CMS Energy (NYSE:CMS) reaffirmed its 2026 earnings outlook and introduced 2027 guidance while outlining plans to exit non-utility renewable development through its NorthStar business, redirecting capital toward regulated utility investments in Michigan.
President and Chief Executive Officer Garrick Rochow said the company is targeting completion of the NorthStar restructuring by the end of 2026. CMS plans to retain several Michigan-based assets, including Dearborn Industrial Generation, or DIG, small gas peaking plants, and four commercial solar projects. The retained assets generate cash flow and require limited additional capital investment, according to management.
“On a consolidated basis, this means nearly 100% of our earnings and future growth will be rate base driven within the utility,” Rochow said. He added that the change would simplify the business and support what CMS views as higher-quality growth.
Guidance Reaffirmed, 2027 Outlook Introduced
For the first half of 2026, CMS reported adjusted net income of $464 million, or $1.50 per share. The company maintained its full-year adjusted earnings-per-share guidance of $3.83 to $3.90 and said it remains confident toward the high end of that range.
CMS also introduced 2027 adjusted EPS guidance of $4.08 to $4.17. The range represents growth within the company’s long-term target of 6% to 8% annually from 2025 actual results. Management said the 2027 outlook already incorporates the NorthStar repositioning.
Chief Financial Officer Sri Maddipati said first-half results included a $0.23 per-share year-over-year unfavorable variance, primarily because the prior-year period benefited from liability-management actions that had already been contemplated in the company’s 2026 plan. Storm activity, less favorable weather comparisons and lower-than-normal cooling and heating degree days also affected first-half results.
New rates, net of investment costs, contributed $0.20 per share year to date, Maddipati said. The benefits reflected last year’s gas rate order, new electric rates that began in May, and continued renewable investments at the utility.
For the second half, CMS expects rates and net investment costs to contribute $0.22 per share, while operations and maintenance factors are expected to provide $0.25 per share of earnings support. The outlook assumes a constructive outcome in the company’s pending storm-deferral proceeding and normalized storm activity for the remainder of the year.
Financing and Utility Investment Plan
CMS said its $24 billion utility investment plan is expected to support 10.5% compounded rate-base growth. The company also identified potential additional investments in the latter half of its planning period, including a $2 billion utility renewable opportunity tied to its approved Renewable Energy Plan and a $1 billion electric-distribution reliability opportunity outlined in its regulatory roadmap.
Those opportunities are not included in the current capital plan or long-term growth outlook, management said during the question-and-answer session.
The company remains on track to complete its 2026 financing plan, which includes utility debt issuance and the remaining common-equity issuance under its at-the-market program. CMS expects to issue $700 million of equity in 2026 and said it has completed nearly $500 million of that amount.
Its current five-year plan assumes $3.75 billion of new equity, including about $3 billion after 2026. Maddipati said that, as cash is redeployed from NorthStar, CMS anticipates reducing planned equity issuance by at least $350 million. The company expects to provide a broader financing-plan update during its fourth-quarter call.
Management said DIG and the retained peaking and solar assets are expected to support cash flow and offset parent financing needs. DIG and the peakers are contracted in a manner similar to one another, while the retained solar projects are also on long-term contracts, Rochow said.
Data Center, Industrial Load and Regulatory Activity
CMS highlighted progress under its large-load tariff, including an agreement involving an extraordinary facilities agreement and a rate agreement for a prospective data center customer. The customer must still receive local zoning approval, and CMS said it will incorporate the associated load growth in its integrated resource plan, or IRP, scheduled for filing in September.
Rochow said the tariff is designed to ensure that new large-load customers bear the costs to serve them while protecting existing customers. He said each gigawatt of new large load could provide approximately $7.50 in monthly bill benefits for the average residential electric customer.
The company said it has also contracted roughly 135 megawatts of manufacturing and industrial load year to date. Management noted continued interest from technology, advanced-manufacturing and supply-chain companies seeking to expand in Michigan.
CMS filed an electric rate case in June seeking a $456 million revenue increase, a 10.25% return on equity and a 51.75% equity ratio. It also requested a two-year investment recovery mechanism to support electric-grid hardening and other customer investments.
In its gas business, CMS revised its requested revenue increase to $232 million and increased the requested equity ratio to 51.75%, aligning it with the electric case. The company moved its IRP filing from an earlier timetable to September to reflect the recent data-center agreement and updated load-growth assumptions.
On reliability, Rochow said CMS has improved from fourth-quartile performance to solidly in the third quartile and is approaching the second quartile. He said 92% of customers were restored within 24 hours or less during the first six months of 2026, while the company continues investments in tree trimming, grid hardening and reliability improvements.
About CMS Energy (NYSE:CMS)
CMS Energy (NYSE: CMS) is an energy company based in Jackson, Michigan, whose principal business is the regulated utility operations of its subsidiary, Consumers Energy. The company is primarily focused on providing electric and natural gas service to customers in Michigan, operating the generation, transmission and distribution infrastructure necessary to deliver energy to residential, commercial and industrial customers. Headquartered in Jackson, CMS Energy conducts its core activities within the state and is regulated by state utility authorities.
Through Consumers Energy and related subsidiaries, CMS Energy develops, owns and operates a portfolio of generation assets and delivers a range of customer-facing services, including electricity and natural gas supply, grid management, energy efficiency programs and demand-response offerings.
