- Earnings call transcript Q3 2022

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Operator

Good morning, everyone, and welcome to the CMS Energy 2022 Third Quarter Results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the Investor Relations section. This call is being recorded. After the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time. reminder call will p.m. today, a of a Just conference this beginning Instructions] that be there rebroadcast [Operator at XX:XX Time, Xrd. November running Eastern through This available and in being Investor presentation Energy's the CMS website is section. Relations is also on webcast would this the call to over At like turn Mr. to I time, Sri Investor Maddipati, President and and Finance Vice Treasurer of Relations.

Sri Maddipati

our and Maxine. us Chief are President SEC me President the to measures. and Financial appendix today. these measures Executive website. measures Executive actual Good other our and results in and Chief filings Garrick are everyone, to directly our are to Hayes, differ included risks and thank and the Reconciliations presentation statements, risks of morning, you, uncertainties. This With most presentation for Thank comparable non-GAAP information the materially. GAAP you Please joining and Rejji Officer; that includes contains cause regarding factors refer on for Officer. which to could Rochow, This posted Vice forward-looking subject more also

turn Now over Garrick. to call the I'll

Garrick Rochow

with specifics, thesis, pleased of want thank on time. But and I'm us before today. to the the get test the results for which for I continues into joining to Sri, you, quarter start year-end. investment everyone, to and Thanks, our the with simple path I stay

leading This to where put committed our we You've seen action. clean this results. remain in our calls firmly and is the It words meetings and energy you've works. seen We transformation. into the

deliver the the have to on clear a point, we proof QX construct I a energy leading As clean was mentioned by supported evident the approval commitment. our of IRP call, our on pathway that regulatory

we customers. put waste, for our to year, our by Way keeping out. critical take Way. and the service to fueled affordable take performance anyone of in ability business. delivering and is thesis against financial million up the CE commitment This our driven is our to cost eliminate are us by to investment track Our The of our waste $XX O&M out CE operational on I

of Michigan. only but regulatory And top-tier evidence gas feedback Another critical we not rate in is electric our case, our IRP, backdrop Michigan. pending quarter, this Michigan key which further our I'm rate territory. about QX, constructive In we investment enough received we regulatory in element on we the the settled case. our delivered the of service health of attractive is both of our A talk diverse part impact environment. growth pace don't in and thesis, new and our about excited

electric battery Just provide expected the headquartered in heart of CHIPS August, Hemlock semiconductor In our Governor an they at to Michigan's territory. Act, for Whitmer is Biden Semiconductor this $X.X over example month, global vehicle our the state. Michigan many states, billion jobs X,XXX boost manufacturer add to here industry. Together, will other its joined manufacturing of a U.S. in selected the bolster chip expansion of governor project the Goshen, leadership production over investment. announced implementation the This another announced that domestic onshoring and within of and highlighting which directive service executive President guide

robust been In largest Also in expansion. semiconductor at produced me investment add from has in already jobs the broken perspective. its the XXX facility on the into plans expansion the SK of new of efforts, our for Nearly now manufacturers bolstered are state. growth. in of XXX here year-to-date, supported over the project state. Ground and you customers expanding territory. competitive the by that are million the Let to the one can by economic put we agreements expected operation. and over drive million investment to right $XXX to highlights and of XXX innovative that or These made polysilicon translates ships which world's rates the operation, the in manufacturer grow development slide, is secured is in energy-intensive jobs growth see Hemlock are service world. roughly to map collaborative XX bringing Hemlock $XXX third of wafer From This one load and Michigan. announced Siltron, The quarter. over to policy, and is polysilicon on working megawatts a continue September, of which

just long-term investment office, customers. for load and and Corporation see Governor's residential Economic grow made continue for Michigan the to compete, business. possible to but with Development jobs. help industrial, work ultimately Michigan Michigan more a economic few not commercial These tailwinds seen it relief commission we've provide are bill of and attract and has many across that win Our our the will and the new all only legislature,

customers. for robust of solar PPAs. both in for Our benefit energy as our gas will recently for and lot as drive strong versus lowers We Energy. Production renewal Inflation solar, wind our provide certainty legislation. catalyst IRP well renewables within The for and renewable electric differentiator projects our is Michigan's a CMS of both extension our portfolio projects standard. the lowering to tax XXX constructing supporting remaining of of tax credits our which clean a transformation, utility-owned this meet decarbonize for cost we passed and and of economic includes backlog wind, systems is to cost competitiveness key Act megawatts see solar for credits are costs X gigawatts commitment for Reduction new deployment The another

cost storage able in this has of As greater competitiveness will across the provide site storage investment to cost rate The IRP we future a build own enabled strategically base lower as grid. credit solar investment. portion greater we're to and us scale, flexibility tax for

of increase the remainder decade. material minimum providing XX our in the annual credit, cost could the the with XXXX. alternative in of and beginning through expect do XXXX, plan. IRP Our tax of impact cost the million XXX use $XX solar storage, not savings deductions reduce the tax Also, new and of roughly versus includes or tax through accelerate megawatts we a of XX%, megawatts of storage battery advantages battery These

Michigan. commitment helps program. drives clean a is of legislation this line, the It across more transformation and Bottom our this pricing grow great supports savings. growing It's the All customers green to our tailwind a with voluntary to board. energy our

we've per of share $X.XX in per Now numbers. into share earnings we're of of adjusted $X.XX confidence raising get and the year, delivered to Year-to-date, to end this With $X.XX per let's remain to the ahead $X.XX share. bottom $X.XX our from guidance plan.

we And are of be we XXXX to revised to XXXX, preliminary the midpoint year initiating which X% off expect in of a rebase and This always of higher guidance per we've sector. actual growth high differentiates remember, our earnings share, compounding our full end that $X.XX For of to $X.XX our us the reflects of growth. others X% the our guidance quality guidance, toward and from range. brings you

time. Our to refresh update targeted XX% long-term call of next over with X% as the on our of early a capital on an remains plan ratio our year. with X% payout guidance, provide dividend about growth a X-year QX We'll you at well as

brings Lastly, remainder will we slide. targets weeks, and outlook a for last are our and year, confident in Michigan the deliver both the to In few across state. to which my me financial our have elections the of our operational ability

whoever for as we results decade see We'll holds legislature. work the the for also race join will have a people the of off with effectively the Whatever governor. outcome, New it. will we

deliver conditions, before. financial regardless two us You've We heard it of decades say nearly performance. industry-leading of

count can Energy You that. CMS on for

Now offer the over to turn call Rejji I'll to detail. additional

Rejji Hayes

you, everyone. And good Thank Garrick. morning,

the comparable on healthy favorable versus state. details provides achieve throughout per of X weather, delivered strong year, our the year-to-date, the have Garrick noted, ahead $X.XX a performance versus share largely financial our more period per share, us XXXX. the financial we territory of are including year-to-date we have and well XXXX, storm million conditions continuation by service net in activity The $X.XX waterfall As income $XXX to chart economic XXXX. key our To the drivers delivered more and performance results in of in adjusted objectives plan Slide on third of us quarter up keeping normalized our or driven elaborate, positioning in

Garrick to has from revised which solid adjusted guidance, increase lower in year-to-date XXXX the driven performance $X.XX As reflects an $X.XX. end range the our mentioned, our EPS of

adjusted EPS to to narrowed raised and $X.XX. now XXXX $X.XX has our So been guidance

favorable positive variance. of the variance, primary year-over-year be driven positive of per to $X.XX continue largely noted, our share driver to sales by As weather, equating

expense months negative O&M share expense rate Our by were driven that versus versus planned operating partially comparable in by strong customer increase initiatives, per lower to sales $X.XX our the in XXXX XXXX. as tune in decarbonization aforementioned rates anticipated. service largely by the partially offset was is of embedded of and offset increases variance period safety, first restoration in year-over-year noting of maintenance X and the expense, the reliability worth O&M are to It improve of which or

reflects year-to-date our of of of business, Lastly, per preferred in select $X.XX the bucket and parent electric to items. slightly attributable higher final dividend positive non-weather from stock in share the a and sales load offset regulatory the drag strong variance industrial commercial continued our utility by the

we good guidance full to to year revised achieve range. As look we EPS our the feel the fourth quite quarter, about path glide

with and the constructive versus implementation per which property positive comparable stated plan such XXXX XXXX. taxes As year. impact we also October are these of our $X.XX the to from share are assuming $X.XX the rate as estimates quarter of - have per associated We're of of And X settlement gas normal rate relief assuming a we rates about we weather, estimate case in for investment-related earlier costs always, this fourth will of period positive expense. versus variance attributable also depreciation, interest new share net

assumes such course the versus in given said a grid. the management vegetation system XXXX, reliability XXXX And I'll quarter most focus improving to measures spend to of in key reduce plan for addition record for fourth level note customer management, on our that vegetation we're effective expense of In increased programs the O&M our outages. of our on as one cost,

which XXXX. we share our $X.XX for positive the the assume normalized the We to non-utility assumptions to business for nets the assumptions per usual conservative To out in close also load comparable utility. activity, of variance versus benefit our weather at expect to from normalized XXXX, remainder continue storm and period

$X.XX level to share, strong variance our highlighted also performance given chart. to contingency negative non-utility the per assumptions a maintained with load our and equates when $X.XX a have healthy coupled in of year-to-date [indiscernible] We which

three year, we which and heading delivering XXXX in substantial into the As such, beyond. investors in and customers of confidence financial for our the flexibility have final increases months

of call that Turning at coupon financings below with to on $XXX at weighted of year for have well not approximately did report indicative any the completed of share. in plan we we priced the issuances during average plan for levels price I'm current while nine. environment. equity million a opportunistically successfully \ And $XX year, our $XXX weighted priced to is per average at this X.X% financing the the pleased quarter the Slide million of XXXX debt our financing planned contracts at our utility parent a which forward

financing locks on recently half parent execution of pending of timing generation in timely acquisition terms natural needs sheet. the accordance will The Our the new occur approved and with the the of first concurrent for covert balance forward resource gas the with attractive Staying equity facility. the settlement of plan. equity XXXX integrated forward our the the largely in of in acquisition

we'll the financing have conditions say, our the opportunities continue use to in a market needless lock winter future attractive for at strong move into commercial try paper. And we terms which liquidity utility. supplements to season, monitor to we of position, to preserved As heating

to which outside XXXX at in exposure interest parent of virtually or we financings statement no and rate rate it's utility, volatility. from have largely debt planned maturities that Lastly, insulates highlight income our the important the no floating future

Kim fund financing in our plan opportunistic Please uncertainty call back with of will Instructions] I'll cost very customers the and electronically. go from question the a Insoo Goldman be cost-efficient lines comes while first session Rejji. to enabling [Operator turn benefit over to Maxine much, conducted our Our manner The us a reduces you that, And for Sachs. prudent question-and-answer limiting cost the investors. for strategy Our structure, capital Thank in Q&A. to open ahead. from

line Your open. now is

Insoo Kim

Yeah, thank you. for Thanks the update.

been and a of Just about first process. Michigan mode recent [ph] you the the docket store be indication us at for could where had you've [ph] of opening Could me give commission head's here? just the give think there's just conversation at with kind an give question, – potential the conversations of lot range of a the the of their I what outcomes

Garrick Rochow

couple this. Insoo, Yes. Thanks, of your for things question. on A

just a space. is things electric longer-term Lake due change. performed We also is to see understand, a great do the reliability one weather I the during storms. Michigan resiliency efforts The think again, supportive And here wind part And the but increasing a see well in really climate we real speeds do. in to what some it's been important and to to and the had little important recognize in does here of and then attention. it's trend Michigan think across more to investment There's we of opportunity Michigan I August bottom particularly is has the more of our there's storm. in media this that's and commission the storm. many catching Lakes to case, And in the line rate impacts But resiliency.

here commission can company terms of to aligned Again, the and work And what really we this in think so both as reliability resiliency. I the we collaboration where well we're I in need and are do to. view a

view path I create for customers. improve opportunity those that really an and where our So as are it opportunities to the

Insoo Kim

set Is we line a more on clarity there from time all this? the of on should outcome have when

Garrick Rochow

as the year of Xth. is effort. here that I place would imagine And again, of effort collaborative fiscal in a want thing. There over audit same XXXX. that's much I first We the takes due the November see a

really have place right the sure to right have they're the make it's investments and We and at that all goal same measures speed to goal, aligned achieve the and pacing. and in we

Insoo Kim

range that it you Should 'XX think end? be thank embedded we I could guidance all last acquisition and to what upper potential the of potential pointing a from on Thanks. items could and Covert end. there? in that And My it. preliminary even Got the financing the that just upside question, upper if guess, from for deviate

Garrick Rochow

back on going in think the bigger short I'm of financing to and piece. But Yeah. answer is step is Covert The yes, picture and here. the that just

a and we company. about think so how as this And how I about think this

So this we've for sector. the to across that end. we a guidance differentiates I and off X%, here industry-leading high offers the what's then toward is premium and XX financial this rebase of about think expect We years really and X% doing a And And that us, frankly, premium a actual. and strength of unique us there's think performance. been is again, we

So we do time and this again. time

where sugar the the highs. high continue It's to in we're to long-term not we're a play towards going so And deliver end.

at We feel guidance an one as is So legislators everyone like we've customers, this offered investors. to more I about stakeholders you, want XXX this. our feel today XXX a thing understands, as and good. and important too, the sure balance here I good regulators of on that balance, well our to other make

Insoo Kim

much. Got it. so Thank

Operator

from next comes go Our question Partners. Please from Shar Guggenheim ahead. Pourreza

Your line now is open.

Shar Pourreza

Hey, guys. morning. Good

Garrick Rochow

good Hey, Shar.\ morning,

Shar Pourreza

Morning, morning.

guess, may lower equity you bit that to prepared. any can sort you to any And the impacted as do on I the IRA little of in alluded IRP. rate Garrick, So see base? I benefits do your potential renewable think sort plan I have in customer have embedded spending? to of avoid increase equity you opportunity have just a solar, guess, question the the stands? currently particular, any tax thoughts a revision trigger in could we how it in and mean a where I tax clearly, And [ph], around or does you it it cost highlighted guys but of of

Garrick Rochow

Rejji This beneficial industry for with here. beneficial for this our team and tag our I'll is really customers. IRA

a storage that. to as And we in gigawatts, we've five our go the laid to to three plan. so And out build, IRP it's revise know, years nice every you X

this per term, the of our benefit customers. production I the credit to IRA tax plan. the $XX in right versus so And the That's in year flowing million really see short

baked our keeps and again, that, to low, $XXX million that. already So in incremental of this customers' remember, over had IRP costs frankly. this that, And is savings

to IRP take five of feel IRA, again, this my to in in there's our at renewables versus potentially you I the So this and Again, with other that. with have We'll upside three opportunities look forward. as Rejji, advantage about refile good solar our Poland I file, we'll in pulling opportunities In to PPAs. terms tailwind comments, that. years. - storage terms And to respect may forward, real a have additional comments. utility-owned a storage of see know

Rejji Hayes

only would of a I comments couple sure. add here. Yeah,

other point bring we calculation, you're proliferation vehicle The of just benefit, that into and electric hours the too, obviously, well the welcome. of is continuation credit tipping vehicles, Michigan, Michigan, a denominator in with certainly accelerating the the well, which for benefits in that tax in that as be because rate would kilowatt would growing catalyst bring rate electric could

a into any to term. With funding should be, tax that our there's not in are strategy. equity presupposing question respect financials your around incorporated there benefit we point, at So our some financing, longer

there's So credits. about still type I been the there's guidance think required develops see what the IRA, market of IRS as and We talk certainly more a equity some we'll the of result presupposing from do lot moment, transferability a at not of But transferability we're so any our can credits. the in have credits monetize of we at assumptions. tax financing point. of

Shar Pourreza

you. Got Okay.

wait out headroom? savings, that I'm of to in. figure plays the we does to incremental for guess filing? have Or customer shortage have quick being just capital right? at of million of follow-up. a rates. rates It's of function growth Sorry, had kind guess allow do a IRP trying just always bills I you you that of the and just spend $XX that customer additional forward a been guys how a because opportunities, pull It's some I incremental in the never have guess, that governor, I

Garrick Rochow

We we've IRP It's out dollars work, at think can a the capital Yeah. really afford. we look at I our as the at we business for the where look customer can we how of function we at historically, in how what we until build mix, that. we you plan. wait look And don't cases, shared have strategically. execute the filing to put look

there's So bottom-up a that buildup capital plan. for

as or how afford customers. ultimately capital case value of system create we [ph] as so important the for that to headroom more we'll we we're into the investments those the - And at have, do put in our able provide bills, of look

will out in And as it it the call strike. capital. the balance And plays that's our you'll so X-year here in see QX

Shar Pourreza

one quick a just maybe then And Perfect. for Rejji. Okay.

Covert beyond at Just slightly purchase including need you plan, the beyond the into do in associated I those the took guess enrolling current and financing IRP I anticipate plan or spending plan, more renewables, guess? X-year care are plan needs guys your looking quarter as issuance current you thinking of as the about we're last any

Rejji Hayes

Yeah.

appreciate for contracts. yet. I put forward And issued just in just place So haven't the we Symantec, We question, Shar. the equity

And But we'll the the $XX.X in new the so XXXX to locked provide first in out issue, forwards roll billion obviously, yet year. we've for on. the funding financing the we've X-year current of of half course the needs obviously but plan have price, we and Covert, the the at for place really a put plan, over of we're parent executing that

recall, XXXX prior And XXXX, to there's those of year no the being years. year, million in in needs because sale equity limited about comments last and equity needs that. to As about so you consistent bank very outer $XXX may our the the we've of been funding per

Garrick when we how And affordability start flu. capital the to we a think the the see plan. offered constrained we'll happens addition update about capital what comments plan, on so remind is to And in

balance over want and over The is financing, we the other lever don't sheet. one equitize to

the then executing execution we'll of the feasibility think plan other that. just through. capital mindful And So on of the thing we'll plan obviously, and capital be is of

Shar Pourreza

it was last always Okay. appreciate to trying guys, so much you get Perfect. Thank point The . I

Rejji Hayes

Shar. Thanks.

Operator

you. Thank

Our comes from Jeremy Please go next JPMorgan. ahead. question from Tonet

line is Your now open.

Jeremy Tonet

Hi, good morning.

Garrick Rochow

How Jermey. are you? morning, Good Hey.

Jeremy Tonet

Good, good. Thanks.

out for to us you could wondering talk here, can a you're I'm you current trends. for What And you to on want compare bit you the cover guidance sales contribution just 'XX? trying sales versus about downside if that thinking for trends kind more drivers. within the EPS Just to if upside for of when get trends? drivers do the in 'XX. range? does a Just flesh XXXX guide feel could, anticipate How

Garrick Rochow

will and start, context around Reg I Sure. as know offer some I'll well. it

pleased want here and we've So toward the that and [ph] to with again, strengthens here. said, I the Colbert Colbert remind As And X% earlier that. that high as includes stated to lengthens it's our everybody, I X% plan end, we're

a consistency so I this this And where here, long-term delivering performance. industry-leading think this, when we about is repeatability playing we're of again, and have financial game

XXXX - outer so we're it then of please. how thinking in the But some specifics, even in the move walked and years. as about that's Rejji, you we And through

Rejji Hayes

sure. Yeah,

anticipate as Jeremy, versus again, question. being year, Colbert X that. I So for upside then in I And $X.XX of financing EPS offer to The or of the about plan. acquisition, the that appreciate $X.XX QX the $X.XX equity we think, discussed, we of should this top on

And so that's Garrick into all as mentioned. the guide, incorporated

to more embedded you could we that. so that time as that's respect guide. in XXX we on details conservatively. But plan XXX know, sales, And spend to the of With what's

And clearly to quite assuming weather, year this it pertains so has far as we're so been good. that

little planning comp. is so what XXXX bit would a And anticipate weather of a for normal a strong headwind we just versus

to upside pandemic. the non-weather the the surprised been side, starting with really we've On

seeing just outperforming the residential terms couple residential last the favorable And that very and we're industrial we of again, we've see side, of We'll a load, that momentum that nice upside good so carry And level plan of seen in mix of years. into XXXX. assume still pre-pandemic bit expect conservatively you on and I would expectations with think and commercial to load. on

thing only year. just just a on would rate And and respect sales. XXXX this for gas earlier is finish to are clearly, so constructive settlement add, had drivers the that puts out those Colbert we takes case and with I The to the

X of of next heating QX And the to benefit went year. this that flow so season expect of year, the to effective we see increase in in should October into rates, start which

X a outcome then electric pending of constructive for anticipate got a XXXX. So months or and rate first there well. case we've X And as the

primary those So kind are of the drivers.

got got Colbert, you've sales. You on conservatism

helpful? then that got relief the from that rate outcomes. You've Is constructive we anticipate

Jeremy Tonet

No, especially that's if wondering more And helpful. just battery to could. bit storage, very wanted you ticks change on Yes. renewable planned pivot could higher provide on could from anything the how I front? And watching penetration think there this a than if out just over IRA And decade, to thoughts some potentially this I if little benefits? you're is system for you else

Garrick Rochow

great a question. That's Jeremy. Thanks,

So megawatts, And in IRP in ‘XX RFP that and XX XXXX. have our we that for has to to issued take already work. the place we've

And so that's well underway.

in inclusion plan. can capital you you'll is IRA so that's flexibility within see and ITC nice But And about of X-year that solar. is have the offered our clearly, what stand-alone the this

typically, been solar. it's coupled So with

And just it have but a a use. so greater to it not storage amount we be be a asset, and grid ability move asset, flexibility around provides supply in have the how of

technologies. lithium of value a and storage other you so the storage like see of And stacking ion can

look Rejji And so has might plan, think at I well. And strategy to of we to we comments other lithium how might X-year or I accelerate know and as we differently that. our and forward but longer-term storage technologies. some about look this to on how going We're continue the deployment the in also

Rejji Hayes

IEP to that And is it's remember thing I is the important iterative Jeremy, nature. the add in only would

be file be than that. to we'll at will a sooner stature one bias so minimum filing years, every for but likely the And X our

XX that well point, in over a importance it lithium-ion whether the that or the to noted to larger descent we megawatts And benefit some the Garrick it's of of is upcoming term. storage XXX incorporate next too. particularly with potential the the we'll of cost XX normalization, We’re a the the potentially And as assuming term. the about out that is in permits see forward so which ITC But it, we new again, to other any as assumptions it's plan opting cost and storage of technology, can full and Garrick the pull in curve XX expand that IRPs.And it, so provided megawatts short look years, stand-alone it curve, with helpful, if using for in as optionality portfolio longer

Jeremy Tonet

one, could. quick Got it. a real That's And if I last helpful. just

Just And transpire? how rate future wondering reopen? Palisade what the change you savings this think be payers about does potential should successful customer should impacts could for this

Garrick Rochow

Well, a Palisades. comments of couple offer I on

the have a like So if questions, longer costs we of the anymore, a and operate the get plant, agreement, we plant significant don't purchase was no course year. and our power over for own into savings power we don't which technical supply the we customers

PPA related But would technical much as We'll and power purchase Energy So line, compensation purchase directed new the on what competitive and maybe Michigan expect to questions agreement. be mechanism power be has or the we And old should be agreement. more Public the tech and it Commission. of to that Department that open really to a a with office shared It bottom like. Governor's questions more much market-based the and here's than Service we've has financial historically. been with

this So Palisade on point. that's offer really at I'd what

Jeremy Tonet

I'll sense. leave Makes it. you. Got Thank it there.

Garrick Rochow

Jeremy. Thanks,

Operator

comes Bank is Please question of open. from line America. your ahead next now go Our Dumoulin-Smith Julien from

Julien Dumoulin-Smith

Appreciate it, hey starting Listen, time. the thank you. – just for Thanks team. maybe morning, just Good

right? in finalized want guidance watching the or with emphasize few that to I can just we go are pieces quickly here focus of the at a next back that. I can starting you're you want apart what preliminary, clarify when if work. Can in mind, to Just moving months? What can you to you and the that more why in the you on word you piece outset? used preliminary to terms your pivot

Garrick Rochow

short it. Yeah, of and that's preliminary we because actuals, off the rebase

QX, provided, that we off will up feel deliver about as wrap within year-end, good and And actuals. again, range rebase then which, at so we'll I we've guidance

an so And be I guidance, raised tightened thinking about we've bottom of in which midpoint of think And really year the guidance. the managing about this that guidance, the indicator work. should I'm of course, when again, confidence. end, this the

of storms we also things year. opportunities the look of the we'll reinvestment path And deal ensure a come and reinvestment then other that for remainder we our typically imagine as go for way XXXX So success those XXXX. derisk opportunities that And and with. through

the that? that's want play to how it add so And through Rejji, year. know I out to the don't will remainder if of you

Rejji Hayes

rate the variables process couple of the into case, other of is would we the electric a and into But little Julien, how rebase QX add a of next trending. of We're to we'll off bit have months we'll have it's certainly visibility I evaluating thing so actuals deployment account only obviously that's the contingency QX over a in couple of in pending just settlement. addition months. take in any and more potential and

we so there. we'll then have how that at things point, filed rate case. see the gas will go And And

we're size thinking implications still there, of through some variables the outcome constructive we'll but place. so assume and and And a still in that,

So of as other QX bit our year. we establish we'd on XXXX the final look guidance for information our call that's next early

Julien Dumoulin-Smith

it. Got

bit near want of that involvement little DOE's fit that also crystallized But processes I been admittedly last Obviously, at Fair the your and somewhat right. it's ongoing a can Palisade And bit in you traditional, play a into to in any with their get would enough. is and/or back IRP the a like less a little continually less contract just to term? if how I that could least of you. Thank then revisit Holtec All about little than vis-à-vis traditional. RFP actually the your than just question how feasibly to have I flight are Can Okay. go late bit. talk processes. rehash

Garrick Rochow

context That's XXX you context, end energy. The others just XXX It play this, - a the done megawatts there's but know for megawatts IRP affiliate an dispatchable for on within of megawatts through so that's know September. potential of because call, clean this I DIG. XXX is the the for RF third was with to for party issued going of issued. out. It's That RFP has at been the transaction Julien,

time then at be time take that anticipate in will some in the Those party. line. the those that anticipate We have will third the we'll by be May call direction proposals time So plays again submitted share And in out. to I'll the frame. evaluated to likely That it May we frame. December earnings February.

to mechanism party. out. will plant, in it's the that's that. Again, to how Should going not in price, and affiliate, on would participate option earn And there. it's it's by financial if again, Holtec an So third compensation a be it at an a a Palisades a with I comes or do may competitive know we play that. out who return participate not choose it because

So out over here the that's months. the next part - of play would that eight the approach would be course

Julien Dumoulin-Smith

it, right. it. much. it. luck. much too I you very but Got can't All I know comment Thank on I appreciate Good

Garrick Rochow

Thank you.

Rejji Hayes

Julien. Thanks,

Operator

Stanley. Please comes question next David Our ahead. Morgan go from Arcaro from

is Your open. line now

David Arcaro

morning. my good for Hi, taking question. Thanks

would In the contemplating at You for it, latest point? this filing you next electric just but alluded the And case be rate gap case the any rate on terms the what cases was timing I to of thinking settlement? for then curious electric just and potential between here? rate

Garrick Rochow

Well, just a little background, too.

case. improve quality it's And with the position I a fast so rate provided the of in did believe the It's point August. constructive that. evident this I they case starting was the to work see team. really And we pleased that on And a in electric and on of lot

shared, as we're Rejji case looking at rate the so potential And electric for settlement.

then final will that December in continue PFD case so anticipate We is a final. February. And order and in until the

a current opportunity the So we that's longer status. And then cycle. just have the the XX-month we're

in customers. that's make plays one - electric to this us rate another would want so in sure we little filing how a And early consider And XXXX, for right it case. terms making the in got another out to for and our out will of we far we're be investments see

David Arcaro

Yeah, whether materials be And the pressures from in give you it components if and terms latest how outlook seeing what the that's wondering terms of inflation, you're sense. could that cost of was just in labor I makes impacting just O&M Thanks. here?

Garrick Rochow

a because that's a And great appreciate That's customers you question. started key piece. with I our

this. so let a little give here And me fact you just to

fact, of bills. on able carrying And their $XX not bad so, million. XXXX, pleased an that from In just from you'll again, have customers to debt in position. our the state, state.\ or for been lower company had uncollectibles so get for customers. money debt we're our our as million a in quarter, And we year October perspective, a that quartile customers. And balance of And context, X They're really a a and balance balance. number to funds was $XX big some And in XXXX, the October went I'm federal that we've see hands fiscal to in

our feel good customers because position. better a I So are out starting in

I'm Now certainly their empathetic and sympathetic to needs.

an our we and energy bill, electric XX% influence bill customers, XX% are can about gas And that. look reduction, that And influence bill, we doing that. we through the is can we great for our We about It's consumption. waste programs, at so on energy about their know efficiency of that's our customers. what when

most In use. again, the again other customers thermostat addition, that the to vulnerable thermostats pushing those we're with state and XX,XXX - them, are control funds. and in nonprofits We're or need, help federal about

is material here company, focus really, our and as And asked Absolutely, things in $XX question in broadly, prices mitigate clearly particularly we increase? waste so then most -- And year-over-year. you Way, on million the this the a XX% But vulnerable of on seen there's doing time. approaching CE customers our million perspective. million capital a $XX of to we're a $XX reduction, have lot that. O&M

all low fields these $XXX customers Again, were just They impact. phenomenally over gas coal. storage got Cars of heat - ran MISO our saved all $XXX and help gas manage year-end. state. We was used gas steady plants cost the year-to-date, assets, by ran \looks summer months. Our the million our bouncing the million rate, [ph] they market. around we a like volatility again, to

Palisade of episodic OEM savings for have PPA, So cost those host a [indiscernible] And of million and $XXX $XX million there. whole then Palisade are the PPA we now. here

on. I can Rejji the I you necessary PTC, customers reduction see the focused for customers, So IRA again squarely for our go has investments can creating again, even improve system right to manage that to to we on we're more in cost offer. know the And that. our and But headroom make so

Rejji Hayes

as The points load think I at you, as of global the IRA economic we bring going Michigan created That is legislation that key a likely be well. looking over equation of the if to fruitful EV the that past me, all battery from passed well. the Derik, perspective, for David, accelerates side. the a cost to proliferation period good of opportunities the of that result see really economic really the on once-in-a-generation manufacturer the to of load good an opportunities a beginning covered a excuse China. you load it development some point earlier that Yes. the as The that Goshen several remind and as well. months, it of tipping we're mentioned development only announcement still benefits is I I'll Michigan helps thing the is ship as of opportunities, NDRA the out And vehicle the good helps what in equation electric opportunity

looking we're to Garrick but line at the reduce so cost as well And as enumerated, top all also looking we're at rates. opportunities

David Arcaro

so Okay. points lot helpful And of you Great. A there. soon. much. Thanks see

Rejji Hayes

Thanks, David.

Operator

Our comes ahead. go Miller Travis from from next Please Morningstar. question

line Your is now open.

Travis Miller

morning. you. Good Thank

Garrick Rochow

Good Travis. morning.

Travis Miller

terms generation load. coming something versus of where distribution business any it thinking the obviously, Is more more industrial What investment mean serve highlighted, you'll type need type of does in, GC to other generation? investment or it? about you that investments load the of load, or wondering of to the that distribution get kind was when in I capital you're mix need serve

Garrick Rochow

the piece both, It's space distribution. immediate a the is really but in little bit of of

HSC that Hemlock an located like are out or load here, you now. companies Semiconductor these they're example, So right take as if building

and And a dedicated they're again, running that be so to so redundancy build build Goshen, to going substation further behind substation, from how out. looking at again, offer we the little do a a of point. and start In we're additional facilities, the their existing constructing facility. case you're But electric line

through and a demand first investments. And And needs. up needs steps And those. again, XX really and our there's distribution part see you'll resource build space to integrated And able right and long for look which continue we really the the beautiful plan to years look part plan be X-year out capital as in so really then on the XXXX. now, of those capacity, the show the balance to, supply construct of

these to Travis? and grow, room have as we we grow our we that side. forward add investments. in we'll Michigan helpful? continue and low, adjustments IRPs as Is - subsequent continues a So from make to add that move But supply to as

Travis Miller

helps. It's That exactly what I Yeah. was asking.

to had that everything ask. You else answered I

I a it appreciate and weeks. see of in So you couple

Garrick Rochow

Yeah, take care.

Operator

from Crowdell Our next Mizuho. question Anthony comes from

ahead. open. go now Please is line Your

Anthony Crowdell

on morning, morning, Good Good Garrick. Rejji. quarter. Congratulations great a

Garrick Rochow

you. Thank

Anthony Crowdell

maybe fold I high the then about real I if guidance this apologize, - when about think strengthen IRP you And towards talked over And But understand want is just earnings to CMS lengthen you the to question. the high I ignore the I of X% - X% and end semantic more to plan. at out that out look of towards assumptions? our than towards take reconcile it's end/ 'XX of if Is of X% end. X% trying X% it's kind preliminary, now Or X% to I to where the just midpoint. right I'm X% is guess planning to I the at high X%

Garrick Rochow

it. going ignore I I'm to love not your question. And

little now our X%, pre to midpoint. had So to a be That's X%, always go bias a at even We X% history to we said And bit, And different. in it's just let's we it. to Interbank. high and and approached how the it towards I . answer definitely back is X% guided we the end. language we expect

that's so the look that. approach for we again, And going repeatability into And forward.

going industry-leading year after range, to in from year high going that end. that it that guidance, our But That's And do. be off expect of always guide high be but so XXXX performance as as we're of you you saying Is X% again, continue midpoint we're the to in helpful? X% expected to that can again financial the X% rebase offers. towards we off we that to to We'll saw actuals, consistency preliminary to we're what it's XXXX, end. X%

Anthony Crowdell

Okay.

I Let's XX years, then back shot very the Do back the in that of consistent delivered range? I'm the high X% you that 'XX and look at hit last you performance it to X% end you look I guys view If when finished. X%.

Garrick Rochow

we're have, what data we you, call can what context in only our front about guidance. here talk I XXXX of the I in but know and have don't the of you

to but expect of would the anticipate that upper Is we've I the that we XXX the clear range. would it I So wouldn't that high to said XXX. end half minute, I And of up expect that be range. would

Anthony Crowdell

Perfect. Thanks to Hollywood. forward in and looking you seeing

Operator

from comes Please final Michael Sullivan today Search. from go ahead. Wolfe Our question

Your open. now line is

Michael Sullivan

Hey, good morning.

Garrick Rochow

Michael. Morning,

Michael Sullivan

be Just XXX%, - the is renewables own with that what associated competitive like XX% with has IRA, wanted across competitive cost look plan you and there. that? CapEx current on And were What would if your theoretically? I board to to the just in to post ask ownership think becoming more go the

Rejji Hayes

gigawatts. you're that asking of portfolio X Is I full assume Michael, the fair? about Yes,

Michael Sullivan

you. the way, current just , X-year plan, that is got for IRP The whatever either –yeah, easiest the In current approved/

Rejji Hayes

Yeah.

roughly be X So gigawatts, cost $X they for we've of could that was way curves XX% again, the the that reducing a around And are. pre in the quantified past billion. with But IRA ownership assumption. that

over of time, own, to the with lower highlighted, to of So we of as a more competitive be we would more to continue cost see presumably, contracting. be Garrick than amount it expect But the continue could CapEx. cost and XX% owning greater if

call. got time. X-year earnings have solar currently, refresh we've $X over plan. next obviously, the plan in the billion of we'll plan, In the quarter in as the And about quarter our we'll revise so first year. capital And those fourth estimates we

billion So But the in had it. then. we'll update give $X about roughly plan current an

Michael Sullivan

into if is cost then That's regularly again, Okay. along equity you following kind Do plan? that that that all super start of the here. more kind more of if that, you But this And introduces just competitive needs theoretical. more you helpful. at finding are limit

Rejji Hayes

Yes.

settlement XX%. So of the cap natural a the current construct has agreement per

And so from ownership. it's XX% for a effectively to XX% collar

able we wouldn't that. in now. IRPs, than that could more above potentially But be go we earn to so subsequent And contractually

execute But factors it modest we revisit as increases I would When highlighted things. are solutions, say capital I this well. three plan. relatively the Garrick we'll affordability, ceiling with so contracted we're plan, on and as earlier, the the competitive constraining off. sure if through think we rate so capital making the cost emphasize are particularly that It's think to that potentially like come And it we'd

implications. plan that think also structural about our do grow on We to significantly workforce We to not want the the capital because has feasibility of executing. cost execute

in And feasibility sheet sheet. rather we so then the to balance would we capital into there's plan. it the there's fund not operational over order and And balance or over-lever an take equitize aspect

that's and the the we'll capital latest plan so we construct generally subsequent and And in how about capital year capital we'll quarter that plans take that. into account provide plan, after that out building obviously, we this think as first next

Michael Sullivan

helpful. Super Rejji. Thanks,

Operator

for today. session Mr. to I remarks. Q&A our closing for concludes now That will Rochow the turn over Garrick call

Garrick Rochow

joining thank Maxine, and you, Thanks, in Look seeing a us forward Take for EEI few weeks. everyone, today. safe. care and to you stay at

Operator

This concludes your today's participation. We you for conference. thank

CMS Energy Corporation 5.875% J (CMS) 27 Oct 222022 Q3 Earnings call transcript