CMS - Earnings call transcript Q2 2024 | CMS Energy Corporation 5.875% J

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Operator

Good morning, everyone, and welcome to the CMS Energy 2024 Second 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. [Operator Instructions] Just a reminder, there will be a rebroadcast of this conference call today beginning at 12:00 p.m. Eastern Time running through August 1. call being the is time, Investor like turn also Energy's on I is to in Mr. website Relations the presentation webcast available and CMS would This to over section. At this Show, and President Investor of Jason Relations. Treasurer Vice

Jason Shore

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

Garrick Rochow

Jason, you, everyone, us today. thank you, and for joining Thank

matters. because X% focus thesis, been of for to for decades delivers than X% our growth thesis. I'm Today, durable highlight earnings to two proven investment key two affordable Our customers and what which has on going our adjusted more bills we areas

fuel more bills our investments and to environment in for as regulatory name our and increased Built Michigan's mechanisms provides supports to regulatory codified to forward-looking attributes. gas reliable strong law, This supportive Michigan framework, for our incentives financial recovery is on reduction environment. affordable which XX-month cleaner. And and resilient Michigan's needed cases, position commitment much few second, framework First, make a robust solid and energy continued of electric customers. and constructive systems safer, a top-tier just rate waste important incentives a

the CE consider equation. of upward approach of the Way, limits It is results important in of This a keep to we operating system, pressure cost-saving before, a affordable. As build long I our sides I've delivery all both the of the delivering lean we're regulatory work our on We year. industry-leading one customer plan. said our for the continue bills. make of best we industry. use customer the and investments the perspective, opportunities stakeholders. From a strong And critical well to future, we for in into see runway investment start our off

filing complete. fourth point for recently earlier electric our a and our gas $XX.X equity effective the with renewable pleased As for this our gas May consecutive plan rate rate year. million in November electric of which settlement, remaining rate very ratio. in case only see the EP in settled mostly new in cases, XX-year Slide We're in environment is ROE We settlements of and relief, X, our order month, rate filing calls plan the of a calendar this Michigan. filed our can you business, in a regulatory highlighting another rate our gas, our in yet proof case on constructive the consecutive strong settlement four regulatory in is case received March, to XX% gas December our upcoming approved our next or gas a follow case rate major energy year. We X.X% Outside

affordable our energy our a pause about to outcomes clean great regulatory Midway make as formula me customers. want to investments. important known. reliable, like customer significant planned affordability the talk to our moment. detail energy are safe, Let filings, renewable for financial-related also investments there we year. Long-term the our be. I for through that plan and a deliver place is support This

as see renewables and to clean energy. we shared more we investment make transition previously, we opportunities As the

road map gas our in the investments needed electric delivery reliability highlight of well beyond billion plans X-year our plan. plan, In and within $XX investments financial natural customer addition our to important capital

we manufacturing, a affordability. We make of Capitalizing customer as fixed that's over costs cleaner which significant coal customer take PPAs investments. ability over and of jobs development to mission create on seriously savings. annual in provide runway those base, headroom provides investments, balanced which larger our continued toward long all economic over These of important customer million long investments capital market laser savings customers. our Renegotiating necessary in and particularly saying see benefiting with resources. investments transition a well Way, million way opportunities, to together we use on facilities, which retiring the a of over through $XX in a focus customer spreading Now brings $XXX CE must be

programs help Lastly, keeping that to the a reduction reduce best-in-class formula leveraging with strengthen energy is This important continuing bills. works to while customers customer affordable. for waste system everyone, bills investments our

the look results at outlook. and let's Now

For XXXX, are largely the this the of our gas rate the in electric long-term our all We confident outcomes first half, remain reaffirming we half $X.XX first of reported by objectives. in driven guidance and and per cases. outlook adjusted $X.XX, financial versus earnings constructive share year's and up

Our X% EPS that, $X.XX full Rejji. toward X% over per hand to end. X%. With high our of up to toward year and range call high continue guidance I'll to end which to term, Longer remained continued growth the confidence the includes guide X%, the adjusted implies share at with we $X.XX to of

Rejji Hayes

Garrick, you'll the XXXX months for and six and morning, our you, illustrates chart, first performance year impacting Thank see financial our waterfall key On ago which drivers of the everyone. our good X, expectations. standard Slide

we and both through comparison summary, first For net on of in investment per basis. In half all which of have the weather first comparable figure clarification half headwind includes the degree past of equating largely the to of the a winter delivered per relief remind service the share, weather, compares favorably and purposes, glimpses number to year-to-date XX herein the some have in of net of income territory adjusted through in XXXX, or XXXX, negative years. to which seen the I'll continues XXXX, in you, June, in analysis be million weather experience in variance to rate $X.XX are year-to-go of warm a the period costs. particularly days due we quarter, higher while favorable $XXX our $X.XX And of to overall lowest second first the year, heating that variance a share

positive variance late that As territory $X.XX per versus last our year per impacted in electric out months the sales. weather catch-off higher system the mentioned, rate impacted heavy was of drivers case middle NorthStar a upside by in service our resulted perspective, the comparable XXXX. Rounding first in a of financial bucket expenses, related constructive received operational resulted the the activity, gas The including were highlighted of performance share, in in notable here variance of in the positive share to of March period of and weather-normalized the variance note at due half the one key sources six order negatively in a primary of settlement. From year's relief, rate in net negative first achieved investment-related in performance chart. our rate outcomes first the of electric cost $X.XX and performance year, share half the June storm to $X.XX our per you'll solid

implemented the initiatives for select XXXX. gas the the $X.XX of the in plan half to among earlier. final separation experienced regulatory benefits the to O&M which as year, QX case expense variance, by we rate per the sustainable by we share our settlement, perspective, Closing rate year, our as outcome driven expect from the at drive the lower months cost positive and largely fueled and overall approved of we'll of From the the for Collectively, for share, realize electric the path such variance in always, per glide per of out as voluntary the temperatures earlier remainder this share residual six CE equates a others. the for recently given variance utility order six the $X.XX plan, of weather, from during positive normal anticipate ahead, year. items usual performance of remaining in achieved XXXX year months noted positive our Way a aforementioned by mild Garrick Looking cost these received constructive we $X.XX call, which the driven summarized reduction commission remaining the

you'll share $X.XX customers ]. well of these select [ of sales onetime of negative the despite in equate first assumptions and the deliver significant In a summary, the bar we year financial around countermeasures per benefit objectives consists absence are and penultimate In variance. to a half XXXX on our the year, positioned $X.XX the to to challenging on other side, of investors. negative weather-normalized usual aggregate, right-hand to note from and performance assumptions variance, Lastly, among IOs the last which of largely conservative nonutility

our X which Moving to of the on utility. increase to at the in funding your planned debt I'll more our limited modest the at XXXX, are to needs utility. relatively financing financing specificity on XXXX our of bring to offers this issuances a Slide attention plan. point planned balance

capital issue year outcomes. the planning the in in the rate approximately of in million with at half implied original the rate-making accordance Specifically, versus million $XXX to rebalance now $XXX structure guidance utility to we our case are the estimates second of recent

our the not no have completed long-term financings our favorable sales opportunistic that I'm year to of plan apparent ahead a tax all schedule. to the for should of that some also financing have the slide, report we in our highlighted XXXX, ahead levels pull planned as Although we and remain of planned see table but opportunity cost-efficient needs. I'll to reiterate on pleased credit in we at XXXX

operational investors, his and has approach hand this our circumstances is different. And in This conservatively before, to Q&A of on benefit no on us with has plan the I'll customers irrespective we plan out that, We our back our our objectives, said to tried approach final to as I've and and for is run to year year arise. remarks Garrick enabled of session. capitalize year been opportunities they As business. and it how financial deliver the to and financing and true the the similar before and

Garrick Rochow

lines XX in industry-leading investments the Q&A. while that, thesis, Rejji. strong important our open have in and continue make our for outlook beyond the we and customer of system on consistent simple investment please our confidence years as Harry, you, affordability. With Thank maintaining financial I to this performance. necessary and CMS year Energy, execute

Operator

Instructions] [Operator the today question JPMorgan. from comes line Jeremy Tonet of first Our of

Jeremy Tonet

turn of DIG just to could. regards I with guess, wanted updated in here trends power this if given for overall environment, just, and get recontracting wanted kind thoughts to in towards to bit a we prices? And outlook little Just the

Garrick Rochow

above well markets opportunity ripe contracts and Jeremy, a plan. I we we and consistent would secure the capacity to managing capacity shared to that to prices nice energy upward it's past, be continue continues our bilateral what with in suggest, strike pressure

opportunity we've And so good shared that. the do strengthen and past, in our performance. this again, it's And a to as continue to financial lengthen continues to just

Jeremy Tonet

seems it CMS the overall. then pretty like a position year, in is good And halfway through

any guess, the getting towards, and looking future thoughts management be could wondering as to, how with Just in whether that? pull all and it position you outlook guess, now stands really there in you is forward how of right XQ impacts think for weather share costs to might to I derisk regards thoughts about a and I cost further

Rejji Hayes

the just more Rejji. X- for more appear credence I I I a outlooks. say would accurate. looks of give days to bit don't on a obviously, will question. And much personally, appreciate early and I'm be I but fairly days. to focused X-month it's ahead, QX, weather which Jeremy, the lot outlook XX good say,

And paranoid on based just remain been has year-to-date, so And that all we weather. not about kind. always weather

success to and over performance-related on several do to continue continue cost QX. cost over we'll some years course on the execute management good that initiatives. the We've year, so the through in And last of executing we'll had

thinking and still start was As in historically, pull I'd QX good for or flexing XXXX. really those any think about ahead say quarter. we aheads call, types a helpful first deeper of where even outlook of until didn't about the of derisking still in we or I up pull had years, first quarters, it's the got fourth mechanisms on the mentioned quarter best real premature couple weather into the in to of

derisking perspective But So too hopefully, more at that. XXXX quarter. to this point, to into from talk a premature next get it's about

Garrick Rochow

on talked that the that his of control typically at things that, call already that did lot in continuing. of Confidence in just greater We all Way. the run remarks, in additional field We've those comes continue benefit XXXX savings historically. management automate a could remarks, to on digital an done number in a the solutions, $XX work rate separation, in year. than we're here of the year. to We terms of been executing everything also, like There from are I into work, part if I in to confidence. the voluntary things from Jeremy, work cost prepared And the my the we annual million about yield the to see office, fact CE we're add of have in basis. flying shared And that a continue as contract way prepared provide -- the Ready that

So guidance as for here again, in call I earlier, shared delivering confident the the year. and

Jeremy Tonet

the with of development. I that wrap to the guess, and I to opportunity centers and on service impact in type just pace could whether comes to going thoughts that Michigan, And forward of with then if such interplay fruition data might here, how regards legislation

Garrick Rochow

in enough shared team want Hayes-Rochow call, before well talk it's say, line, to us our the the sure conservative dotted approach as QX you know you to it. in we might signed here. on financials. we the pretty And We're Jeremy, make I about

and So centers we we inflate [ in to call, both XXX in There the the those I state. manufacturing regardless in a seeing centers, I from as our the lot continue the center sales be of both seeing interest move in growth perspective, continues That shared manufacturing say saw data that QX, about QX. strong we're of some QX that a would into forward ] and lot in state, a the We there's growth. talked just forecast. I also of data in state we interest what signed continues hyperscalers data one legislation to megawatts. don't in midscalers call,

use tax the you will the sales And bit ], Jerry Sunday top But on [ again, it's conversation piece in in say. so and of continue might the of a legislature.

Operator

is Pourreza question next Partners. the Guggenheim today of Shahriar of from Our line

Shahriar Pourreza

not noted So of in I the know you generation guys incremental the sort FCM mechanism new that previously could be plan. in

of we're would CMS any maybe filing, headed the getting how be for rep to positioned kind closer where is on demand November there. As thoughts upside and

thoughts Have versus your growth any load So the any you to incremental options? CapEx in embed higher PPA assumptions? started on

Garrick Rochow

rate for really was I design a Sure. hoping question.

Shahriar Pourreza

It's my coming. That's follow-up.

Garrick Rochow

mechanism, see in Let's talk shows of both as in are the upside. financial about additional definitely a energy those shows part That this. of We up true. up this that ownership law, asset compensation

out, renewable file it's they'll our November, play XX-month energy me plan though. Let to talk about a in how process. We're going this

So year, know of kind of in we'll XXXX, half latter the what that like. looks

XXXX XXXX perspective our our you'll that both plan, in the STM so capital as And see like. what mix looks well an means, might ownership as from financials what

where so out. And it that's will play

and of probably integrated the to our pieces resource component addition in the XXXX, of which the of plan, the reliability we'll that, that. talk because In portion deliver that's also to file about some story some we'll work of a capacity

play financial the definitely 'XX, show good 'XX, impact 'XX, compensation our plan. was between energy seeing think the I our XXXX growth greater capital some So state. mechanism need of than as our we've in financials. And in well economic will you'll this, when will in I seen out renewable in That say IRP. see as a that's original up the We're terms

I'll leave that. certainly, law. So to capital addition provide growth the at opportunity will in it terms upside additional in energy of that And

Shahriar Pourreza

to this Garrick. I just dedicate a follow-up, obviously then quick and And

case. DR the prior in how IRM on sort Just kind kind on versus the sort cause opportunity sort early dedicate I I The you I after guess, is testimony of settlement path feel And of design more would is about settlement given anything, stuff path? you, an do ] a the the case there remain unchanged. of It's of and and this a that obviously, to can thinking the are litigated of [ provisions 'XX the less complex some guess mechanisms of for the there side, in this there filing rate and any be contention? it's electric rate like event. of you innings.

Garrick Rochow

call. team. confident up very to I order. also can this I? didn't for always that a on distance, for we case March opportunities. our [ I'm together, full in did we go here look set great settlement myself as I ] in and [indiscernible] put one, year We our will just this

cases to than out think some electric One, And the this figured important gas I case, it's so that to when really about cases. things there's are complex some rate settlement. be context understand around that for have get think electric I to opportunity more really

example, than less for in had case. XX So our intervenors we gas

mechanism, work we're another tree maintenance important system. outage the O&M going There's are has asking system and to asking hardening [ what we'll the the look #X try ] so and capital at to -- more come certainly it's committed staff are There's we to case navigate think am have in These I the where and leverage That's through We case. in across settlement important in important as is are in ] on so what well going work to in know in also case. have well. transfer party find It General to the our and it's do recovery on reclosures case. staff Attorney That's I've We're our important aligned points XX and very confident for, it's complex important cause just, a electric September. that. I has the this customers abnormal, case the undergrounding I focused technology [ with the where work But for of interested electric commissioners investments over more a mechanism will automated not trimming, for That this in to reliability. other of little great is context case. and and infrastructure store this this the what that, are opportunity. system. understand and

And ability we the in so well get how we very feel well just our as as constructive are confident across to outcome, customers. our staff aligned commission given

context gives case. that some the you on hopefully, So

Now on rate bit about a rate little design, let design. me just talk

Specifically, filing that was approved. at data an that We centers that, rate. ex-parte development economic are made had adjustment in our not

GDP interest capacity so The in commission customers. ] for exploring looking balance, and thought center as rate. And the mind. GDP time, in does a cost, of they as are the the has utility serve in that our [ industrial that opportunity the to is energy the what specific those a an been well both rate better and our data meantime, rate. good cost the at We But proxy is and

suited is what my I happen on mind well a Shahriar time. so [indiscernible] thing. And had said for economic it's also center GDP, I that's our -- things was election something the from GPD that rate that data was on perspective, from I hoping about sorry a different other what's meant there. Maybe the I going design but have like my wrong -- I to perspective. I economy. with eyes think

Operator

today next of Our question Sullivan line of is Wolfe Michael from the Research.

Michael Sullivan

back just the discussion. legislation data wanted to go center to I

think weighted the coming forward? last any XXXX. everyone on examples [ in that legislation the Or moving are there still Was inflation or I ]? other that? about a [indiscernible] talked you XXX-megawatt center contingent on else of data understanding And is call, your is

Garrick Rochow

that's to can you centers, about That cash it's contingent. you to from data much one can -- substation,how piece. get still that. here, how It from and moving signed transmission fast transmission how supply was I guess get fast more that's we're the conversion build able you important we distribution my that's can do here, that hear not What point. is And forward,

you on at of sales the regardless forward of mid to to the many ] make a little hyperscalers kids budget. the context, damn on too. so are In want our so words fix in got the legislature the we've end we those focused scalers stack. And smart the governor, session, state. was state to and continue want things, the I And -- road, spring just new give of we to the steps and important of got And the schools, right? don't [ fund progress those

into on data the things So That tax fall. the important centers those sales underway. conversation and will are continue

Now we're elections. in

me or [indiscernible]. So how could for it to will that move difficult will predict be happen to it fast

we'll for so it's again, state. conversation stopping And forward, things continue moving that not But Michael. in the

Michael Sullivan

like takes with to And good being a to how that is on long your years new load for system come that it two about proxy one XXXX?

Garrick Rochow

Mike. there, variables of number a There's

is So about center, of they're that the talked the bringing XXXX, makes load and on case XXXX, data located where system big a we what by in on they're difference.

that. located accommodate center data difference. And where property a a so from to makes Depending perspective the able on is

as you're to cycle. there's go that we all moving Just [indiscernible] far too are seem of greenfield? is centers lines, holding if three And it, that how doesn't have cycle, do data two the kinds in extend into even them tail to far much. be as but years again, of we're quickly, it and that to up variables end that at

Michael Sullivan

with And then separately, just sticking kind legislation. of

were comments legislation a think to time PSC the [indiscernible] months these [ cycle rate comments? of chance back some a for state general from case being of in light that fatigue just a up from about I Are and chair lines those the there per sense you XX revert rate any ] hearing bit in would days. coming few months ago impressed

Garrick Rochow

is no. answer short The

regulatory is environment makes Michigan is in of the As much law. know, set great you what

hearing is And in just of the energy through different went incentives and efficiency rate the nothing that We law cases at law. here traditions. just terms in last forward-looking back looking XX-month up November, just compensation So are [ and law, ] mechanism, was that law. holding we're it financial opened signed or we in

the with to a and constructive staff. commission the Now dialogue we continue always have

terms. And so right, are think I do there opportunities in

you could many about. one And of one so think I'll give just example you example, probably

We plan process lay renewable energy energy that a and resource integrated out an an for plan portfolio. have a great supply

we've Wouldn't it that preapproved reliability the really get a we great? rate done already do Wait, flows could build It road distribution it system, What into cases. So if Let's then be rate map. X-year streamlines that. we thing cases. the same and on

that. Let's do

in path you flow and really done right again, That could right stay And could approve way. time, rate a a you in have see into cases. process. streamline the way, it's that then the for of can Let's period where potentially done the that out

so that. explore of kind constructive Michigan's of the And let's the regulatory nature environment,

if to the for there nature. Let's opportunities even bolstered see Michigan there's -- constructive

Operator

of Our Weisel Scotiabank. of line next question today Andrew is from the

Andrew Weisel

ones. quick two Just

were First, quarter quarter, the the volumes a bit I weather. in first know mild C&I from it's a down weather-adjusted the of was extremely first reversal quarter.

little So early XXXX? for those on But numbers the probably the outlook rest are on and the goofy. a trends near-term bit commentary underlying any maybe of this thoughts year,

Rejji Hayes

and numbers you a to it's together to real really team with precision Sure, again, will trying that it does get Andrew. pullback job science, little for alluded This real accuracy. very sales appreciate a as is good Yes, I and imperfect here. see a versus question electric. and did very of the But last QX the weather Rejji. QX for I'll these take, always. difficult we I bit pull a always I normalized think to of caveat in year it's

all basis, year. always down the versus classes customer were the say, on continue of about so for for a Just to blended XXXX, the our which about point, commercial from and good, assumptions be on down conservative X about comment, because to X.X%. down I and trend in so residential points, as quite everybody X industrial we are quarter. But that the trends year-to-date point is was would an grounded X really up quarter surprised customer slightly unfavorable excluding low-margin is across remains seeing they we And incredibly and about first all-in your for the QX were upside the is

And original were our expectations that in so we every class, initial outperforming were our are guidance. across embedded what customer

note, before, are we those seeing you're had of we all waste also as numbers into reduction non-weather that upside. I'll seeing. said so incorporated energy still sales I've And that

been delivering to since And we've across add of classes so 'XX every class customer X% reduction you we're should doing that because customer thereabouts. the the really year-over-year, or X% those law now each always and

just should across economic those, or want those quoted add I of And underlying to so the you gross about think X% numbers to another up that get if way conditions. each you

good. And quite industrial with we year-to-date remain is about up then X it point. And over up about still still you point X.X%. when [indiscernible] on X we over results. quite about basis, a a is rather X%, and the about remain up pleased Commercial all is in So think little down then

particularly for classes. Michigan energy gross across So waste think customer quite good remain in we reduction, Was things again, conditions up helpful? all all that considered, when really you

Andrew Weisel

Yes. on all that yes, conservative. Good we reminder the efficiency. And you're know

an operational Next, question.

what restoration efforts? there some was of obviously noted grade You score of in in a for activity heavy give yourself would the terms is storm quarter, focus or you you. kind Reliability big

part You talked about gone have as the that your better? electric say into could went case of well? does the you fold What in your efforts comments, what how rate would And this and audit?

Garrick Rochow

More those needs result of have we date. done along So lines. to made we're seeing as be the a number improvements to a investments of great

B that the outage. the ourselves we've And of our the lot this filing to be case context, so give year for needs we're in is Where there's in customers. fairness, rate size I'd And more a evident that's the reducing doing. in worked a done

And fusing ]. so of lot [ we've in a put

is an less So treating we see [ of last the comes reduction when down outages. by a I the have tree work when XX% That's that a important benefit what the you we in provided than trimming over mean more impacted there, line, also three ] our customers than work. free number greater doubled years. that's the We've trim

smaller anticipate. still events the the of a was outside also We which of last June, brought more good ] of We [ that We week was we're XX-hour I and of performance. But We within right XXX% why but window. response have throughout want see be a number and a there that ask restored And within to may but XX% event to in pockets larger restoration we're trees lot respond talked window. resources. the XX-hour XX%. because of our restoring We're easier, in from a lot would within about customers XX-hour put we impacts This resources a way the all to context, You not perspective. it size, that, XXXX, we year, in Rejji last of into shrink able at measure makes leverage trying to state. in we there union June, lot to would a our existing year, a window. a our customers have upwards which terms

the shows directional so And that improvement.

Now this this is the throughout for not and some path again, work continue to the year. electric investments make more. lot got done. We've of And shows to we'll a rate year important do. case

us context. I add know gives to it it some hopefully as well. Rejji So to wants

Rejji Hayes

Andrew, to is financial on operational on a all And of the utilization job good financial restoration. a unit us B+ reducing we're service really add point comments And because this I Way, the about CE I good avoided million would Garrick's lens. cost a applying would give our side seeing actual at we've costs. through done over in $XX of really the side

negative needless attributable Now to overall talked say, about costs to variance restoration last I service year. versus

year. been [ we've However, the would the ] cost done in throughout higher as the problem-solving decidedly have

execute on the in more the past. And reduce so we more using really parties tools We're contracting definitely efficiently restoration to than the we're and storm Way inspections manual CE efficiently. third automation to much of more leveraging have

as also And so back possible as ] all highlighted, the make possible feat as and operational we're efficiently possible. as will to quickly to that that as a sure as really lens online thoughtful quickly Garrick as cost and customers [ addition in as bringing financial apply well

well. be add didn't I'd as I that if remiss So

Operator

Dimelo Smith from Jefferies. today the next of of Our line ] question [ is Julian

Unknown Analyst

given ring Garrick, are you [ the fix ]. here, when the in conversation are your -- putting them to yourself you Now here VP you growth political want right? what put all for in

Garrick Rochow

And if give I'll has Look know. I Rochow ring I it a a here's it. ] to don't don't [ know it try.

Unknown Analyst

clarify Anyway, factors that to considering near-term really you guys I'm outperformance? you equity with position but savings commentary, want pulled $XXX -- you a in, as signaling in rebalance here just million the other back look, factor the got the this I million especially it targets Like and But driving as think like foot versus being about you debt are flag I more of issued to against $XXX you're well -- lead you O&M sure. I you was here. favorably for your have leaning what What's the on O&M Look, overall front wondering talking are. good there your forward debt, typically, here try just ratio. to level longer-term costs,

Rejji Hayes

Julian, it's question the and voice. good Rejji. I appreciate hear back. welcome to Really your

with the in of few just working a Let assumptions you the up start premises or question. offered me

the factual with me so just at let the And start debt purposes. utility, for

our the debt so $X.X in we've we'll the utility outcomes, second and and have year modestly as issue equity plan. financing $XXX just so case at operating was to more are we of which levels, of initially planning of slightly that's It And company. million really rate about part because billion and lower half our the the increased, so had at

thoughtful possible, I about remarks, case relief But in on early so to clear. cost rate last abundantly that well. The that. the rate obviously, that, been, prepared outperformance financing efficiently performance to try to the cost the maturity deliver always investments rate on and obviously, we're from be year, And orders And look we'll just we'll getting want helpful has was benefits as we as as of gas electric I net my profile been execute that March, make the has in sure seeing still residual as constructive side. order mentioned

noted XXXX, first so back-end soft at half transformer also, that's DIG, I prepared issues bit issue. given outperformed. loaded. what's really remarks, a outage-related in NorthStar And given it's the also just in the really as And had first was plan were a there in And catch-all of They half that helped really of the embedded us though a last my year. more year's bucket, comp some has in

some And up so last about residual $X.XX this year, of benefits that they've DIG strong. late gotten came the seeing out is year. the and projects year-over-year, gate solar we're really pretty from in

well And top cost by of as you in as well prior alluded so storms, question. I'd performance, as relief line say some NorthStar it's mild rate hurt have which we as net a at conditions, the the as talked investments, weather to, as offset combination of about outperformance

year. good of going all say into half I'd us the gives the combination of which a So second of confidence it's that, just

Unknown Analyst

with some to And follow-up NorthStar, is real that quick. of that true of Rejji, just lot dynamic A on it there. up

talk outages year-over-year. You about

leading have Or the in I ]? service years? mean, of about that a expected, theory, think a here. subsequent this in some the I'm [ across You should do you been true-up? there more solar of should mean outperformance of indicators curious, -- the is sort there is compounding How the effect

Rejji Hayes

a the year anticipated noted. you on NorthStar front-end loaded all question. We for of good reasons plan. Yes,

But there not to was little are portion surprised very cost a operationally, So opportunities performance but the team that they're say NorthStar's quarter of of first good executing on off-peak additional DIG also bit in the plan. unit a because I a basis, capitalized upside has lower will the drives little well, also margin which they did for margin on only bit a on. executing

it's combination at was also so on but being plant it a NorthStar, plan which because say we've a So I'd front-end efficiency, seen. of loaded operational

the at really NorthStar. that's of it So thrust

Operator

from Durgesh of the Our next is line today question of Chopra Evercore.

Durgesh Chopra

-- been have you legislation I Where of we to an there's stand there? my out see ] coming performance-based on questions please? here other us the ratemaking update the Just [ on wanted Can year. last if do just answered. just update that, dotted all

Garrick Rochow

very a That's Sure. dialogue. been constructive

benchmarkable metrics. metrics. As dialogue, a really started some in four accommodate narrowed ] bit to number nice was to it I've shared grown it [ past, wide little in the provisions. the through a storm then of good It's And down

underway over through still to dialogue expect work might to a Dot say. several few going the there's you want in play be Ts and a However, I then things Check get to filings out that. There's July on Is and cases. constructive here and that the -- this navigate we there's And still is August, able to rate

And so to it's implemented be going not immediately. here

to really a filings to constructive it's productive going go make here. back dialogue have of in ratemaking to forth good be A and that think we speaks I and lot sure interveners Michigan just the it mechanism.

Durgesh Chopra

This So a on could be thoughts potential a 'XX? 'XX Item, metrics. downside, just on did And you any kind And when Just potential then of effect? is the framework there? the penalty into certain say uplift. of a then would earnings go this this

Garrick Rochow

I Again, rate several what two intent it put out that's away, so from The cases over maybe or symmetric. would my see an is view, years world. be a just I the for of implementation perspective. year it to

about downside means amount. there's currently. the opportunity manageable market the upside in opportunity. year. same The this least is at that and the roughly upside so context, proposed That that opportunity of downside opportunity which is at And $XX million context And is is

Operator

Our of next of Morningstar. question the from is line Travis Miller

Travis Miller

how affect it's REP? on or XXXX how Very level electric your earlier the They're demand. in and as filing trending IRP mentioned had you here. high I on the would plan lower how call, and renewable energy could versus you wonder how, trending that that if elaborate does impact potentially higher the

Garrick Rochow

Yes. serve It's customers. based economic that to the again, on that, building activity transmission not signed we're development definitely and higher there's these that substations speculating out on is, or and trending built all is being --

reference you our there should in anticipate additional IRP. filing, And renewable XXXX above plan there's so energy beyond that our and sales

Travis Miller

basis lot? more in fair the on same renewable need energy percentage [indiscernible] And the make leap is would that to what's you then as it that

Garrick Rochow

Yes, generally speaking.

Travis Miller

about interested about implementing would in a you also, accurate obviously, it in if of on terms plant? that PPA? capacity talk the moving and/or be plan media lot in energy signing And is then the that that either to From forward perspective, development your then and so, a in seeing your you're Palisades. And

Garrick Rochow

is a site. budget having Palisade From of that are going perspective, the in forward allocated was another forward the meetings public on direction $XXX now right progress state toward We're the facility. state. million making on

So moving that again, forward plant. forward steps and

the and a struck you offtake to Indiana. a that in remind a co-op the that for I from in Michigan co-op been facility Now Palisades PPA has goes already

it's spoken So for. already

Now any we good Palisade see not returning. it's back. a -- that we, Palisade of And is result did as Energy, at CMS impact do Michigan for coming adverse

Operator

line today next from Our question Campanella Barclays. of the Nick of is

Nicholas Campanella

for one Just me today.

you about just some Rejji, can your equity you just in cognizant us you the said more on So have that? Are kind and of opportunistic forward just about potentially of that 'XX. you give everything pulling table, hybrid remarks or debt I And would prepared think pulling how issue know, do you around financing I'm forward things in of maybe you XXXX. color? to you kind kind from start or talking is be do

Rejji Hayes

the table. say question, the I short, appreciate I I on Nick. say would Yes, in wouldn't everything is

equity won't issuing in see XXXX. us So you

the of to But is towards parent trade. most I to executed And equity opportunistically likely like done types in I thinking certainly, past, table. the hybrids forward on opportunistically don't of where have today. We the we've debt quite is we financing pretty take would seems the and at those expensive, in least the some price senior that more have securities, needs. I was off everything of speaking our past. And risk done all from which as notes though, say think the

year. As about got you the $XXX due may ] coming at we've next [ holdco recall, million

that we top that. money mindful we're so on I'd And have, say, of modest new needs

see Fed potential the have will stopped on fruition, speculation particularly wagering the policy if from policy in but good if the there's around to dovish comes pricing we so And market, monetary that. I

yield again, say year, for to what the if opportunities start correction see forward. that's creates debt as any see the million look up don't that. curve we'll I financings. see holdco we still equity pulling starting to I'd of But to happens. and us in We'll favorable it next So And and need a is $XXX that do

Operator

remarks. With queue Rochow to call back no further like Garrick Mr. time, to any closing the for questions this I at would in the hand

Garrick Rochow

forward road you to to and Thanks, the everyone stay Harry. on us thank care, today. seeing like for safe. look soon. I'd Take joining I

Operator

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

CMS Energy Corporation 5.875% J (CMS) 25 Jul 242024 Q2 Earnings call transcript