CMS Energy Corporation - 5.875% NT REDEEM 15/10/2078 USD 25

Guidance reaffirmed (financial outlook strong): CMS Energy reaffirmed 2026 adjusted EPS guidance of $3.83–$3.90 (still expects to land toward the high end). 2027 adjusted EPS guidance reaffirmed at $4.08–$4.17, explicitly incorporating the NorthStar restructuring. Longer-term, it reiterates 6%–8% adjusted EPS growth toward the high end (~7% or better).

NorthStar restructuring progress (key driver of future earnings quality): Management said restructuring completion is on track by year-end and that >35% of NorthStar assets are either signed (purchase/sale agreements) or closed. They highlighted that after restructuring, they expect ~nearly 100% regulated utility earnings growth after 2027 and reduced parent funding needs by over $500 million within the current 5-year plan. Retained items (they keep DIG + small gas peakers + 4 commercial solar projects) remain cash-flow positive and support the growth strategy.

Michigan IRP filing—big clean/utility capex opportunity (and what’s “surprising”): CMS filed Michigan’s long-term IRP through 2040, planning 15.8 GW clean energy (vs 10.8 GW already approved), plus 4.1 GW battery (up from 0.85 GW), and 1.4 GW new simple-cycle gas to replace aging oil/gas peakers for reliability. They framed ~$27B of capital opportunity tied to new clean resources, storage, and gas generation. Importantly, they emphasized earnings differentiation via PPAs with a Financial Compensation Mechanism (FCM): $125M beginning in 2031 rising to ~$195M by 2040 (assuming 50% ownership).