SEC Filing Summary: CMS Energy Corporation & Consumers Energy Company
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2026, for CMS Energy Corporation (CMS Energy) and its wholly-owned subsidiary, Consumers Energy Company (Consumers). CMS Energy operates as a holding company with three primary segments: Electric Utility, Gas Utility, and NorthStar Clean Energy (non-utility renewable generation). Consumers operates regulated electric and gas utility services in Michigan. The filing details the company's progress toward its "triple bottom line" of people, planet, and prosperity, including significant investments in grid reliability and clean energy transition.
Key Financial Metrics
| Metric (in millions, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Operating Revenue | $2,730 | $2,447 |
| Net Income Available to Common Stockholders | $338 | $302 |
| Diluted Earnings Per Share (EPS) | $1.10 | $1.01 |
| Operating Cash Flow | $705 | $1,000 |
| Capital Expenditures | $(1,039) | $(888) |
| Cash and Cash Equivalents (End of Period) | $263 | $526 |
| Total Debt (Long-term + Current) | $18,816 | $18,757 |
Note: Debt figures represent the carrying amount of long-term debt plus the current portion of long-term debt and finance leases as of March 31, 2026.
Material Changes vs. Prior Period
- Profitability: Net income increased by $36 million (12%) driven primarily by a $59 million improvement in NorthStar Clean Energy earnings and rate increases in the utility segments. This was partially offset by higher service restoration costs ($30 million), increased depreciation ($25 million), and higher income tax expenses ($17 million).
- Segment Performance:
- Electric Utility: Net income decreased $14 million to $110 million due to higher service restoration costs and depreciation, despite a $25 million benefit from rate increases.
- Gas Utility: Net income increased $7 million to $220 million, driven by a $61 million rate increase benefit.
- NorthStar Clean Energy: Turned profitable with $41 million in net income compared to a $18 million loss in Q1 2025, driven by new project development.
- Cash Flow: Operating cash flow decreased by $295 million to $705 million, primarily due to unfavorable changes in working capital (higher undercollections and timing of vendor payments) and lower net income before non-cash adjustments.
- Capital Spending: Capital expenditures increased by $151 million to $1.039 billion, reflecting continued investment in infrastructure and renewable generation.
Guidance, Outlook, and Material Risks
- Regulatory Developments:
- Electric Rate Case: The Michigan Public Service Commission (MPSC) approved an annual rate increase of $277 million (corrected to $217 million in an errata) effective May 2026, based on a 9.90% return on equity.
- Gas Rate Case: Consumers filed for a $240 million annual rate increase in December 2025; a final order is expected by October 2026.
- J.H. Campbell Emergency Orders: The U.S. Secretary of Energy has issued emergency orders requiring the continued operation of the J.H. Campbell coal plant through May 18, 2026. The net financial impact of compliance for the period through March 31, 2026, was $138 million. Consumers is seeking cost recovery through FERC proceedings, which remain pending.
- Strategic Outlook:
- Renewable Expansion: Consumers plans to file an updated integrated resource plan in June 2026 targeting over 13 GW in expanded renewables and clean energy, including two new natural gas plants (1,500 MW) and significant solar/wind additions.
- Hydroelectric Sale: Consumers signed an agreement in September 2025 to sell 13 river hydroelectric dams, pending regulatory approval. The net book value is currently immaterial.
- Capital Plan: Consumers expects to spend $24.1 billion through 2030, with $15.3 billion allocated over the next five years for distribution and gas infrastructure upgrades.
- Risks and Contingencies:
- Legal: A jury awarded Consumers and DTE Electric $383 million in damages against TAES/Toshiba regarding the Ludington overhaul contract; appeals are pending.
- Tax: An adverse ruling on a state income tax claim regarding MISO sales resulted in an $18 million increase to income tax expense in 2026. CMS Energy plans to appeal to the Michigan Supreme Court.
- Environmental: Ongoing compliance with EPA regulations regarding coal combustion residuals (CCR) and greenhouse gas reporting.
Investor Verification Checklist
- J.H. Campbell Cost Recovery: Verify the status of FERC proceedings regarding the $138 million compliance cost recovery for the emergency orders.
- State Tax Appeal: Monitor the outcome of the Michigan Supreme Court appeal regarding the state income tax apportionment methodology, which could materially impact deferred tax liabilities.
- Hydroelectric Transaction: Track the regulatory approval timeline (MPSC and FERC) for the sale of the 13 hydroelectric dams and the associated 30-year power purchase agreement.
- Capital Expenditure Execution: Assess the company's ability to fund the $24.1 billion capital plan through 2030 amidst potential interest rate volatility and supply chain constraints.
- Working Capital Trends: Review future quarters for stabilization in working capital, specifically regarding power supply cost recovery (PSCR) and gas cost recovery (GCR) undercollections.