Back to top

Image: Shutterstock

CMS Energy (CMS) Arm Set to Invest $170M in Natural Gas System

Read MoreHide Full Article

.CMS Energy’s (CMS - Free Report) principal subsidiary, Consumers Energy, recently received a regulatory nod to make $170 million worth of investment in its natural gas system. This comes as part of the company’s Natural Gas Delivery Plan, through which Consumers Energy aims to invest $1 billion annually to modernize the system.

The latest approval should take Consumers Energy a step ahead toward achieving its recently upgraded Clean Energy Plan, wherein it pledges to provide 100% coal-free electricity to its customers by 2025.

Details of the Investment

With the help of the recently approved investment, the company will replace natural gas pipes dating back to the 1940s, thereby promoting safe, clean, reliable and affordable energy for its customers. The latest investment will support Consumers Energy in leading Michigan's decarbonization efforts as the role of natural gas evolves in the coming years.

Following the latest ruling, changes to customer bills will take effect in October 2022.

CMS’ Renewable Goals

In a bid to enhance its renewable energy portfolio, CMS Energy announced its decarbonized goal, in March 2022, to spur the greener environment movement in Michigan. In particular, the company aims at attaining net-zero greenhouse gas (GHG) emissions from the entire natural gas production and delivery system by 2050.

The company also seeks to modernize and upgrade its natural gas system to achieve net-zero methane emissions from its operations by 2030. Additionally, as part of the fleet transformation initiative, CMS Energy plans to power one million electric vehicles in the communities it serves by 2030.

All these initiatives, including the latest upgraded Clean Energy Plan, will bolster CMS Energy’s position in the booming clean energy market.

Peer Moves

The heightened awareness to decarbonize the environment resulted in most utilities committing to a carbon-neutral goal or equivalent.

For instance, Duke Energy (DUK - Free Report) aims to reach its target of net-zero carbon emissions from electric generation by 2050.  The company has already lowered its carbon emissions by more than 44% from 2005 to 2021 and is now expanding its 2050 net-zero goals to include Scope 2 and certain Scope 3 emissions.

Duke Energy currently boasts a long-term earnings growth rate of 6.1%. The Zacks Consensus Estimate for DUK’s 2022 sales implies an improvement of 6.6% from the 2021 reported figure.

In February 2021, American Electric (AEP - Free Report) announced new intermediate and long-term CO2 emission reduction goals, based on the output of the company’s integrated resource plans. The intermediate goal is an 80% reduction from the 2000 CO2 emission levels from the company’s generating facilities by 2030 and the long-term goal is net-zero CO2 emissions from its generating facilities by 2050.

American Electric boasts a long-term earnings growth rate of 6.2%. The Zacks Consensus Estimate for AEP’s 2022 sales suggests an improvement of 8.4% from the 2021 reported figure.

DTE Energy (DTE - Free Report) remains committed to implementing a carbon emission reduction of 32% by 2023, 50% by 2030 and 80% by 2040 from the 2005 carbon emissions levels at its electric utility operations. The company expanded this commitment by announcing a net-zero carbon emission goal for DTE Electric and DTE Gas by 2050.

DTE Energy boasts a long-term earnings growth rate of 6%. DTE stock has gained 4% in the year-to-date period.

Price Movement

In the past year, shares of CMS have rallied 10.1% compared with the industry’s growth of 5.8%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank

CMS Energy currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Published in