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CMS Energy Files Long-Run Clean Energy Plan for Michigan


CMS Energy Corp.’s CMS subsidiary, Consumers Energy, recently announced the filing of an Integrated Resource Plan (IRP) with the Michigan Public Service Commission (MPSC). The crux of the plan is to reduce the company’s use of coal for generating electricity to null, by 2040.

Further, the proposed strategy includes Consumers Energy’s plans to fulfill Michigan’s growing energy demand through increased use of renewable resources and making its grids more energy efficient.

Details of the Plan

As per the proposal, the company aims to increase renewable energy production from the current levels of 11% to 37% by 2030 and 43% by 2040. Further to meet its clean energy goal, it plans to reduce carbon emissions for electricity generation up to 80% by 2040. The proposition also includes shutting down of two aging coal-fired generating units at Karn Generating Complex in Hampton Township in 2023.

Further, as per the plan, Consumers Energy would add 5,000 megawatt (MW) of solar energy throughout 2020’s, in addition to wind and battery storage. Per management, these efforts will help the company to reduce the state’s energy demand 22% by 2040 on heightened energy efficiency, owing to modernized grids. This will also benefit the customers by reducing their energy bills.

CMS Energy’s Long-Term Plans

With the rise in the demand for renewable energy, several companies across the world are increasing their focus on energy efficiency and fossil fuel alternatives. CMS Energy is no exception in this regard, with the company focusing on effectively reducing its carbon footprint. We believe the latest proposal for increasing its renewable energy production is in sync with its agenda to provide a safer environment to its customers.

In this regard, the company plans to bring online Phase III of the Cross Winds Energy Park in 2020, which will add another 76MW of clean energy in its production. Further, in the past five years, CMS Energy has taken a leadership position in reducing carbon emissions, water usage and saving landfill space. Till date, the company has successfully reduced carbon intensity by 38% and reduced water usage by 35% since 2005. It has also avoided over one million cubic yards of landfill disposal. This continued transformation to cleaner fuel sources is a major part of a long-term strategic commitment to protect the planet.

It currently boasts of a strong capital expenditure plan for providing reliable services and infrastructural upgrades. Notably, it aims to invest nearly $18 billion during 2017-2026 for upgrading gas and electric infrastructure, and making significant renewable energy investments.

The aforementioned plans along with the latest one will surely help CMS Energy in achieving its long-term goals, with respect to expanding its renewables portfolio, across Michigan.

Price Movement

CMS Energy’s stock has lost 10.4% in the last one year compared to the industry’s decrease of 9.7%. The underperformance may have been caused by stiff competition, which the company faces in the United States.

Zacks Rank & Key Picks

CMS Energy currently carries a Zacks Rank #2 (Buy). A few other top-ranked stocks in the same space are NRG Energy, Inc. NRG, TerraForm Power, Inc. TERP and Ameren Corporation AEE.

While NRG Energy and TerraForm Power sport a Zacks Rank #1 (Strong Buy), Ameren Corporation carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

NRG Energy delivered an average positive earnings surprise of 507.93% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 10.4% to $3.29 in the last 90 days.

TerraForm Power came up with an average positive earnings surprise of 114.71% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 140.4% to 21 cents in the last 90

Ameren Corporation delivered an average positive earnings surprise of 7.69% in the last four quarters. The Zacks Consensus Estimate for 2018 earnings has risen by 0.3% to $3.04 in the last 90 days.

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