CMSエナジー 2026年第3四半期決算説明会：業績予想を維持、270億ドル規模のIRP

CMSエナジー（NYSE: CMS）は、年初来利益の増加を報告した後、2026年および2027年の調整後EPS見通しを据え置きました。また経営陣は、約270億ドルの長期リソース投資機会、ノーススター・クリーン・エナジーの事業再編の進展、ならびにミシガン州の供給区域全体における電力需要の継続的な拡大を強調しました。

主なポイント

• 年初来の調整後純利益は9億1,500万ドル（1株当たり2.95ドル）に達しました。調整後EPSは前年同期比で0.29ドル増加しました。
• CMSエナジーは2026年の調整後EPS見通しを3.83ドル〜3.90ドルに据え置き、レンジの上限付近での達成に引き続き自信を示しました。
• 同社は2027年の調整後EPS見通しを4.08ドル〜4.17ドルに維持し、年複利7%以上と定義する長期成長目標（6%〜8%）についても上限付近を目指す方針を維持しました。
• CMSエナジーの統合リソース計画（IRP）では、2040年までにクリーンエネルギー、蓄電池、天然ガス発電に約270億ドルの潜在的投資を行うことが概要として示されています。
• ノーススター・クリーン・エナジーの資産の35%以上で契約締結または取引完了に至っています。経営陣は事業再編が年内に完了し、現在の5カ年計画において5億ドル以上の資金調達効果をもたらすと見込んでいます。
• CMSエナジーは自社の供給区域において約745MWの新規電力供給契約を締結し、そのうち約450MWはすでに受電を開始しています。なお、これらの数値には2026年はじめに締結された大型データセンターとの契約は含まれていません。

主要財務データ

事業および業績

統合リソース計画が長期的な設備投資機会を創出

CMSエナジーが提出した統合リソース計画（IRP）には、承認済みの再生可能エネルギー計画での10.8GWに対し、15.8GWのクリーンエネルギーリソースが含まれています。また、従来の850MWから引き上げられた4.1GWの蓄電池、ならびに1.4GWの新規シンプルサイクル天然ガス発電も含まれています。

経営陣は、この計画によりクリーンエネルギー、蓄電、ガス発電に約270億ドルの投資が裏付けられると試算しています。計画にはエネルギー効率化やバーチャルパワープラント（VPP）の選択肢も含まれています。

同社は、電力購入契約（PPA）に対する財務報酬メカニズム（FCM）により、50対50の所有比率を前提として、2031年から年間約1億2,500万ドルの利益を生み出し、2040年までに約1億9,500万ドルへ増加すると予想しています。経営陣によると、2031年の目標を支える契約の70%以上がすでに締結済みまたは稼働中とのことです。提出された計画には、最近締結された680MWのクリーンエネルギーPPAが含まれています。

ノーススターの事業再編は計画通り進行中

ノーススター・クリーン・エナジーの資産の35%以上で契約締結または取引完了に至っており、残りの大半の資産についても買い手との独占交渉段階にあります。経営陣は事業再編が年内に完了すると見込んでいます。

CMSエナジーは、ディアボーン・インダストリアル・ジェネレーション、複数の小型ガスピーク電源、および4つの商用太陽光発電プロジェクトを保有し続けます。同社は、事業再編により5カ年計画内で5億ドル以上の資金調達効果が得られ、親会社の資金調達ニーズを削減すると同時に公益事業への投資を支援すると見込んでいます。

経営陣は2027年以降、収益成長のほぼ100%を規制下の公益事業が占めると予想しています。

製造業と半導体分野が牽引する電力需要の増加

CMSエナジーは累計で約745MWの新規契約を締結し、約450MWの送電を開始しました。経営陣によると、増加分は主に製造業や半導体分野の顧客によるものであり、5カ年計画に組み込まれている年率2%〜3%の電力需要増を後押ししているとのことです。

計745MWの数値には、2026年はじめに締結された大型データセンターとの契約は含まれていません。同プロジェクトは複数の候補地で都市計画（ゾーニング）審査が進められている段階です。これに関連する設備投資資金は、現在の設備投資計画にはまだ含まれていません。

経営陣は、必要となる供給能力やクリーンエネルギーリソースに応じて、1GWの追加需要に対し約20億ドルから50億ドルの設備投資が必要になる可能性があるとの認識を改めて示しました。

投資の実行においては規制当局の決定が引き続き鍵に

ミシガン州公益事業委員会（MPSC）は、CMSエナジーのガス料金改定申請に対し、最終要求額の約60%に相当する1億3,900万ドルの値上げを承認しました。この決定には株主資本利益率（ROE）9.8%および自己資本比率50%が含まれています。

改定された電気料金改定申請において、CMSエナジーは4億4,300万ドルの増収、ROE 10.25%、自己資本比率51.75%を要求しました。委員会スタッフは、改定要求の60%に相当する2億6,500万ドルの値上げ、ROE 9.85%、自己資本比率50%を勧告しました。

経営陣は1月下旬に決定提案書が出され、2027年4月初旬までに電気料金審議の最終決定が下されると予想しています。

経営陣による業績見通し

CMSエナジーは以下の目標を再確認しました：

• 2026年調整後EPS： 3.83ドル〜3.90ドル（上限付近の達成に引き続き自信）。
• 2027年調整後EPS： 4.08ドル〜4.17ドル（ノーススターの事業再編の影響を含む）。
• 長期調整後EPS成長率： 6%〜8%（上限付近、または年複利7%以上）。
• 5カ年計画の年間電力需要成長率： 2%〜3%（契約済みの大型データセンター契約による追加のプラス要因を除く）。
• 料金ベース成長率： 10.5%（既存の設備投資計画が下支え）。FCMによる収益は加算されるものであり、この料金ベース成長率の数値には含まれていません。

同社は第4四半期決算発表時に、5カ年公益事業設備投資計画、広範な財務計画、およびセグメント別業績見通しを更新する予定です。

リスクおよび注視事項

• 年内に事業再編を完了させ、見込まれる資金調達効果を実現するには、残りのノーススターに関する取引を完了する必要があります。
• 立地審査やその他の条件を満たす必要があるため、データセンター関連の設備投資は現在の計画に追加されていません。経営陣は、大型データセンターの電力需要は計画の後半から2030年代前半にかけて緩やかに増加すると予想しています。
• CMSエナジーはディカップリング（収益と販売量の分離規制）が適用されていないため、業績は販売量の影響を受けやすくなっています。経営陣は天候、暴風雨、販売量の変動に備えて予備費（コンティンジェンシー）を保持しています。
• 承認される増収額、ROE、自己資本比率を含む電気料金審議の最終結果は、引き続き規制委員会の審査対象となっています。
• 経営陣はミシガン州のFCMの潜在的な変更を廃止ではなく細部の見直し（リファインメント）と捉えていますが、同メカニズムは引き続き州の政策議論の一部となっています。
• 公益事業レベルにおけるムーディーズのアウトルック「ネガティブ（弱含み）」の解消は、現在進行中の電気料金審議における料金回収および承認自己資本比率に一部依存します。

アナリスト質疑応答のハイライト

FCMの持続可能性： 経営陣はFCMが廃止されることはないと見込んでいると述べました。現在の規制議論については、特定のPPA契約や減価償却が完了した資産に関する潜在的な細部調整であると説明しました。なお、これらの減価償却済み水力発電資産は同社のFCM予測には含まれていません。

データセンターのパイプライン： 経営陣は、ミシガン州におけるデータセンター開発環境は引き続き好調であると述べました。契約済みの大型需要プロジェクトは都市計画審査が進んでおり、その他の見込みプロジェクトも用地取得を進めています。CMSエナジーは、大口需要家向け料金体系（タリフ）が一般家庭顧客にデータセンターの費用負担をかけないよう設計されていることを強調しました。

設備投資計画上の取り扱い： 締結済み契約を反映する必要があるため、大型データセンターは統合リソース計画（IRP）に含まれていますが、関連する設備投資はまだ5カ年計画に組み込まれていません。経営陣は、立地審査などの条件が満たされた後、その支出の追加を検討すると述べました。

ノーススター事業からの売却資金： 経営陣は、資産売却が当初予想していた5億ドル以上の資金調達効果に対して好調に推移していると述べました。売却益は親会社の資金調達ニーズを軽減し、次回の資金計画および設備投資計画に組み込まれます。

再投資： 天候による好影響、暴風雨繰延費用の回収、ノーススターの事業業績により、電力の信頼性向上、ガス事業、顧客サービス、デジタル生産性への投資に対する柔軟性が生まれています。経営陣は、これらの投資によって2027年の実行リスクが軽減されるはずだと述べました。

業績説明会（コーニングスコール）全文字起こし

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Good morning, everyone, and welcome to the CMS Energy 2026 Third Quarter Results. The earnings news release issued earlier today and the presentation used in this webcast are available on CMS Energy's website in the Investor Relations section. This call is being recorded. [Operator Instructions] Just a reminder that there will be a rebroadcast of this conference call today beginning at 12:00 p.m. Eastern Time running through November 3. This presentation is also being webcast and is available on CMS Energy's website in the Investor Relations section.

At this time, I would like to turn the call over to Mr. Jason Shore, Treasurer and Vice President of Investor Relations.

Jason Shore

Thank you, Piercy. Good morning, everyone, and thank you for joining us today. With me are Garrick Rochow, President and Chief Executive Officer; and Sri Maddipati, Executive Vice President and Chief Financial Officer. This presentation contains forward-looking statements, which are subject to risks and uncertainties. Please refer to our SEC filings for more information regarding the risks and other factors that could cause our actual results to differ materially. This presentation also includes non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in the appendix and posted on our website.

And now I'll turn the call over to Garrick.

Garrick Rochow

Thank you, Jason, and thank you, everyone, for joining us today. I always start with our investment thesis because it is a durable and proven model that has delivered for more than 20 years of consistent industry-leading performance for all stakeholders. For our customers, it enables important investments in safe, reliable and clean energy across our electric and gas systems while maintaining affordable bills. For our investors, it delivers a premium total shareholder return, made up of 6% to 8% adjusted EPS growth toward the high end, which reflects 7% or better compounded annually impaired with an approximately 3% dividend yield.

And as shared on our Q2 earnings call, with the restructuring of NorthStar Clean Energy, our model is further simplify as we exit nonutilities renewable development and deliver approximately 100% regulated utility earnings growth after 2027. Let's start with NorthStar. As of today, we have more than 35% of the assets at signed agreements or closed. There continues to be strong interest across the remaining assets with the majority of these assets in exclusivity with buyers. In summary, good progress. We are on track to complete the restructuring by year-end.

As a reminder, as part of this restructuring, we retain Dearborn Industrial Generation or DIG, several small gas peakers and 4 commercial solar projects. all of which generate strong cash flows and support our long-term growth strategy. This restructuring strengthens our balance sheet and allows us to produce over $500 million of funding within our current 5-year plan for use at the utility, supporting important and needed customer investments in our systems. Simply put, nearly 100% regulated utility earnings growth after 2027, reduced parent funding requirements, improved earnings quality. This restructuring strengthens our business model and positions the company to make the long-term utility investments our customers' need.

Speaking of customer-focused utility investments, in September, we filed our long-term Integrated Resource Plan, or IRP, outline how we will meet Michigan's clean energy targets while ensuring reliable electric service through 2040. The IRP details in all of the above resource strategy that combines natural gas, solar, wind, pump storage and battery storage to deliver reliable, affordable and cleaner energy for Michigan customers. We foreshadowed a portion of these customer investment opportunities in previous earnings calls.

But as noted on the slide, the plan includes 15.8 gigawatts of clean energy resources an increase of our already approved renewable energy plan of 10.8 gigawatts, 4.1 gigawatts of battery, an increase over our previous plan of 850 megawatts. In 1.4 gigawatts of new simple cycle gas generation to replace the aging oil and gas-fired peakers at our current 3 and 4 plants and to ensure reliability of the electric grid. The plan further reflects energy waste reduction and virtual plant options that help customers save money while providing additional earning opportunities.

In summary, our IRP provides significant capital investment opportunity of roughly $27 billion in new clean energy resources, battery storage and gas generation. Another important aspect of the plan is the ability to earn power purchase agreements. Frankly, it's a differentiator in our sector. The IRP assumes a financial compensation mechanism or of approximately $125 million beginning in 2031, growing to approximately $195 million by 2040, assuming a 50-50 ownership split.

On the right side of the slide, we've offered visibility into how the value of the FCM has progressed over the last few financial plans and the path to achieve those earnings. The ability to earn in a capital-light way has grown as we have signed more PPAs for renewables, batteries and clean energy. Of note, the filed IRP includes a recently signed large clean energy PPA of 680 megawatts. This PPA derisks new renewable development supports Michigan's clean energy targets delivers the energy and capacity our customers need while ensuring the continued strength of our balance sheet. I look forward to sharing more details at the EEI conference in November.

I'm also pleased to share we continue to deliver on the approximately 900 megawatts of growth that supports the 2% to 3% annual loan growth we've highlighted within our 5-year plan period. As noted on the slide, we've added approximately 745 megawatts of new contracts in our service territory, and we've energized more than half of that load or approximately 450 megawatts. Essentially, we are adding the equivalent of a large data center through primarily the manufacturing in semiconductor industries, and it comes with more jobs and other tertiary benefits, such as supply chain, housing starts and potentially higher margin commercial and residential growth.

And keep in mind, this does not include the large load agreement, a large data center signed earlier this year. That project continues to progress through zoning in multiple locations, and I expect further movement after the elections. I continue to be proud with what the CMS Energy team has delivered and know that the benefit of growth flows to our customers as we spread fixed costs across a larger customer base driving affordability and while these opportunities create jobs and strengthen our communities and our state.

As we turn to the regulatory calendar, I'll highlight the constructive order from the commission in our gas rate case, approving $139 million or approximately 60% of our final ask, a 9.8% ROE and 50% equity ratio. The commission order delivers another proof point of the constructive regulatory environment in Michigan and supports the important and needed investments in our gas distribution system.

In October, we filed our revised or updated electric rate case requesting a $443 million revenue increase a 10.25% ROE and a 51.75% equity ratio. Staff also filed their position in October recommending $265 million revenue increase or 60% of our revised ask, a 9.85% ROE and 50% equity ratio. Additionally, staff supported our storm deferral recovery for the 2025 storms within the electric rate case and the commission approved the deferral of 2026 Q1 storms in August, furthering our confidence in recovery and evidence of a constructive regulatory environment in Michigan.

If I pull up from the details and reflect on the entire electric rate case, SaaS position is constructive, a good starting point, and there are opportunities we'll pursue in the rebuttal process to ensure we support the important and needed investments to improve reliability and that the record further reflects our reasonable sales forecast for both residential and commercial growth. We expect the PFD position in late January in a final order by early April of next year.

Now on to the financials. Year-to-date, we reported adjusted earnings per share of $2.95. We are reaffirming our full year 2026 guidance of $3.83 to $3.90 per share with continued confidence toward the high end. Our financial performance has positioned us to reinvest in the business, derisking future years in further enhancing service for our customers.

We are also reaffirming our 2027 guidance of $4.08 to $4.17 per share, which incorporates the NorthStar restructuring. Longer term, we continue to guide toward the high end of our adjusted EPS growth range of 6% to 8%. Finally, as we've done in previous years, will provide an update on our year-end call regarding the roll forward of our 5-year utility capital plan and broader financial plan.

With that, I'll hand the call over to Sri.

Srikanth Maddipati

Thank you, Garrick, and good morning, everyone. I'm excited to be with you all this morning and to provide an update on our business. Today, my remarks will largely focus on continued execution through 2026 and our reinvestment of favorable performance, which will benefit customers, strengthen next year and future long-term growth as well as an update on our financing activities and how we'll continue to leverage the benefits of restructuring NorthStar into our annual planning process.

Given the progress Garrick highlighted in our IRP, we see plenty of opportunities between rate base and FCM on PPAs in our supply business. In addition, there is a robust capital backlog in both our electric and gas distribution businesses. We'll provide an update of our capital plan in Q4 for our normal practice.

Starting on Slide 9, we have the standard waterfall chart, which illustrates the key drivers of our financial performance through the first 9 months of 2026 and our year-to-go assumptions for meeting our full year guidance range. where we plan to deliver toward the high end. Year-to-date, the company delivered adjusted net income of $915 million or $2.95 per share, which will note excludes the restructuring activities at NorthStar and is $0.29 favorable to last year.

We're trending ahead of last year and are well positioned relative to plan, reflecting strong execution at the utility, including constructive regulatory outcomes as well as completion of the Michigan solar projects we are retaining at NorthStar. Favorable weather in the quarter and benefits from the storm referral give us greater flexibility as we manage the remainder of the year, including weather and storm risk, while continuing to reinvest in the business to benefit customers and strength in 2027 and beyond.

Compared to last year, you can see that weather results in a $0.05 unfavorable variance. However, from a planning perspective, we assume normal weather. So relative to plan, we have benefited $0.08 year-to-date, primarily driven by Q3 cooling degree days. New rates net of investment costs resulted in a positive variance of $0.34 with the benefits of last year's gas rate order, new electric rates from earlier this year and continued investments in renewable projects at the utility. We were pleased with the commission's approval of the storm referral in Q3, offsetting the full year impact of the ice storm earlier in the year.

Year-to-date, O&M is unfavorable $0.16 primarily due to additional storm activity as well as a portion of the reinvestments we have already made across the business, including electric reliability, gas operations, customer service and digital investments that will enhance future productivity. The $0.16 of favorable variance in parent and other has been primarily driven by NorthStar performance with much of that being reinvested back into the business, which I'll touch on in a moment.

Looking at the remainder of the year, we are well positioned to meet our financial objectives in 2026, as Garrick noted. Our assumptions already reflect an unrivaled variance of $0.09 for normal weather. With our 2026 regulatory outcomes complete, we're confident in the positive variance of $0.08 in the fourth quarter for rates net of investments. From an O&M perspective, we expect to net $0.10 of favorable variance given our conservative planning assumptions for storm activity. This already accounts for $0.10 of reinvestments to improve safety, reliability and enhance future productivity, as previously noted. As always, will remain flexible throughout the quarter and look to take advantage of additional opportunities to reinvest for customer benefits that will strengthen future years.

Closing out the glide path for the remainder of the year in the bar on the right-hand side, you'll note $0.09 to $0.16 of negative variance, which incorporates the flexibility we have for the rest of the year for contingency or to reinvest back into the business. We remain well positioned to deliver toward the high end of our guidance range while maintaining the flexibility to manage the remainder of the year and continue investing for the long term.

Moving to Slide 10. You'll note that our planned financing for the year is nearly complete, given the 900 million utility first mortgage bonds we raised in the third quarter, all within our planning assumptions. From an equity perspective, at the parent, we've completed $495 million at attractive prices relative to plan. For the remaining equity, we'll continue to match the pricing and issuance relative to our needs given the NorthStar restructuring where I'd be disappointed if we're not above the $500 million funding benefit Garrick noted. We're already optimizing those benefits this year, and we incorporate it into our 5-year planning cycle.

From a debt maturity perspective, we have approximately $625 million maturing at the parent next year. Keep in mind, our conservative approach already incorporates interest rates consistent with where the market is today. So we'd look to potentially derisk next year by pulling some of that refinancing forward. Also, I'll remind you that nearly all our debt is fixed rate. I'm confident in the strategy we are executing to deliver on our objectives this year and strengthen the plan going forward, and I look forward to sharing more in the future.

Now I'll turn the call back to Garrick before we take your questions.

Garrick Rochow

Thanks, Sri. At CMS Energy, we deliver every year for 23 years, consistent industry-leading performance regardless of circumstances, you can count on CMS Energy to deliver for all of its stakeholders.

With that, Piercy, please open the lines for Q&A.

Operator

[Operator Instructions] Your first question comes from Shar Pourreza with Wells Fargo.

質疑応答

Marcella Petiprin

This is Marcello on for Shar. Then DSC has had some commentary recently on the FCM specifically as it relates to contracts, you're legally obligated to enter. But just more broadly, how should we be thinking about durability of the FCM and energy policy Michigan postelection?

Garrick Rochow

The short answer is we don't see the FCM going away, but let me talk a little more about that. And I'm glad you brought up the FCM because we've been very deliberate including in our slide deck, right? It's on the right-hand side of -- I don't remember the slide number, I think Slide 5 there. But I think it's one of the things that's most underestimated by our investors, the ability to grow FCM over time, and we're showing that in that graph. The ability to grow up to 2031 and beyond to $125 million and then even to 2040 to $190 million.

And Marcella, you won't know this about me, my mom was a math teacher. And she would always say to me, like, show your work, like you drilled that into me in junior high. And that's what we're doing right here in the context of this FCM. You can see in that slide, in Slide 5 that it's highlighted, right? There's goes from darker blue to light blue. That's the show of the progress we've made. In 2031, over 70% of of those contracts are already signed or online. And so that creates the visibility and clarity and for me, confidence of our ability to deliver on that. And so I just want to highlight that in context of this because, again, I think it's a differentiator in our story. I want to make sure I bring attention to that.

In terms of the MPSC, the commission in their words, in their letter of the governor, recognize the value of the FCM and particularly third-party solutions that come at a lower cost. And so this is about a discussion around the higher FCM. This is about refinement, particularly around PPA contracts and assets that are fully depreciated. And so I really view this as a refinement of the FCM, not eliminated in the context of affordability. And that's why I came out strongly and said, "We don't see the FCM going away. In fact, it's one thing that we want to highlight during this call, just the potential upside there."

Srikanth Maddipati

Yes. And the only thing I'd note to Garrick's comments were -- the depreciated assets largely talk about river hydros. We didn't include that into our projection of the FCM. In fact, we asked to use those proceeds to derisk future safety at those funds. So the FCM that we have here contemplated is within the law and really isn't reflective of the contracts, the commission highlights.

Marcella Petiprin

Super helpful. And then just because it's pretty topical right now, given the latest gubernatorial debate posturing and kind of a high relative number of moratoriums in Michigan. How should we be thinking about the data center opportunity window relative to manufacturing and other opportunities, but just how should we be thinking?

Garrick Rochow

The short answer is strong. I still -- I mean, across both candidates and our current governor, but let me offer some more context around this. Politics, Sri says this, I love him when he says this, "politics do not equal policy. And some of the spend that you see leading up to election does not equal a reality. And what we know, and we showed in that slide, it's the last slide in my prepared remarks, that regardless CEO, CFO, governor, legislature, MPSC and weather, we deliver. And it's based on the principle, we work with everyone.

And that's easy to say, harder to do, but that's what we do. We do it year after year by finding common ground. There's common ground on affordability and there's common ground on data centers. right? And we see this with both candidates that are running, are supportive of those investments in Michigan and the jobs that come with it and the property tax value. No one said no data centers. In fact, they've talked about responsible data centers for that as well.

In fact, our electric tariff for data centers or large load agreement, does just that. It's responsible and again, who pays and so our residential customers are not burdened with the data center. And so we need to do more of that in terms of water and wastewater and noise and land as a state. That's the important work that to be done. And I bet the data centers will continue to move forward after the elections here. But again, just back to my beginning remarks, I see a strong environment for data center growth across Michigan.

Operator

Your next question comes from Jeremy Tonet with JPMorgan.

Garrick Rochow

Good morning, Jeremy. I look forward to seeing you soon in EEI.

Jeremy Tonet

Yes, see you soon. Looking forward to it. I was just wondering if you could provide maybe a little bit more color on large load expectations there in the cadence. You see coming forward. There was the funnel in prior slides. And so just looking to see how you think about that at this point? How far different initiatives are advanced? And I'll leave it there for now.

Garrick Rochow

Well, to be super clear, we heard that feedback this morning. We didn't include the slide. Look, we -- like we could provide the slide. That's not -- it's a little bit like watching Michigan play football. You can spend a lot of time looking at the plays, but you've got to get it across the end zone. You got to get across the goal line. And so we provide in this deck really along the lines of economic development.

We're showing our work, again, going back to my mom, show your work, 745 megawatts. It's been signed. 450 is already energized. A lot of that's in the manufacturing space. You've heard me talk before about the benefits and value of that. So we're showing that. We're showing that important work and what that means for the day, what that means for jobs, what that means for -- and confirming our sales growth that's in our financial plan of 2% to 3%.

Now we can talk data centers, and we're happy to talk data centers. Multiple data centers continue in the state. That's the pipeline. We signed one in Q2. We shared that in the Q2 earnings call. That's continued to progress in multiple locations across the state. From a zoning perspective, one of the areas where they're located, they just released their draft zoning ordinates. And so the company is in fact, reviewing that right now and providing feedback. So I see that as, again, as a positive step. And another data center, actually, a couple of data centers are acquiring more land within the state. So again, we continue to see positive progress along those lines, and I see more progress after we get through the elections here shortly.

Jeremy Tonet

Got it. That's helpful. And then I just want to pick up again, in the past, you talked about 1 gigawatt could drive $2 billion to $5 billion in CapEx and just wondering if we should still think about that relationship and specifically as it relates to IRP and the $27 billion of long-term CapEx, how you think this could enter the plan over time, forward thoughts there?

Srikanth Maddipati

Yes. Jeremy, I think that's still a good way to look at it, $2 billion to $5 billion, and that really just bifurcated between just the capacity needed and then the clean energy that's needed over time. As it relates to the IRP, we'll incorporate that into our annual process. Keep in mind, our current plan doesn't recontemplate having a data center in it. So our future plans will incorporate the IRP capital, which largely isn't data center-related nor is the FCM. So we'll incorporate that as we roll forward

Operator

Your next question comes from Richard Sunderland with Truist Securities.

Richard Sunderland

Thanks for the time today. Turning back to NorthStar, the 35% of assets that signed agreement were closed and kind of that buyer interest for the remainder. Could you speak a little to that versus expectations last quarter into the process maybe just progress overall and where it's trending versus sort of your internal modelling?

Garrick Rochow

I think Sri and I will tag team this one, but I'm very pleased with the progress from where we stand and the 35% of the assets that are either a purchase sale agreement or closed. And so that's trending well. And then in the context of exclusivity with the buyers, that's well underway. So we're not just at the beginning of that. And so closing in on purchase and sales agreement. And that's why we're, again, offer the commentary that restructuring will be complete by year-end, and we're on target from that perspective. But Sri, please.

Srikanth Maddipati

Yes. The only thing I would add is, as you know, we're on track and the use of funding we noted in the Q2 call, at least $500 million, like I said here, I mean just wondering if we were above that, and so trending positively relative to that. All of that will help parent funding needs, which will roll into our Q4 financing plan along with our capital programs.

Richard Sunderland

Turning back to some of the broader policy considerations, elections, pre and post considerations. Can you speak a little bit more to kind of the utility issue side, particularly regulatory changes and the appetite to address that? Maybe how stakeholder conversations on that front are trending? And if you have any updated thoughts on how that may or may not get picked up after the elections in 2027.

Garrick Rochow

Yes. The -- just from an investment community, there appears to be a lot of noise on Michigan. And I would tell you right here on the ground, I'm confident in our ability to navigate. And frankly, we've got -- we've built good relationships with all the governor candidates, many of the legislature and as a result of just doing business here in Michigan for a long time. And as I shared here, we've delivered 23 years by finding common ground by this principle we work with everyone.

When it comes to common ground, particularly around affordability, whether you're public an independent or Democrat, people can align around that. And I've talked about it on a number of these calls and investor meetings of the 2 papers I run around with and talk about affordability and look for common ground, and I think there's a lot of ways to do that. One is in the context of multiyear rate plans that provide editability for our customers. One -- two, we've talked about in terms of personal property tax and hundreds of millions of savings for customers and that pass-through that shows up. We've talked about it in state permitting reform. I know we're talking about federal right now, but also state permitting reform it help from a cost perspective.

Chair scripts within the corner set a letter to the governor. And if you go through that letter like I have, you can say, yes, yes, yes, we should be doing a number of those things, particularly in terms of low to moderate income, that's right now in the state, there's all kinds of policy improvement that can be done in the context of low to moderate income customers.

So what I'm laying out, Rich, is like, here's the place for common ground and how do we work for affordability. And so again, we see that as important steps as we go into 2027 and further and beyond that, to be able to continue to find and continue our position as 15 plus builds from a nation perspective in terms of electric and just continue to position utility in the right way to make the important investments for all stakeholders. So I hope that offers some good context for you.

Richard Sunderland

No, that's great. Appreciate the flavor for all of that. Thanks, Garrick.

Operator

Your next question comes from James Ward with Jefferies.

Jamieson Ward

We've got another NorthStar question for you here. So NorthStar has contributed $0.62 through September. Guidance for the year was $0.25 to $0.30 back in February. How should we think about the NorthStar contribution in your current full year guidance? And then how much of the third quarter benefit reverses in the fourth quarter? And what sort of tail amount, if any, is left for 2027?

Srikanth Maddipati

Yes. Thanks, James, for the question. A couple of things on NorthStar related to guidance. Obviously, realizing benefits as we brought some of those projects to COD. So let's having NorthStar overperforming our planned guidance for the year. Some of that will reverse some of that's just timing on taxes. So when we book kind of effective tax rates, you kind of do it evenly and some of that will reverse in the fourth quarter.

And in terms of kind of rolling into '27, we've already incorporated the fact that we're selling some of the assets, so that's already been our '27 guide. And then some of the taxable equity pieces will roll off into '27 that's already baked in. We'll share kind of segment guidance as we go through the fourth quarter.

Jamieson Ward

Got you. And then on '27, your reliability storms and productivity bucket is about $0.12 lower for the year than the July plan, but weather is obviously $0.12 better is that reinvestment? And is the 2027 range built off the higher 2026 cost base or the July 1? And then how much of the fourth quarter spend will be 2027 were pulled forward? Just trying to get a sense as we head into next year at a level set as we go much more utility nearly all utility focused.

Srikanth Maddipati

Got it. You're kind of mixing the '26 and '27, so I'll see if I can parse that out for a second. Some of what you have on the to-go is just conservative planning, right? We're playing conservatively for storms to make sure we have enough there for that. But then that number is net of reinvestments that we're going to be making here over the course of the fourth quarter. So significant flexibility there to kind of reinvest in the business.

That all derisks '27. Some of that will be pull forward, and we'll continue to have those options as we go through the year. But we've got to keep in mind, we're not decoupled. So we're also making sure that we have enough contingency as we look forward to the year for sales as well.

Jamieson Ward

Terrific. And we look forward to kicking off EEI with you guys at lunch on Sunday.

Operator

Your next question comes from Nicholas Campanella with Barclays.

Nicholas Campanella

I just wanted to be clear and follow up on the prior question from Jeremy on just the data center opportunity set. Just the 745 megawatts in the context of you talking about making more progress after the election here, is that something that we can just kind of wrap in to expect in the full year update that you're going to give in the fourth quarter? Is that where that is trending? Or I just wanted to level set there.

Garrick Rochow

Let me offer some context and Sri may want to also join in some context on this. So what we've framed there is 745 megawatts, that does not include the large load agreement data center. So that's just -- I call it singles and doubles. We're just stacking up semiconductor manufacturing, food processing. There's one medium-sized data center in that mix, but much of that is already online. And so again, that's built into the plan. It's built into our IRP. We're showing, again, the 2% to 3% load growth that we have in our current 5-year plan.

The capital investments that will come with this new data center are not yet incorporated to our plan. We'll see that through from a zoning perspective. And again, I have optimism as I see that playing out from in multiple jurisdictions. But Sri, please.

Srikanth Maddipati

Yes. Like Garrick said that the 2% to 3% sales growth already baked into our 5-year plan, the debt adding a data center would push us above that as well as the capital above that. So that would get incorporated as we execute on that. So this is already incorporated into plan. It's just executing against it and we continue to see strong momentum in that space as we sign up customers across a number of industries.

Nicholas Campanella

Yes. I meant the 745, sorry about that. So just one other follow-up was just the 6% to 8% growth plan towards the high end, which reflects 7% or better compounded annually. Just I guess, how are you guys kind of framing it? Is it closer to 7%? Or is it kind of closer to 8%, understanding that you've kind of historically underpromised and overdelivered.

Garrick Rochow

Let me start with 2026. I think because everything builds off of 2026. And so just a framing for everyone here. So as we said on the call, 6% to 8% toward the high end. And again, that's 7% or better. And we've offered commentary here that we're reinvesting for the benefit of customers. particularly in terms of reliability in our gas business in digital, which improves productivity. And then all derisking 2027, which is beneficial for our stakeholders.

And so here me when I say this, I have a great deal of confidence in our ability to deliver in our guidance for 2026 as we've framed up during this call. And I would suggest we're well positioned for 2027 as well. But as we normally do, in Q4, we updated our capital plan, we update our financial plan. We updated our earnings guidance. that are consistent from a process perspective, and we'll do that. But I'll remind everybody on this call, and we've shared it in the materials and in our speaking in our prepared remarks is our long-term guidance continues to be 6% to 8%, and toward the high end, which we framed up as 7% or better.

Operator

Your next question is from Michael Sullivan with Wolfe Research.

Michael Sullivan

I wanted to ask a little more on this new FCM customer that you signed up. Is it all one customer? And are you expecting these to be this chunky going forward? And just given the progress already, like what -- how do you think about layering in any potential upside if you start tracking ahead of the $125 million target by '31?

Srikanth Maddipati

Yes, Michael, I'll take it. So that's not a customer. Keep in mind, these are suppliers. We earn with the FCM, those people who are -- we are contracting with. And that is one individual supplier that we're contracting with and we're making progress as we bring that into our portfolio starting in 2031. So we feel pretty confident about that. There's some more work we have to do on the ground to move that forward. But I'd expect that we incorporate those benefits as we roll forward the plan here in the fourth quarter.

Michael Sullivan

Okay. That makes sense. And then just on the regulatory front. I think you're going to go right back in for another gas case and one of your peers in the state, I think, was about to do that and kind of change their mind. So just curious if that had come up at all. And in the electric case, just any thoughts around potentially trying to move the needle on the equity ratio. I know that's something that's been hoped for, for a little while now.

Garrick Rochow

Yes, I can't speak to what DTE's approach is. I'll leave that for DTE and their call. But again, one of the benefits we see as an annual rate case filer is bringing back the savings to our customers, whether that shows up in the CEA and digital and where we see savings, we bring that back, whether that's in our appliance service plan and other tax benefits we bring the savings back, whether that's in the context of low growth, and we see that both in our gas and electric business, we bring back those -- that savings opportunity for customers and sharing some of those fixed costs across the system.

And so by annual rate cases, we're bringing that back, which creates the important headroom to make needed investments in the system, right? When customers have an outage, there's a real cost to that. We need to be able to make those investments in our electric system. We want to ensure a safe natural gas system without events. We want to make sure we're on the path to clean energy and compliance. And so those aren't at odds with one another. In fact, commission has been very supportive. And throughout these annual rate case processes we've been able to achieve constructive outcomes. We've been pleased with the outcomes. And we continue to work hard to make sure that's going to happen.

But again, -- so again, the current system works for us, and we continue to get the outcomes we need for all stakeholders. Now I've been on the record since early in 2026 to talk about the potential for multiyear rate plans, which offer predictability for customers. I think there's a right way to do that and assuming we can do that in the right way. And build it into law, I think provides a much more durable means of providing some benefit for customers and other stakeholders. And so rather than just a stay-out provision, which to me doesn't provide the durability for the long term.

Operator

Your next question comes from Anthony Crowdell with Mizuho.

Garrick Rochow

Always my favorite meeting at EEI, right there.

Anthony Crowdell

Thanks. But you're having lunch with Jamieson. Just quickly, you guys -- small minor detail is a very thorough call. Just the opco where consumers the utility, Moody's says a negative outlook, you're stable at the parent. Just -- does that add any additional project maybe see a financing or change, I think, with the financing at the parent company thoughts on maybe moving that to stable.

Srikanth Maddipati

Kind of as you noted, Anthony, the outlook is actually at the utility. And so a lot of that is just going to be dependent on actions at the utility. We've noted in our kind of cases and the first time the commission is really going to have an opportunity to look at that, what's on the direct record is in the electric case where we're looking for a 51.75% equity ratio. So I'd expect that Moody's will look at that as they kind of both on a qualitative and quantitative perspective but the quantitative aspect being rate recovery and specifically equity ratio.

Operator

Your next question comes from Andrew Weisel with Scotiabank.

Andrew Weisel

First question, and you sort of alluded to this a little bit, but the IRP load forecast includes the data center, but your capital plan does not. Help me just understand that disparity? Why do you see those differently? And I know your CapEx update is being in February. How should we think about whether you will or won't match those 2 things up? Or will there always some distirities between those?

Garrick Rochow

Well, first of all, let me just answer the short answer, and then I'll hand it over to Shri here as it's required. When we sign a contract, it's required to include in the integrated resource plan. And so -- and again, we model a variety of different scenarios. And again, there's -- as we've shown throughout this call, low growth in terms of manufacturer and industrial midsized data centers as part of the mix. And then we layer in the Sion tracks as well. And so that's just within the policy, within the work of the integrated resource plan, we need to include that.

But Sri talked a little bit more about the capital.

Srikanth Maddipati

Yes. Just keep in mind, Andrew, when we rolled the 5-year plan out, we hadn't actually had a contract signed with -- or an agreement signed with that large center. So nowadays, it's in the IRP. As we roll it forward, we're going to make sure we incur all the conditions precedent, which includes siting, right? So making sure those are in before we include that capital.

I'll just remind you those -- that customer doesn't come on Ryan really and energized until the back half of the plan to begin with. So it's a slow ramp even if it was included out into that early 2030 time frame. So we'll take a look at that as we make more progress between now and the end of the year to incorporate some of that in. But in terms of actually incorporating the IRP, it's required. So when we roll things into our plan, we're a little bit more conservative than that.

Andrew Weisel

Makes sense. And then I know you certainly wouldn't build speculatively, but should you be successful with maybe moving just one data center, maybe a couple. At what point would it justify the need for a CCGT? I know they're very expensive, but at what point in terms of the demand side and in terms of timing based on your conversations with customers in the funnel that's not in the slides anymore. How should we think about the need for potential baseload capacity?

Garrick Rochow

Well, we don't build speculatively, just to be super clear about that. But 1 of the things the FDM does and allows us greater flexibility because we can leverage developers, we can leverage existing assets to bring energy and capacity. And so in the context, yes, we hold ourselves to. So again, that offers a lot of ability to be able to, as we secure additional data centers to be able to adapt to their needs. And again, they have a ramp-up schedule, which we've talked about in the context that we match. We work to match as well.

Srikanth Maddipati

The only thing I would add is we have in the IRP, there is a combined cycle playing out in 2040. But that would -- if we continue to add load there, Andrew, we'd like to bring that forward and pulling it in closer than 2040.

Andrew Weisel

Okay. Sounds good. One last one, if I may, on the regulatory side. You alluded to the PSC letter to the outgoing governor this summer. How do you think about some of -- there are a lot of issues in there. Where do you see opportunities that you're maybe optimistic about? Where do you see some potential areas of concern? Garrick, you talked about policy improvement around the low and moderate income customers and affordability. What were some other ideas that maybe cut your interest?

Garrick Rochow

It's just as important what's not in the letter. I mean you see some states that are going after ROE and equity thickness. That's not in the letter, right? And they acknowledge where we are from a bill perspective, 15th lowest bills in the nation. -- right? They acknowledge that we've stayed below the rate of inflation. And so I think in the context of that letter, people want to point to the potential negative of it. I saw it as a lot of positive, just those 4 things alone.

But if you kind of walk through that letter like -- what's the #1 thing out there, your rate plans and the predictability, again, done in the right way. I mean, I think that's the important piece. You talk about the balance of that in both sides of it, Andrew, is doing the right way. And so that all stakeholders benefit from that. And so we're working on that, right? And we'll see how that plays out here in 2027. There's a lot of great things in there in the low to moderate income space. Like it is difficult for a customer that struggles to be able to get assistance in the state.

You have to go from organization to organization, you have to fill out a lot of paper multiple times versus 1 way, 1 means 1 source of data that they share to be able to streamline that process. We make it very difficult for those that need within the state of Michigan to get service. We of fix that. There's -- in that letter, like the bottom half of that letter is just that the low to moderate income space, like we should say yes to all of those, right, and figure out those from a policy perspective.

And so again, there's also pluses and minuses to everything. But from my perspective, there's a lot of great things in that letter that we can do from an affordability perspective. If it gets back to Tom and ground. And I think you can find common ground and affordability. And that's how we're approaching things through this period up until the election and after the election and which gives me confidence, like regardless of who's governor, who is in the legislature that will be successful.

Andrew Weisel

Makes a lot of sense. I'll follow up offline to find out where you and James are having lunch. I'm going to crash that lunch. I'll see you guys soon. Thank you.

Operator

Your next question comes from Sophie Karp with KeyBanc.

Sophie Karp

So I just wanted to ask you, are you still -- do you get a rating 10.5% rate base CAGR long term? Or is that number kind of like under at this point because I don't see them in current deck.

Srikanth Maddipati

You cut off, but I think you said 10.5% I think you said 5% and our rate base CAGR is 10.5%. That's still supported by...

Sophie Karp

[indiscernible]

Srikanth Maddipati

Yes, yes, 10.5%, yes, exactly right. So that's still supported by our capital plan, and we're going to update our capital plan here in the fourth quarter. And as Garrick, we've got a lot of opportunity from that what that doesn't include, Sophie, just keep in mind is any of the growth that we get out of the FCM. So that's additive to that.

Sophie Karp

So I'm just curious, what drove the decision to kind of train the disclosure in this deck. You've moved some references to rate base and what more customer kind of progression. Is it simply a change how you're presenting? Or should we read something more into it?

Srikanth Maddipati

I wouldn't read much into itself the other than you got the third quarter and we got a brief call. So we'll continue to update our plans, but I wouldn't read anything into it on that basis.

Garrick Rochow

Let me just reiterate that, there should be nothing you should read it. There should nothing you should read into this. This is just being efficient with a number of slides. And when we get to EEI, we have that rich full many page deck will certainly include the funnel and some other components that people are used to seeing. It's just about being efficient for the quarter call.

Sophie Karp

Okay. We look forward to that EEI deck.

Operator

We have reached the end of the Q&A session. I will now turn the call back to Mr. Garrick Rochow for closing remarks.

Garrick Rochow

Thanks, Pierce. I'd like to thank you for joining us today, and we look forward to seeing many of you at the EEI conference. Take care and stay safe.

Operator

This concludes today's conference. We thank everyone for your participation. You may now disconnect.