Dive Brief:
- CMS Energy, parent of Consumers Energy, reported a 10% rise in first quarter earnings over last year, putting the company on track to meet its earnings target for 2014.
- Weather-normalized electricity sales rose 1.7% over the past year, with a strong performance in Michigan associated with rising GDP. But CMS Energy told industry analysts the company doesn’t expect sales to grow at the same rate, with a more conservative 0.5% growth predicted.
- Looking ahead, the company announced it would need to add between 1,000-2,500 MW of new capacity to its portfolio due to coal plant retirements, ending power purchase agreements and possible re-regulation.
Dive Insight:
"In 2015, we see the possibility of an increase in the RPS, continuation of energy efficiency goals, regulatory improvements and the potential elimination of retail open access," CEO John Russell said.
"There are some people who believe that competition is the right thing to do. The message we'll continue to tell them is we're a pretty unique industry. We make electricity. It moves at the speed of light. You can't store it. Therefore, it is the most volatile commodity in the world," Russell said. "People found out how volatile that commodity can be" during the recent polar vortex. "Our large customers, in particular, want to have competitive rates and predictability. They don't want volatility."
"With the possibility of customers returning to bundled service, the capacity needs may be even larger," CFO Tom Webb said. "If we build 1,000 MW of new capacity, we likely will need to build or secure 2,500 MW just to replace EPA-related plant closures."
