CMS Energy Corp Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Durgesh Chopra - Evercore ISI Institutional Equities - Analyst : I appreciate all the commentary around tariffs and IRA. I just -- one question was focusing on NorthStar. Maybe just -- can you remind us what percentage of capital? I appreciate it's small or of capital is going towards solar, storage. And then just given the IOA discussion and repeal risk, do you kind of reprioritize that capital, potentially maybe switch that with higher regulated capital? Your comments around safe harboring, do those apply to NorthStar as well as you try to kind of secure those tax resets into the future?

Question: Durgesh Chopra - Evercore ISI Institutional Equities - Analyst : Very helpful. A lot of flexibility there sounds like. And then just quickly, Rejji, the deferred accounting order on the storm cost, have you guys done that before? Sorry, I should know, but I don't. Maybe just remind us if you have done that before? And if not, like what are sort of the procedural steps here? Is there a time line that the commission is kind of sort of rule this on by? Or is this just a one-off type of went and there's no set procedural schedule here?

Question: Shar Pourreza - Guggenheim Partners - Analyst : How are you thinking about the execution of the financing plan, just given that optical of equity needs is resolved through the hybrid? Is that -- is there kind of more execution to come in '25? Or is there an efficient financing that unlocks like a CapEx pull forward or any other opportunity in the near term?

Question: Shar Pourreza - Guggenheim Partners - Analyst : Yes. Understood. Understood. And maybe a higher-level question on -- in terms of your energy supply needs. How are those evolving, especially as you get feedback to the R&D process? Is there more dispatch generation needs that you see kind of going into the next IRP cycle? And do you think that there's a better case for kind of like a big buy-in into the opco? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:30PM, CMS.N - Q1 2025 CMS Energy Corp Earnings Call

Question: Shar Pourreza - Guggenheim Partners - Analyst : Okay. Understood. Got just a question around storms again. As you're kind of noting the impact of the offsets in the quarter, do you anticipate those to be recurring? Or would those potentially unwind with that potential deferral filing?

Question: Jeremy Tonet - JPMorgan - Analyst : I just want to pick out with the gas case -- just wanted to pick up with the gas case. And given what's come out so far, the appetite for settlement or just -- any other thoughts at this point? I know you said you'd be happy going either way, but just wondered any incremental color you could provide?

Question: Jeremy Tonet - JPMorgan - Analyst : Got it. No, that makes sense. I just want to pivot to a smaller point, if I could, deferral -- that's baked into the guide right now. I just want to be clear on the treatment there.

Question: Jeremy Tonet - JPMorgan - Analyst : Okay. Got it. That's very helpful. And just a last one, if I could. As it relates to ITC's unregulated part of the business, what's the magnitude of earnings exposure in your plan here? And really, if you could outline a bit more how tax equity impacts this? And any other relevant considerations and how potential tariff risk at the project level could influence growth here? I know you touched on it a bit before, but I just wonder if you can flesh out those points a bit.

Question: Jeremy Tonet - JPMorgan - Analyst : No, that's helpful. I'll leave it there.

Question: Julien Dumoulin-Smith - Jefferies LLC - Analyst : I hope I get a candid response from Garrick as earlier here. Just with -- I think we're developing a new pattern. Just on economic development, I'd just love to understand how you guys are thinking about them. I heard the comments on the call with respect to data center activity and ongoing development year-to-date subsequent to the legislation. But in parallel, I also note the Goshen developments from the county board here, how are you thinking about what's included in the 900 megawatts of demand in the current plan? Are there puts in that? Or is it still kind of static pending some more formal updates here? Just to understand how you think about both the positives

Question: Julien Dumoulin-Smith - Jefferies LLC - Analyst : Yes. No, absolutely. Actually, just to clarify that last piece since you bring it up, just with the tariff you alluded to potential settlement, certainly a possibility in other states as well. Could that be paired up with a more formal commercial arrangement? Is that because you get the clarity on the tariff, would that be sort of the catalyst to announce any larger commitments here?

Question: Michael Sullivan - Wolfe Research - Analyst : Just wanted to ask quick on how you're thinking about the risk of transferability potentially going away. I think you've given us some numbers on what you embed there in your plan, but just what that scenario would look like if you were to lose the ability to transfer tax credits?

Question: Michael Sullivan - Wolfe Research - Analyst : Helpful. And just to double check the $700 million number from the year-end call in terms of what's in the plan is still good?

Question: David Arcaro - Morgan Stanley - Analyst : This is Alexman for Dave. So starting with the farm tracker, could you talk about the strategy going forward to get it approved? Is there any specific changes you want make to address the pushbacks?

Question: David Arcaro - Morgan Stanley - Analyst : Got it. And back to the data center demand in Michigan, did you see a big change in interest after the state approved the tax exemptions late last year?

Question: Travis Miller - Morningstar Inc. - Analyst : On the electric rate case, I wonder if there were any lessons learned or aside from the headline numbers, anything in the case decision that you'd like to go back for or you hoped to get anything like that? You mentioned the storm tracker, but anything aside from that?

Question: Travis Miller - Morningstar Inc. - Analyst : Okay. That's great. I think we all have 10.25% on the wish list. So the REP, when you get that September ruling, what's kind of the next step? Would there be any immediate, I guess, disclosures or changes potentially in the capital plan? Or is that something that's going to evolve as you do perhaps RFPs or some other type of solicitations along the way? Anything that's going to happen in September or October after the decision?

Question: Gregg Orrill - UBS Securities LLC - Analyst : Just the -- I wasn't quite sure I understood what the $0.04 impact in the balance of the year related to the storm accounting order was? Sorry if I missed that.

Question: Andrew Marc Weisel - Scotiabank Global Banking and Markets - Analyst : Good luck settling the gas rate case. So if you make a five timers club, like Saturday Night Live, I think you get one of those cool black wearing the jacket.

Question: Andrew Marc Weisel - Scotiabank Global Banking and Markets - Analyst : Just want to clarify, I think you kind of just answered this on the last question, but to clarify, are you all ready in cutting mode after that storm? Or are you just reminding us of your proven ability to do that?

Question: Andrew Marc Weisel - Scotiabank Global Banking and Markets - Analyst : I guess my question is, should this deferral be approved which, of course, is a good situation, what would you do then? If you're already cutting costs, then you get the good news of getting this approved, what happens? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:30PM, CMS.N - Q1 2025 CMS Energy Corp Earnings Call

Question: Andrew Marc Weisel - Scotiabank Global Banking and Markets - Analyst : Yes, it does. Given the weather challenges, it's been a while since you were in invest mode as opposed to lean mode. But yes, that would be a good situation. Okay.

Question: Andrew Marc Weisel - Scotiabank Global Banking and Markets - Analyst : I think I -- yes. Kind of like the 10.25%. My other question, I think I answered this at storm a few years ago. What breed would you give yourselves in terms of reliability from the storm? I know, obviously, it's been a focus and the Liberty audit came out last year, but how would you evaluate the performance for the storm?

Question: Sophie Karp - KeyBanc - Analyst : Yes, most of my questions have been answered, but maybe I can just ask a higher-level question on the economy in Michigan. I guess the unemployment rate which was a little elevated for the state. What are you seeing from your customers, if any, in terms of what are they saying about the activity? Are they adjusting to the new really with the tariffs and everything else? Any color would be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. APRIL 24, 2025 / 1:30PM, CMS.N - Q1 2025 CMS Energy Corp Earnings Call