026.  **[CMS_3380718_7]**  There is attractive inquiry for capacity, and the energy side is sold through 2028.  **[CMS_3380718_7]**  The company plans to provide updates in the next five-year plan and will continue selling down the open margin thoughtfully.  **[CMS_3380718_7]** 

7. **Attorney General's Participation**  
   **Q:** Should we expect a response from the Attorney General to the rate case filing?  
   **A:** CMS Energy anticipates participation from the Attorney General due to the political season in Michigan but remains confident in the merits of the case, emphasizing reliability and affordability.  **[CMS_3380718_14]** 

3b2c3804ff2e5789b15016afabbbca0fa10d92f4bc372198f427ba363ad4a6d3

1. **Increased CapEx and Rate Base Growth**  
   **Q:** What's driving the uplift in CapEx and rate base growth to a firm 7.5% CAGR?  
   **A:** CMS Energy is increasing its capital expenditure plan by $1.5 billion, primarily driven by incremental investments in electric reliability and clean energy projects. About half of the uplift is due to reliability-related investments, with the rest attributed to increased renewable investments approved in their '22 Integrated Resource Plan (IRP). This higher CapEx plan supports a rate base growth of **7.5%** CAGR over the next five years.  **[CMS_3371540_11]** **[CMS_3371540_12]** 

2. **Equity Needs Amid Higher CapEx**  
   **Q:** Will higher CapEx plans require additional equity beyond the $350 million per year after 2025?  
   **A:** Despite the increased CapEx, CMS Energy doesn't anticipate needing equity beyond the planned **$350 million** annually starting in 2025. This is due to strong cash flow generation, the ability to monetize over **$0.5 billion** in tax credits from the Inflation Reduction Act (IRA), and improved equity credit treatment from Moody's recent decision. These factors help offset the equity needs from higher CapEx.  **[CMS_3371540_12]** **[CMS_3371540_16]** **[CMS_3371540_18]** **[CMS_3371540_23]** 

3. **Moody's Increased Equity Credit**  
   **Q:** How does Moody's change in equity credit for subordinated notes impact CMS's credit metrics?  
   **A:** Moody's increased the equity credit for junior subordinated notes from **25% to 50%**, aligning with S&P. This change improves CMS Energy's FFO-to-debt ratio by about **50 to 60 basis points**, enhancing their credit metrics and providing more balance sheet flexibility amidst increased capital investments.  **[CMS_3371540_9]** **[CMS_3371540_16]** 

4. **Dividend Growth Rate**  
   **Q:** Is CMS Energy slowing its dividend growth rate to support capital investments?  
   **A:** CMS Energy plans to grow dividends at the lower end of its **6% to 8%** earnings growth target. This disciplined dividend policy aims to reduce the payout ratio to the low **60%** range, providing internal equity to efficiently fund the company's growing capital investment program.  **[CMS_3371540_18]** 

5. **Load Growth Expectations**  
   **Q:** What are CMS's expectations for load growth and contributing factors?  
   **A:** CMS Energy anticipates over **0.5%** load growth over the next five years, a positive shift from previous flat or declining forecasts. This is driven by increased manufacturing activity, including investments in semiconductors, batteries, and data centers. Notably, only two large projects (Gotion and Ford) are included in the current plan, suggesting potential upside from a robust pipeline.  **[CMS_3371540_14]** 

6. **Progress on Electric Rate Case**  
   **Q:** How is the electric rate case progressing, and what's the outlook?  
   **A:** CMS Energy reports that the electric rate case is progressing constructively, with positive indicators on reliability investments and support for mechanisms like the infrastructure recovery mechanism and undergrounding pilot. They expect a final order on or before **March 1**, anticipating a constructive outcome.  **[CMS_3371540_10]** 

7. **Renewable Energy Plan and Legislation Impact**  
   **Q:** How will new energy legislation and the Renewable Energy Plan affect future CapEx and rate base?  
   **A:** CMS Energy will file its Renewable Energy Plan in the second half of 2024, aiming to achieve **50% renewables by 2030** and **60% by 2035**. While the current five-year plan doesn't include capital investments from new legislation, future plans are expected to incorporate these, potentially increasing CapEx and rate base further in subsequent periods.  **[CMS_3371540_8]** **[CMS_3371540_11]** **[CMS_3371540_12]** 

8. **Cost Savings Impact on Earnings**  
   **Q:** How are cost savings contributing to earnings growth in 2024?  
   **A:** CMS Energy anticipates **$0.16** per share in cost savings in 2024, driven by approximately **$60 million** in CE Way-related savings and the reversal of higher storm restoration costs from 2023. These savings offset inflationary pressures and contribute to the company's earnings growth.  **[CMS_3371540_25]** 

9. **Palisades Nuclear Plant Revival**  
   **Q:** Does the revival of the Palisades nuclear plant affect CMS Energy's resource planning?  
   **A:** The Palisades plant revival does not impact CMS Energy's resource planning. The company is not involved in the project, and existing power purchase agreements are already in place with other entities. CMS Energy remains focused on its own clean energy initiatives.  **[CMS_3371540_12]** 

10. **Storm Review Process Update**  
    **Q:** What's the status of the storm review process and its implications?  
    **A:** The storm review process is underway, with an audit expected to be completed by **September**. CMS Energy is focused on improving reliability, as reflected in their increased capital investment plan and reliability roadmap. The outcomes of the review will be incorporated into future rate cases.  **[CMS_3371540_24]** 

bbc53df50d0cb7c7763870584275415e7c8705541e5bb94921086af596a03155

- **CMS Energy is experiencing strong growth opportunities in the data center and manufacturing sectors**, with a recent signing of a **230 MW** data center customer and continued strong interest from both hyperscalers and mid-scale data centers, leading to increased sales and economic development.  **[CMS_3394266_7]**
- **NorthStar is outperforming expectations**, with **DIG earnings up by $0.05 per share year-over-year**, benefiting from improved operational performance and new solar projects, contributing positively to CMS's financial results.  **[CMS_3394266_15]** ,  **[CMS_3394266_5]**
- **CMS is effectively managing costs**, executing on cost performance initiatives and leveraging cost management over the course of the year, enhancing financial performance despite challenges such as weather impacts.  **[CMS_3394266_6]** ,  **[CMS_3394266_15]**

d21c8e1dde52d806debbcd9de8077ec855f36d3e6cbb8e64cb3abeb8315052a3

- **Regulatory risk in obtaining higher ROEs**: CMS Energy is seeking to increase its Return on Equity (ROE) above the current **9.9%**, due to rising interest rates, but there is uncertainty about regulatory approval.  **[CMS_3362117_23]**  The company acknowledges that achieving higher ROEs is challenging despite making the case to regulators.  **[CMS_3362117_23]**
- **Uncertainty over sustainability of cost savings**: CMS Energy has achieved significant **O&M savings** this year, including a **10% reduction** in salaried workforce  **[CMS_3362117_16]** , to offset headwinds from weather and storms. However, the sustainability of these savings into next year is uncertain and difficult to quantify.  **[CMS_3362117_16]**
- **Execution risks in infrastructure projects**: The company faces potential delays and cost uncertainties in its infrastructure projects, including **undergrounding pilots** and **solar projects**.  **[CMS_3362117_11]** **[CMS_3362117_24]**  Issues with project timing and execution could impact its ability to meet investment and earnings targets.  **[CMS_3362117_11]** **[CMS_3362117_24]**

86f9f2540d49eaea80a5cb646d82e7813aec4ba29ac23c709baba8e754b7ad5e

- **Sustainable Operational Cost Savings:** CMS Energy has implemented significant cost reduction initiatives, including a voluntary separation program reducing their salaried workforce by roughly **10%**, leading to sustainable operational cost savings that will support earnings in 2024 and beyond.  **[CMS_3362117_16]**
- **Strong Demand for Renewable Energy Programs:** There is robust demand for CMS Energy's voluntary green pricing program, with over **400 megawatts** of contracted load, which continues to grow. This supports further investments in renewable energy projects, including new solar facilities, contributing to growth and aligning with clean energy goals.  **[CMS_3362117_19]**
- **Positive Outlook for Dearborn Industrial Generation (DIG):** CMS Energy sees opportunities for growth at DIG, with energy and capacity contracts in place through **2025** that are exceeding expectations. Upward pressure on energy and capacity prices enhances the value of these contracts.  **[CMS_3362117_10]**

13bc607a524ce65f6a7d62c0de28b41f60a467209594cbcb64d8f0c90a18322a

CMS Energy Corp (CMS)

Financials