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Consumers Energy, the major subsidiary of CMS Energy (CMS - Analyst Report) pledged its support for the economy of Michigan. The pledge came with a commitment to invest an additional $250 million in the state over the next five years. The company will use only small and medium-sized Michigan-based suppliers. The money will be used to fund projects related to equipment and services for renewable energy.

The utility's commitment to increase spending in Michigan follows the launch of new Pure Michigan Business Connect initiative by Governor Rick Snyder of the Michigan Economic Development Corporation. Not ignoring its peer company in Michigan, DTE Energy Company (DTE - Analyst Report) also pledged an additional investment of $250 million in the state.

Consumers Energy is already in the midst of a five-year, $6 billion capital investment plan for Michigan. CMS Energy’s regulated electric power operations in Michigan generate a relatively stable earnings stream. Thus growth prospects look robust for CMS Energy with a constructive regulatory environment along with steady recovery in the Michigan economy.

CMS Energy reaffirmed its guidance at adjusted earnings of $1.44 per share for fiscal 2011.  That's an increase of about 6% from fiscal 2010 adjusted earnings of $1.36. This is consistent with the company's long-term plan of 5%–7% annual earnings growth.

CMS Energy is making substantial investments in renewable energy, environmental quality, energy efficiency and other areas to continue to provide customers with safe, reliable and affordable service. The company also recently updated its renewable energy plan reaffirming the company's commitment to meet Michigan’s 10% renewable energy standard.

The company already is the largest supplier of renewable energy in Michigan. As of now 5% of the power supplied to its 1.8 million electric customers comes from renewable sources. Going forward the company plans to invest more than $6 billion in its utility operations through 2015, making it one of the largest investors in Michigan.

We maintain our Neutral rating on CMS Energy. The quantitative Zacks #3 Rank (short-term Hold rating) for the company indicates no directional pressure on the shares over the near term. In the near-term we would advise investors to focus on its Zacks #2 Rank (short-term Buy rating) peers like Avista Corporation (AVA - Snapshot Report) and Cleco Corporation (CNL - Snapshot Report).

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