Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Given the upcoming electric case, how is CMS Energy thinking about incremental construct improvements?
A: Garrick J. Rochow, President and CEO, emphasized the focus on improving reliability due to higher wind speeds and more frequent storm activity. The company aims to balance capital investments with affordability, utilizing mechanisms like infrastructure recovery and storm recovery in their rate cases. Rochow highlighted the importance of aligning costs with customer growth, especially with new loads like data centers.
Q: What are the first changes CMS Energy can implement under the new energy law, especially regarding the upcoming IRP update?
A: Rejji P. Hayes, Executive VP & CFO, mentioned that the current 5-year plan includes modest amounts of PPAs with a new financial compensation mechanism and enhanced economic incentives for energy efficiency. The broader opportunities for rate base growth will be incorporated in the 2026 plan following the Renewable Energy Plan filing.
Q: Can you provide an update on conversations around DIG and the recontracting opportunities?
A: Rejji P. Hayes explained that about 30-35% of the margin in the outer years of the plan is open, with attractive reverse inquiries for capacity. The company plans to sell down this margin gradually, maintaining some optionality given the favorable market dynamics in Zone 7.
Q: What is your reaction to the staff's starting point in the gas rate case, and what are your thoughts on reaching a settlement?
A: Garrick J. Rochow described the staff's position as constructive and expressed confidence in the merits of the case. He indicated a preference for settlement but affirmed readiness to pursue a fully litigated outcome if necessary.
Q: How is the sales outlook by customer class, especially given the better-than-expected performance in the first quarter?
A: Rejji P. Hayes highlighted growth in residential and commercial classes, with particular strength in agriculture, mining, and entertainment. He noted the impact of a hybrid workforce model contributing to sustained demand in commercial sectors.
Q: What are your expectations for data center demand and potential involvement in voluntary renewables plans?
A: Garrick J. Rochow expressed optimism about Michigan becoming more attractive for data centers, pending legislation on sales and use tax exemptions. He emphasized the strategic importance of ensuring cost allocation aligns with the growth in data center loads.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
