CMS Energy Eliminates More Than 72K Outages With Smart Technology

CMS Energy Corporation CMS recently revealed that its primary subsidiary, Consumer Energy, has been successful in eliminating 72,000 outages in 2024. The key to this success is the company’s significant investment in smart technology, specifically the use of Automatic Transfer Reclosers (ATRs). These devices have approximately saved more than 350,000 hours of potential power loss for CMS’ customers this year.

This effort is part of Consumers Energy’s Reliability Roadmap to improve the grid. The company plans to add more than 100 ATRs this year. Its goal is to ensure that fewer than 100,000 customers lose power during big storms and restore power within 24 hours when outages happen.

Continuous Investment in Grid - A Critical Need

The existing electrical grid and infrastructure are aging, requiring ongoing investment to upgrade and replace outdated equipment. Regular improvements are also essential to prevent power outages, reduce service interruptions and enhance grid reliability, amid growing electricity transmission, with the increasing addition of renewable energy and electric vehicle chargers. Capital investment in electric infrastructure mostly drives these upgrades, thereby ensuring that utilities can deliver a consistent, safe and reliable power supply to their customers.

Looking ahead, per a report by the International Renewable Energy Agency, the world’s leading utility companies announced in September 2024 that they jointly intend to invest more than $116 billion per year in clean power generation and power system grid infrastructure globally in the coming years.

In line with this, CMS Energy has been making efforts to make Michigan’s power grid stronger, reduce outages and speed up repairs, as part of its Reliability Roadmap. Under this strategy, CMS is using infrared cameras to inspect more than 1,100 substations, which has helped save customers almost 20 million minutes of downtime last year.

The company is also installing 1,200 iron poles due to their durability over the wooden ones. These poles can also resist damage from decay or wildlife, helping to reduce power disruptions during storms.

To this end, the company plans to spend $13.6 billion over the next five years to primarily maintain and upgrade its gas infrastructure and electric distribution systems, improve customer satisfaction, reduce energy waste on the aforementioned systems and facilitate clean energy transformation.

Investment Strategy by CMS’ Peers

Other electric utilities like DTE Energy DTE, Consolidated Edison ED and American Electric Power Company, Inc. AEP also have strategic capital investment plans to strengthen their infrastructure.

DTE Energy aims to support a modern, reliable grid and cleaner, affordable energy through investments in base infrastructure and new generation. The company aims to invest $25 billion over the next five years, which implies an 8.7% improvement from its prior five-year investment plan.

DTE delivered an average earnings surprise of 8.89% in the last four quarters. The Zacks Consensus Estimate for 2025 sales indicates year-over-year growth of 4.7%.

Consolidated Edison follows a systematic capital investment plan for infrastructure development and maintains the reliability of its electric, gas and steam delivery systems. The company spent $4.51 billion in 2023 and has a robust capital expenditure plan of $28.05 billion for the 2024-2028 time period.

ED delivered an average earnings surprise of 7.69% in the last four quarters. The Zacks Consensus Estimate for 2024 sales indicates year-over-year growth of 4.2%.

American Electric Power plans to invest $43 billion from 2024 to 2028 in its core regulated operations, contracted renewables and wires. Out of this, $7.4 billion of capital expenditure is expected in 2024.

AEP delivered an average earnings surprise of 0.03% in the last four quarters. The Zacks Consensus Estimate for 2024 sales indicates year-over-year growth of 5.7%.

CMS Stock’s Price Performance

Shares of CMS have gained 21.8% in the year-to-date period compared with the industry’s 21.6% growth.

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CMS’ Zacks Rank

CMS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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