CMS Energy Sees $5 Billion+ Capacity Expansion Opportunity Amid 2-3% Sales Growth Outlook

CMS Energy Corporation has signaled a $5B+ capacity expansion opportunity as a new data center ramps up, amid a 2-3% sales growth outlook. CEO Garrick J. Rochow highlighted a major agreement with a new data center expected to add up to 1 gigawatt of incremental load, part of a 9-gigawatt pipeline.

Title: CMS Energy Signals $5B+ Capacity Expansion Opportunity with New Data Center

CMS Energy Corporation (CMS) has signaled a significant capacity expansion opportunity as a new data center ramps up, amidst a 2-3% sales growth outlook. During the company's Q2 2025 earnings call, CEO Garrick J. Rochow highlighted a major agreement with a new data center expected to add up to 1 gigawatt of incremental load, part of a 9-gigawatt pipeline.

Rochow emphasized that this new data center is expected to start showing its impact in the latter portion of the company's 5-year plan. Additionally, he noted ongoing positive momentum with other data centers contingent on finalizing a data center tariff. The CEO also pointed to Grand Rapids’ robust growth and Michigan's ranking among the top 10 states for business, reinforcing long-term annual sales growth estimates of 2% to 3% before the new data center is fully online.

The CEO introduced early insights into the upcoming integrated resource plan (IRP), targeting over $25 billion in customer investments beyond the current 5-year plan. This includes new storage and gas capacity requirements to meet anticipated capacity needs, plant retirements, and expiring PPAs. Rochow stated that the first cut looks like an additional $5 billion of opportunity outside the 5-year plan, though he noted that this number could be higher.

The company's financial performance in Q2 2025 was robust, with adjusted net income of $518 million or $1.73 per share, which compares favorably to the same period in 2024. This was largely due to the absence of unfavorable weather from the prior year and continued constructive regulatory outcomes. The company reaffirmed its full-year guidance at $3.54 to $3.60 per share, expressing continued confidence toward the high end.

Management indicated that the anticipated ramp-up of the new data center load would begin in 2029 or 2030, providing flexibility for resource planning and investment beyond the current outlook. The company also highlighted its progress in the 9-gigawatt pipeline, noting that it is conservative and expects additional customers to convert when a data center tariff is finalized.

CMS Energy's stock closed at $72.17 on July 30, near its 52-week high of $76.45, reflecting investor confidence despite a challenging first quarter. The company's strong balance sheet, with solid investment-grade ratings, supports its ambitious capital investment plans. CMS Energy remains focused on leading the clean energy transformation while driving economic development in Michigan.

References:
[1] https://seekingalpha.com/news/4475799-cms-energy-signals-5b-capacity-expansion-opportunity-as-new-data-center-ramps-up-amid-2-3
[2] https://www.investing.com/news/company-news/cms-energy-q2-2025-presentation-clean-energy-investments-drive-growth-outlook-93CH-4162484