CMS Energy Corp. 10-Q Summary: Period Ended June 30, 2026
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 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 power production). Consumers operates regulated electric and gas utilities in Michigan. The company is a large accelerated filer and is subject to significant regulatory oversight by the Michigan Public Service Commission (MPSC) and the Federal Energy Regulatory Commission (FERC).
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | CMS Energy (Consolidated) | Consumers Energy |
|---|---|---|
| Operating Revenue | $4,559 million | $4,338 million |
| Net Income Available to Common Stockholders | $455 million | $503 million |
| Diluted Earnings Per Share (EPS) | $1.47 | N/A (Wholly-owned) |
| Operating Cash Flow | $1,327 million | $1,240 million |
| Capital Expenditures | $2,006 million | $1,804 million |
| Total Debt (Long-term + Current) | $19,042 million | $12,774 million |
| Cash and Cash Equivalents | $345 million (incl. restricted) | $215 million (incl. restricted) |
Material Changes vs. Prior Period
- Net Income Decline: CMS Energy's net income available to common stockholders decreased by $45 million (9%) to $455 million compared to $500 million in the prior year period. Diluted EPS fell from $1.67 to $1.47.
- Revenue Growth: Consolidated operating revenue increased by $274 million (6.4%) to $4,559 million, driven by rate increases and higher gas sales volumes, partially offset by lower electric sales due to weather and energy waste reduction programs.
- Segment Performance:
- Electric Utility: Net income decreased by $44 million, impacted by higher service restoration costs ($70 million increase) and depreciation, partially offset by rate increases.
- Gas Utility: Net income increased by $9 million, driven by rate increases and higher gas sales, offset by the absence of amortization from a prior Appliance Service Plan (ASP) sale.
- NorthStar Clean Energy: Net income surged by $55 million to $59 million, primarily due to higher earnings from renewable projects and timing of tax benefits.
- Corporate Expenses: Corporate interest and other expenses increased by $65 million, largely due to the absence of gains on extinguishment of debt recorded in the prior year.
Outlook, Guidance, and Material Risks
- Strategic Divestiture: In July 2026, the Board approved a plan to divest certain non-Michigan renewable projects owned by NorthStar Clean Energy and exit non-utility renewables development. Assets are expected to be classified as "held for sale" in Q3 2026. A material impairment charge is possible if sale proceeds are insufficient to recover carrying values.
- 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 August 16, 2026. The net financial impact of compliance through June 30, 2026, was $259 million. Cost recovery is being sought through FERC proceedings, which remain pending.
- Rate Cases:
- 2026 Electric Rate Case: Filed in June 2026, seeking a $481 million annual increase. Final order expected by April 2027.
- 2025 Gas Rate Case: Revised request of $232 million annual increase. Final order expected by October 2026.
- 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 to enhance reliability and support clean energy transition.
- Legal Proceedings: A jury verdict in December 2025 awarded Consumers and DTE Electric $383 million in damages against TAES/Toshiba regarding the Ludington overhaul contract. Post-verdict proceedings and appeals are ongoing.
Investor Verification Checklist
- Divestiture Impact: Monitor Q3 2026 filings for the classification of NorthStar assets as "held for sale" and any associated impairment charges.
- J.H. Campbell Recovery: Track FERC proceedings regarding the $259 million net cost of emergency orders and the status of MISO tariff revisions.
- Rate Case Outcomes: Verify the final orders for the 2026 Electric and 2025 Gas rate cases to confirm authorized revenue increases and return on equity.
- Service Restoration Costs: Assess the MPSC's decision on the deferral application for $57 million in storm-related restoration costs incurred in March 2026.
- Hydroelectric Sale: Monitor the MPSC order expected in September 2026 regarding the sale of 13 hydroelectric dams and the proposed state-administered fund.