CMS Energy Corporation (NYSE:CMS) Q4 2022 Earnings Call Transcript

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Rejji Hayes: Yes, so usage non-weather sales, I just provided that in the other question. But like I said, it’s flat to slightly up, I would say, about – 25 basis points up all in. We expect residential down over 0.5% as folks come back to pre-pandemic levels. And then you’ve got commercial up about 0.5 point and then 1.5% to 2% for industrial, again, excluding one large low margin customer. The other big bucket within that $0.19 to $0.25 is just, remember. We had a little of discretionary activities in the fourth quarter. So namely, you’ve got the VRM which was $22 million, and then you’ve got another $25 million of electric rate case commitments and so all in that $47 million of Q4 lack is about $0.12. That does not need to take place in the fourth quarter of this year.

And so when you think about that comp of Q4, ’22 versus Q4, 2023, you see a lot of that in there. So I’d say it’s a combination of those sort of discretionary items that don’t need to recur. And then you’ve got – I’d say relatively modest load assumptions. We’ve got a little bit of uptick in NorthStar as well. That’s the other component of that. And as you can see, we delivered actuals of $0.12 per share at NorthStar in 2022 and the guide for this year 2023 is $0.13 to $0.16. So that’s a piece of it as well. It’s really those pieces. Is that helpful?

Durgesh Chopra: Yes, absolutely. Usage and half of it looks like the Q4 flex from ’22 to ’23 and a couple of pennies at NorthStar?

Rejji Hayes: Bingo.

Durgesh Chopra: Thanks so much. Appreciate the time guys, thank you.

Garrick Rochow: Thank you.

Operator: The next question comes from Anthony Crowdell from Mizuho. Anthony, your line is open. Please go ahead.

Anthony Crowdell: Hey good morning, thanks for squeezing me in here. Just hopefully two quick ones, one was on DIG. Is there a desired amount of capacity you want to leave open in the plan? Do you look longer term and say we want to keep 50% open or 40% open? Are you guys are more opportunistic on that?

Garrick Rochow: Well, right now, if you look at ’23, ’24, ’25, it’s 100% or pretty close to it. So we want to in the upcoming two to three years, we want to fully subscribe – from a capacity and energy perspective. And as you layer in contracts time you get up to 2025, ’26 it approaches 50%. So there’s room there. And absolutely, we’re going to take advantage of opportunities in the energy and capacity markets to layer that in so some longer-term contracts to see really to take advantage of the opportunity out there is with energy and capacity prices. Does that help, Anthony?

Anthony Crowdell: Yes, absolutely. And then lastly, if I want to maybe look a little longer here, your next IRP filing, I mean the IRP, the guys finished, I guess, I don’t know, the ’22 or ’21, very successful, transformational. What’s the timing of the next IRP? And what’s that going to look like?

Garrick Rochow: It just feels like I got through that this year with the settlement, like I’m celebrated. I’m still in my victory lap of that IRP. It was a landmark. And now you’re asking about the next one, yes.

Anthony Crowdell: Parked and Lightning in the garage before you do the victory lab yes.

Garrick Rochow: So we have to be in there within five years. It’s usually a three to five years though. We don’t have a plan yet on when that will be. It usually helps to be in around three years just because of the timing of the cycles and of recovery, but no set time yet at this point Anthony, sorry, I can’t give you a date yet, but we’ll work towards here – the next few years.

Anthony Crowdell: Great, thanks so much for taking my questions.

Garrick Rochow: Thank you.

Operator: The next question is from Travis Miller from Morningstar. Travis, please go ahead. Your line is open.

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