CMS Energy Corp. Q1 FY2025 earnings call

• Storm Response: CMS Energy's crews, dispatchers, etc. responded to historic storms in March-April, restoring customers safely.
• Michigan Regulatory Environment: Pleased with electric rate order in March, constructive staff position in gas rate case, and expected REP order by mid-September.
• Economic Development: Data center pipeline grew to nine gigawatts with 65% toward data centers, and manufacturing growth with secondary/tertiary benefits.
• Financials: Reaffirmed full-year guidance of $3.54 to $3.60 per share and long-term adjusted EPS growth range of 6%-8%.

In the first quarter, CMS Energy reported adjusted earnings per share of $1.02. The positive variance was due to absence of mild weather in 2024 and rate relief, partially offset by higher O&M costs. NorthStar is a small segment, ~5% of EPS mix. Financials showed adjusted net income of $304 million or $1.02 per share for Q1 2025.

• Reaffirmed full-year adjusted earnings per share guidance of $3.54 to $3.60.
• Long-term adjusted EPS growth range remains 6% to 8%.
• Anticipated normal weather to contribute positive variance, and regulatory factors to provide positive variance.

• Weather-related costs from storms, which impacted O&M expenses.
• Potential changes in the Inflation Reduction Act (IRA) and tariff impacts on renewable projects.
• Regulatory uncertainties in rate cases and renewable energy plan approvals.

Q: Focusing on NorthStar, what's the percentage of capital towards solar storage and how does IRA repeal affect capital allocation?

A: NorthStar is a small segment with no storage. If IRA repeal occurs, capital allocation to utility may increase.

Q: About the deferred accounting order on storm cost, when will it be approved?

A: It's an ex parte filing with no established timeline, but constructive conversations with commission.

Q: Thoughts on gas rate case settlement appetite?

A: Staff has a constructive starting position, open to settlement or full adjudication.

Q: How does economic development in Michigan impact energy supply needs?

A: Data centers and manufacturing growth create energy supply needs, evaluated in integrated resource plan to be filed in 2026.

Q: Risk of transferability of tax credits going away and countermeasures?

A: Could look at junior subordinated notes, additional equity, or shift spend mix via PPAs if transferability goes away.