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How CMS Is Positioned for Growth on Stable Utilities and Renewables
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Key Takeaways
CMS Energy generates over 95% of earnings from regulated utilities, providing stable and predictable revenues.
CMS plans $20B in capital spending through 2029 to modernize infrastructure and expand clean generation.
CMS faces coal ash disposal costs, with up to $240M in related capital spending expected through 2029.
CMS Energy Corporation’s (CMS - Free Report) strong focus on infrastructure modernization and renewable energy investments is likely to support its performance, complemented by the stability of its regulated utility operations in Michigan.
However, the company faces risks related to unfavorable expenditures related to the closure of solid waste disposal facilities for coal ash.
Factors Acting in Favor of CMS
CMS Energy benefits from stable and regulated utility operations in Michigan. More than 95% of the company's earnings come from its regulated electric and gas utilities, which provide a low-risk, stable revenue stream.
CMS is investing heftily in infrastructure upgrades, replacements of old infrastructures and clean power generation to improve customer reliability and resiliency of its infrastructure. To achieve this, the company plans to make capital expenditures worth $20 billion through 2029. It has been rapidly expanding its renewable generation portfolio in recent times.
The company plans to add 9 GW of solar and 4 GW of wind to its generation portfolio over the next two decades. It also plans to add more than 850 MW of battery storage by 2030. Currently, more than 15% of the electricity Consumers Energy supplies to customers comes from renewable energy sources. Under its renewable energy plan, Consumers Energy has acquired three wind generation projects, totaling 517 MW of nameplate capacity, since 2020. Consumers Energy’s updates to its renewable energy plan include up to 9,000 MW of both purchased and owned solar energy resources and the addition of up to 2,800 MW of new, competitively bid wind energy resources.
Challenges Faced by CMS
The company incurs significant costs related to the construction, operation and closure of solid waste disposal facilities for coal ash. Consumers had earlier estimated that CMS will have to incur capital expenditures of $240 million from 2025 through 2029 to comply with these regulations. This might impact CMS Energy’s bottom line.
Other Utilities’ Focus on Renewable Energy
In the United States, electric utilities are evolving beyond generating income due to the shift to renewable energy. The utilities leading this change are ideally positioned to expand gradually, offering investors a low-risk avenue to participate in the expanding clean energy sector.
Along with CMS, certain companies from the same industry, such as Alliant Energy (LNT - Free Report) , PPL Corp. (PPL - Free Report) and Dominion Energy (D - Free Report) , are also focused on renewable portfolio expansion.
Alliant Energy plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to the generation portfolio. The company expects long-term capital expenditures of $13.4 billion during 2026-2029.
Investments are also focused on repowering or refurbishing wind projects. Through systematic investment, LNT aims to add 1,000 MW of Energy Storage and 1,100 MW of new renewables to its portfolio to meet the rising demand in its service territories.
PPL’s carbon emission reduction target is presently following the objective to meet the below 2-degree Celsius scenario. PPL plans to achieve its carbon emissions target of 70% by 2035 and 80% by 2040 (from 2010 levels).
PPL will do so through the introduction of new carbon capture technology and addition of more renewable sources to the generation portfolio. It also targets to become carbon neutral by 2050.
Dominion Energy plans to invest nearly $50 billion through 2029 to further strengthen its operations.
D’s long-term objective is to have more battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. Organic projects and acquired assets will further expand the company’s clean energy portfolio.
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How CMS Is Positioned for Growth on Stable Utilities and Renewables
Key Takeaways
CMS Energy Corporation’s (CMS - Free Report) strong focus on infrastructure modernization and renewable energy investments is likely to support its performance, complemented by the stability of its regulated utility operations in Michigan.
However, the company faces risks related to unfavorable expenditures related to the closure of solid waste disposal facilities for coal ash.
Factors Acting in Favor of CMS
CMS Energy benefits from stable and regulated utility operations in Michigan. More than 95% of the company's earnings come from its regulated electric and gas utilities, which provide a low-risk, stable revenue stream.
CMS is investing heftily in infrastructure upgrades, replacements of old infrastructures and clean power generation to improve customer reliability and resiliency of its infrastructure. To achieve this, the company plans to make capital expenditures worth $20 billion through 2029. It has been rapidly expanding its renewable generation portfolio in recent times.
The company plans to add 9 GW of solar and 4 GW of wind to its generation portfolio over the next two decades. It also plans to add more than 850 MW of battery storage by 2030. Currently, more than 15% of the electricity Consumers Energy supplies to customers comes from renewable energy sources. Under its renewable energy plan, Consumers Energy has acquired three wind generation projects, totaling 517 MW of nameplate capacity, since 2020. Consumers Energy’s updates to its renewable energy plan include up to 9,000 MW of both purchased and owned solar energy resources and the addition of up to 2,800 MW of new, competitively bid wind energy resources.
Challenges Faced by CMS
The company incurs significant costs related to the construction, operation and closure of solid waste disposal facilities for coal ash. Consumers had earlier estimated that CMS will have to incur capital expenditures of $240 million from 2025 through 2029 to comply with these regulations. This might impact CMS Energy’s bottom line.
Other Utilities’ Focus on Renewable Energy
In the United States, electric utilities are evolving beyond generating income due to the shift to renewable energy. The utilities leading this change are ideally positioned to expand gradually, offering investors a low-risk avenue to participate in the expanding clean energy sector.
Along with CMS, certain companies from the same industry, such as Alliant Energy (LNT - Free Report) , PPL Corp. (PPL - Free Report) and Dominion Energy (D - Free Report) , are also focused on renewable portfolio expansion.
Alliant Energy plans to invest substantially over the next four years to strengthen the electric and gas distribution network as well as add natural gas and renewable assets to the generation portfolio. The company expects long-term capital expenditures of $13.4 billion during 2026-2029.
Investments are also focused on repowering or refurbishing wind projects. Through systematic investment, LNT aims to add 1,000 MW of Energy Storage and 1,100 MW of new renewables to its portfolio to meet the rising demand in its service territories.
PPL’s carbon emission reduction target is presently following the objective to meet the below 2-degree Celsius scenario. PPL plans to achieve its carbon emissions target of 70% by 2035 and 80% by 2040 (from 2010 levels).
PPL will do so through the introduction of new carbon capture technology and addition of more renewable sources to the generation portfolio. It also targets to become carbon neutral by 2050.
Dominion Energy plans to invest nearly $50 billion through 2029 to further strengthen its operations.
D’s long-term objective is to have more battery storage, solar, hydro and wind (offshore as well as onshore) projects by 2036 and increase the renewable energy capacity by more than 15% per year, on average, over the next 15 years. Organic projects and acquired assets will further expand the company’s clean energy portfolio.