CMS Energy Corporation (CMS) has reaffirmed its 2026 earnings outlook and introduced new guidance for 2027. As part of a strategic shift, the company plans to exit non-utility renewable development through its NorthStar business, redirecting capital toward regulated utility investments in Michigan, US.
The restructuring of NorthStar is targeted for completion by the end of 2026, according to President and Chief Executive Officer Garrick Rochow. Under the current plan, CMS intends to sell non-Michigan renewable assets and development projects. However, the company will retain several Michigan-based assets, including Dearborn Industrial Generation (DIG), small gas peaking plants, and four commercial solar projects. These retained assets generate cash flow and require limited additional capital investment.
Expected reduction in parent funding needs through 2030 due to reduced capital allocation and asset-sale proceeds.
The current five-year plan included approximately $1.7 billion for NorthStar, primarily for non-utility renewables. By redirecting these resources, CMS expects to reduce parent funding needs by more than $500 million through 2030. CFO Sri Maddipati stated that as cash is redeployed from NorthStar, the company anticipates reducing planned equity issuance by at least $350 million.
Financial Performance and 2027 Guidance
For the first half of 2026, CMS reported adjusted net income of $464 million, or $1.50 per share. The company maintained its full-year adjusted earnings-per-share guidance of $3.83 to $3.90, expressing confidence toward the high end of that range. For 2027, the company introduced adjusted EPS guidance of $4.08 to $4.17. This range aligns with a long-term annual growth target of 6% to 8% from 2025 actual results.
CFO Sri Maddipati noted that first-half results included a $0.23 per-share year-over-year unfavorable variance, primarily due to liability-management actions in the prior year. Other factors affecting the results included storm activity, weather comparisons, and lower-than-normal cooling and heating degree days.
Management stated that the 2027 outlook already incorporates the NorthStar repositioning. The company’s $24 billion utility investment plan is expected to support 10.5% compounded rate-base growth. Additional investment opportunities identified include a $2 billion utility renewable opportunity in Michigan and a $1 billion electric-distribution reliability opportunity. These opportunities are not currently included in the capital plan or long-term growth outlook.
Data Center Demand and Load Growth
CMS has highlighted progress in addressing large-load demand, including an agreement with a prospective data center customer. This agreement involves an extraordinary facilities agreement and a rate agreement, though the customer must still receive local zoning approval. The company will incorporate this load growth into its integrated resource plan (IRP) scheduled for filing in September.
Forecasted data center demand has risen 30% since Q1 to approximately 25 gigawatts, representing roughly 70% of the company's July system peak load. Strategic positioning between the Northern Virginia, US and New Albany, Ohio, US data center hubs is driving demand across Maryland, Pennsylvania, and West Virginia, US.
Total forecasted data center demand, up 30% since Q1.
In West Virginia, US, the company is evaluating a 'Genco' structure for future generation to bypass traditional CPCN timelines and accelerate delivery for data center customers. This structure would still require West Virginia Public Service Commission approval but is viewed as a faster path to meeting urgent timelines. Management noted that while some opposition exists regarding gas versus coal in West Virginia, US, they view new gas generation as additive rather than a replacement for existing coal assets.
The company has also contracted roughly 135 megawatts of manufacturing and industrial load year to date. Management expects an additional 1.5 gigawatts to be contracted within two weeks of the earnings call, primarily across West Virginia, Pennsylvania, and Maryland, US.
