{"schemaVersion":1,"research":true,"symbol":"cms","name":"Cms Energy","topic":"moat","path":"/stock/cms/moat","status":"published","version":4,"updatedAt":"2026-10-18T00:40:02.247Z","locked":false,"publicFairValue":false,"fairValue":null,"moat":{"verdict":"narrow","summary":"CMS Energy has a narrow moat centered on Consumers’ established utility infrastructure and Michigan’s statutory limit on alternative electric generation supply. Actual rate increases and approved cost recovery support regulated earnings protection, but pricing discretion is limited. Alternative supply is already at the statutory cap, investment requires substantial external financing, and recent consolidated earnings weakened. The passages do not establish a separate moat for NorthStar Clean Energy.","advantages":[{"mechanism":"efficient_scale","claim":"Consumers’ extensive operating infrastructure, combined with Michigan’s cap on alternative electric generation service at 10 percent of sales subject to exceptions, protects its incumbent utility position. Approved cost-recovery mechanisms provide additional economic support. This establishes a current advantage without establishing unrestricted monopoly pricing or a separate generation cost advantage.","durability":"The installed infrastructure and existing statutory framework support persistence over multiple years. Durability depends on continued regulatory protection, adequate recovery of investment and operating costs, and reliable service; it is not guaranteed.","risks":"Alternative electric generation deliveries already reach the 10-percent limit, demonstrating actual competitive participation. Regulatory decisions constrain prices and investment recovery. Conservation and competing fuels can reduce demand. Capital spending exceeds operating cash generation, while mandated continued coal-plant operation introduces recovery uncertainty. NorthStar’s planned renewable divestiture carries potential impairment risk.","invalidation":"Reassess the moat if statutory changes materially expand alternative supply and Consumers loses substantial generation demand; if customers materially bypass its infrastructure; or if repeated rate disallowances and unrecovered investment prevent adequate economic recovery. Sustained deterioration in reliability or demand despite continued investment would also undermine the assessment.","competitors":[],"evidenceIds":["e1","e2","e5","e6","e7","e8"],"counterEvidenceIds":["e3","e4","e9","e10","e11","e12","e13","e14","e25"]}],"evidence":[{"id":"e1","sourceId":"filing-1","location":"Executive Overview—2025 operating achievements and infrastructure","excerpt":"During 2025, CMS Energy and Consumers: •connected over 140,000 customers with $60 million in energy-bill assistance and helped make over $100 million in statewide aid available for 2026, reinforcing Consumers’ commitment to affordability •began operations at Muskegon Solar Energy Center, a 1,900‑acre project generating 250 MW of clean energy to power 40,000 homes and businesses, supporting Michigan’s energy needs and advancing the company’s long‑term clean energy strategy •reached an agreement with a new data center expected to add more than 1 GW of incremental load growth in our service territory, supporting long-term sales growth and delivering economic benefits for Michigan •expanded the use of drone technology enabling faster, safer inspections of 400 miles of hard-to-reach power lines and infrastructure resulting in reduced average outage time per customer and improved storm recovery capabilities •announced the launch of “Green Giving,” a program enabling the general public to contribute to renewable energy while offering financial benefits to low-income customers, along with a new Residential Renewable Energy Program, which allows customers of all income levels to subscribe and match their energy usage with renewable energy sources, supporting clean energy initiatives •moved forward with an aggressive plan to enhance grid reliability for nearly 2 million homes and businesses by clearing trees along 8,000 miles of power lines and creating a modern, stronger, and more resilient power grid through infrastructure upgrades and technology investments •deployed eight state-of-the-art vehicles that survey the company’s nearly 30,000‑mile gas distribution system to find methane emissions, enhancing safety and reliability for Consumers’ natural gas customers •experienced success with the underground power line pilot program in early 2025, with pilot areas seeing 100‑percent reduction in storm-related outages and improved customer satisfaction CMS Energy and Consumers will continue to utilize the CE Way to enable them to achieve world class performance and positively impact the triple bottom line."},{"id":"e2","sourceId":"filing-2","location":"Consumers Electric Utility Outlook—delivery drivers and Electric ROA statutory cap","excerpt":"Actual delivery levels will depend on: •energy conservation measures and results of energy waste reduction programs •weather fluctuations •Michigan’s economic conditions, including data center expansion; utilization, expansion, or contraction of large commercial and industrial facilities; economic development; population trends; electric vehicle adoption; and housing activity Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at 10 percent of Consumers’ sales, with certain exceptions."},{"id":"e3","sourceId":"filing-2","location":"Electric ROA—actual deliveries at statutory limit","excerpt":"At June 30, 2026, electric deliveries under the ROA program were at the 10‑percent limit."},{"id":"e4","sourceId":"filing-2","location":"Electric ROA—customers purchasing alternative generation service","excerpt":"Fewer than 300 of Consumers’ electric customers purchased electric generation service under the ROA program."},{"id":"e5","sourceId":"filing-2","location":"Consumers Gas Utility Results of Operations—realized rate increases and earnings bridge","excerpt":"Consumers Gas Utility Results of Operations Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for the three and six months ended June 30, 2026 versus 2025: In Millions Three Months Ended Six Months Ended June 30, 2025 $ 25 $ 238 Reasons for the change Gas deliveries1 and rate increases Rate increase $ 29 $ 90 Lower other revenues (7) (5) $ 22 $ 85 Maintenance and other operating expenses Absence of ASP sale gain amortization2 (4) (16) Higher maintenance and other operating expenses (5) (16) (9) (32) Depreciation and amortization Increased plant in service, reflecting higher capital spending (3) (16) General taxes Higher property taxes, reflecting higher capital spending (3) (8) Other income, net of expenses — 4 Interest charges (7) (15) Income taxes Increase in tax reserves3 — (6) Higher gas utility pre-tax earnings — (5) Absence of state deferred tax remeasurement 4 4 Higher other income taxes (2) (2) 2 (9) June 30, 2026 $ 27 $ 247 1For the three months ended June 30, deliveries to end-use customers were 46 Bcf in 2026 and 49 Bcf in 2025."},{"id":"e6","sourceId":"filing-1","location":"Note 20—approved recovery of retirement-related employee retention costs","excerpt":"The MPSC has approved recovery of these retention costs over three years."},{"id":"e7","sourceId":"filing-2","location":"Note 7—pension and OPEB costs and approved recovery or refund mechanism","excerpt":"Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans: In Millions DB Pension Plans OPEB Plan Three Months Ended Six Months Ended Three Months Ended Six Months Ended June 30 2026 2025 2026 2025 2026 2025 2026 2025 CMS Energy, including Consumers Net periodic credit Service cost $ 6 $ 7 $ 12 $ 13 $ 2 $ 2 $ 4 $ 4 Interest cost 25 27 50 54 9 11 19 22 Expected return on plan assets (59) (57) (119) (114) (31) (28) (62) (56) Amortization of: Net loss 3 2 7 5 — 1 — 2 Prior service cost (credit) 1 1 2 2 (8) (8) (16) (17) Settlement loss 2 2 5 5 — — — — Net periodic credit $ (22) $ (18) $ (43) $ (35) $ (28) $ (22) $ (55) $ (45) Consumers Net periodic credit Service cost $ 6 $ 6 $ 12 $ 12 $ 2 $ 2 $ 4 $ 4 Interest cost 24 25 47 51 9 11 19 21 Expected return on plan assets (56) (54) (112) (108) (29) (26) (58) (52) Amortization of: Net loss 3 3 6 5 — 1 — 2 Prior service cost (credit) 1 1 2 2 (8) (9) (16) (17) Settlement loss 2 2 5 5 — — — — Net periodic credit $ (20) $ (17) $ (40) $ (33) $ (26) $ (21) $ (51) $ (42) In Consumers’ electric and gas rate cases, the MPSC approved a mechanism allowing Consumers to defer for future recovery or refund pension and OPEB expenses above or below the amounts used to set existing rates."},{"id":"e8","sourceId":"filing-2","location":"Consumers consolidated balance sheets—installed assets and financing","excerpt":"57 Table of Contents Consumers Energy Company Consolidated Balance Sheets (Unaudited) ASSETS In Millions June 30 2026 December 31 2025 Current Assets Cash and cash equivalents $ 130 $ 25 Restricted cash and cash equivalents 85 86 Accounts receivable and accrued revenue, less allowance of $32 in 2026 and $27 in 2025 962 1,210 Accounts and notes receivable – related parties 8 15 Inventories at average cost Gas in underground storage 414 427 Materials and supplies 336 316 Generating plant fuel stock 60 31 Deferred property taxes 350 479 Regulatory assets 81 104 Prepayments and other current assets 198 132 Total current assets 2,624 2,825 Plant, Property, and Equipment Plant, property, and equipment, gross 37,175 36,120 Less accumulated depreciation and amortization 10,177 9,842 Plant, property, and equipment, net 26,998 26,278 Construction work in progress 3,102 2,354 Total plant, property, and equipment 30,100 28,632 Other Non-current Assets Regulatory assets 3,274 3,355 Accounts receivable 24 24 Accounts and notes receivable – related parties 87 88 Postretirement benefits 1,910 1,821 Other 247 346 Total other non-current assets 5,542 5,634 Total Assets $ 38,266 $ 37,091 58 Table of Contents LIABILITIES AND EQUITY In Millions June 30 2026 December 31 2025 Current Liabilities Current portion of long-term debt and finance leases $ 466 $ 579 Notes payable – related parties — 340 Accounts payable 1,100 1,229 Accounts payable – related parties 12 14 Accrued rate refunds — 28 Accrued interest 150 149 Accrued taxes 509 747 Regulatory liabilities 96 85 Other current liabilities 146 163 Total current liabilities 2,479 3,334 Non-current Liabilities Long-term debt 12,308 11,524 Long-term debt – related parties 1,005 1,005 Non-current portion of finance leases 178 81 Regulatory liabilities 4,152 4,091 Postretirement benefits 68 70 AROs 763 753 Deferred investment tax credit 116 118 Deferred income taxes 3,321 3,201 Other non-current liabilities 388 336 Total non-current liabilities 22,299 21,179 Commitments and Contingencies (Notes 2, 3, and 8) Equity Common stockholder’s equity Common stock, authorized 125.0 shares; outstanding 84.1 shares in both periods 841 841 Other paid-in capital 9,949 9,094 Accumulated other comprehensive loss (13) (13) Retained earnings 2,674 2,619 Total common stockholder’s equity 13,451 12,541 Cumulative preferred stock, $4.50 series, authorized 7.5 shares; outstanding 0.4 shares in both periods 37 37 Total equity 13,488 12,578 Total Liabilities and Equity $ 38,266 $ 37,091 The accompanying notes are an integral part of these statements."},{"id":"e9","sourceId":"filing-2","location":"Consumers consolidated cash flows—operating cash, capital expenditures and financing","excerpt":"56 Table of Contents Consumers Energy Company Consolidated Statements of Cash Flows (Unaudited) In Millions Six Months Ended June 30 2026 2025 Cash Flows from Operating Activities Net income $ 504 $ 534 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 693 651 Deferred income taxes and investment tax credits 87 66 Other non‑cash operating activities and reconciling adjustments (102) (80) Changes in assets and liabilities Accounts and notes receivable and accrued revenue 221 95 Inventories (37) 33 Accounts payable and accrued rate refunds (123) 59 Other current assets and liabilities (28) 125 Other non-current assets and liabilities 25 (4) Net cash provided by operating activities 1,240 1,479 Cash Flows from Investing Activities Capital expenditures (excludes assets placed under finance lease) (1,804) (1,519) Cost to retire property and other investing activities (85) (113) Net cash used in investing activities (1,889) (1,632) Cash Flows from Financing Activities Proceeds from issuance of debt 849 1,123 Retirement of debt (175) (57) Decrease in notes payable — (65) Decrease in notes payable – related parties (340) — Stockholder contribution 855 150 Payment of dividends on common and preferred stock (449) (417) Other financing costs 13 (20) Net cash provided by financing activities 753 714 Net Increase in Cash and Cash Equivalents, Including Restricted Amounts 104 561 Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period 111 119 Cash and Cash Equivalents, Including Restricted Amounts, End of Period $ 215 $ 680 Other Cash Flow Activities and Non‑cash Investing and Financing Activities Non‑cash transactions Capital expenditures not paid $ 497 $ 425 The accompanying notes are an integral part of these statements."},{"id":"e10","sourceId":"filing-2","location":"CMS consolidated income statements—2026 operating income, interest and earnings","excerpt":"48 Table of Contents CMS Energy Corporation Consolidated Statements of Income (Unaudited) In Millions, Except Per Share Amounts Three Months Ended Six Months Ended June 30 2026 2025 2026 2025 Operating Revenue $ 1,829 $ 1,838 $ 4,559 $ 4,285 Operating Expenses Fuel for electric generation 104 134 324 351 Purchased and interchange power 455 439 906 819 Purchased power – related parties 14 30 34 48 Cost of gas sold 102 124 618 507 Maintenance and other operating expenses 464 397 912 802 Depreciation and amortization 308 288 720 676 General taxes 118 109 291 271 Total operating expenses 1,565 1,521 3,805 3,474 Operating Income 264 317 754 811 Other Income (Expense) Non-operating retirement benefits, net 50 47 101 89 Other income 29 95 57 109 Other expense (4) (5) (8) (11) Total other income 75 137 150 187 Interest Charges Interest on long-term debt 211 199 420 386 Interest expense – related parties 3 3 6 6 Other interest expense 5 — 4 (1) Allowance for borrowed funds used during construction (9) (3) (17) (6) Total interest charges 210 199 413 385 Income Before Income Taxes 129 255 491 613 Income Tax Expense 33 62 118 125 Net Income 96 193 373 488 Loss Attributable to Noncontrolling Interests (24) (8) (87) (17) Net Income Attributable to CMS Energy 120 201 460 505 Preferred Stock Dividends 3 3 5 5 Net Income Available to Common Stockholders $ 117 $ 198 $ 455 $ 500 Basic Earnings Per Average Common Share $ 0.38 $ 0.67 $ 1.48 $ 1.68 Diluted Earnings Per Average Common Share $ 0.37 $ 0.66 $ 1.47 $ 1.67 The accompanying notes are an integral part of these statements."},{"id":"e11","sourceId":"filing-2","location":"Consumers Gas Utility Outlook—demand drivers and competing fuels","excerpt":"Actual delivery levels will depend on: •weather fluctuations •use by power producers •availability and development of renewable energy sources •gas price changes •Michigan’s economic conditions, including population trends and housing activity •the price or demand of competing energy sources or fuels •energy efficiency and conservation impacts Gas Rate Matters: Rate matters are critical to Consumers’ gas utility business."},{"id":"e12","sourceId":"filing-2","location":"J.H. Campbell Emergency Orders—continued availability and requested cost recovery","excerpt":"Campbell available in the MISO market and, in June 2025, filed a complaint at FERC seeking a modification of the MISO Tariff that would enable Consumers to recover the costs of complying with the emergency orders."},{"id":"e13","sourceId":"filing-2","location":"Other Information—July 22, 2026 board-approved renewable divestiture plan","excerpt":"Item 5. Other Information On July 22, 2026, the CMS Energy Board of Directors approved a plan to divest certain renewable projects owned by NorthStar Clean Energy and to exit non-utility renewables development."},{"id":"e14","sourceId":"filing-2","location":"Other Information—conditional impairment exposure on planned divestiture","excerpt":"If the estimated fair value less costs to sell of the disposal group is less than its carrying value, impairment charges may be required and CMS Energy could record a material impairment charge in the third quarter of 2026."},{"id":"e15","sourceId":"filing-2","location":"Cash Position, Investing, and Financing—completed common-share issuance","excerpt":"During the same period, CMS Energy settled all of the remaining forward sale contracts under this program by issuing approximately 6.5 million shares at a weighted average price of $75.80 per share, resulting in net proceeds of $495 million."},{"id":"e16","sourceId":"filing-2","location":"Consumers Gas Utility Results—six-month end-use deliveries","excerpt":"For the six months ended June 30, deliveries to end-use customers were 181 Bcf in 2026 and 184 Bcf in 2025."},{"id":"e17","sourceId":"filing-2","location":"Consumers Gas Utility Results—regulator-approved sale-gain offset instead of rate relief","excerpt":"2In 2024, Consumers sold its unregulated ASP business to a non-affiliated company, and the MPSC subsequently approved the application of a portion of the gain as an offset to the revenue deficiency in lieu 27 Table of Contents of additional rate relief during the 12‑month period beginning October 1, 2024, which concluded in September 2025."},{"id":"e18","sourceId":"filing-2","location":"2025 Gas Rate Case—requested revenue components and pending final order","excerpt":"Presented in the following table are the components of the requested increase in revenue: In Millions Projected 12-Month Period Ending October 31 2027 Investment in rate base $ 93 Operating and maintenance costs 61 Cost of capital 77 Sales/gross margin 1 Total $ 232 The MPSC must issue a final order in this case before or in October 2026."},{"id":"e19","sourceId":"filing-3","location":"Compensation Discussion and Analysis—2025 performance-based equity grants","excerpt":"For 2025, 75% of the equity compensation granted to the NEOs was performance-based, designed to reward measurable results."},{"id":"e20","sourceId":"filing-3","location":"Compensation Discussion and Analysis—2025–2027 performance vesting conditions","excerpt":"Vesting of such awards is subject to the achievement of relative TSR performance and relative LTI EPS growth goals, weighted equally, over a three-year performance period of January 1, 2025 to December 31, 2027."},{"id":"e21","sourceId":"filing-3","location":"Executive compensation governance—existing incentive safeguards","excerpt":"As a result, we have: •a majority of pay in variable elements; •a majority of variable pay in LTI awards; •a majority of LTI delivered in performance-based restricted stock; •all LTI denominated and settled in equity; •LTI payouts capped at target if three-year absolute total shareholder return performance is not positive; •a balance of absolute and relative metrics used in annual incentives and LTI; •stock ownership guidelines for NEOs, which exclude stock options and unvested performance-based restricted stock awards when determining compliance; •change-in-control agreements that require a double-trigger for the accelerated vesting of equity awards; •a policy that prohibits hedging and pledging of the Corporation's securities by officers; •annual reviews of risk within our incentive programs; •annual reviews of our Compensation Peer Group and Performance Peer Group; •regular briefings from the Compensation Committee's independent compensation consultant regarding key trends and legislative and regulatory updates; •no excessive perquisites; no planes, cars, clubs, or financial planning with an annual physical examination being the principal perquisite provided to our executives in 2025; •no dividends paid on unvested performance-based restricted stock awards; in lieu of dividends, recipients receive additional shares of restricted stock that are contingent on the same performance measures and forfeiture conditions applicable to the underlying restricted stock; •no employment agreements - our executive agreements are limited to separation and change-in-control agreements with base salary and annual incentive separation amounts not exceeding three times the NEO's base salary and annual incentive amount, with an average of two times; and •no tax gross-ups - none of our separation or change-in-control agreements contain tax gross-ups."},{"id":"e22","sourceId":"filing-3","location":"Corporate governance—board independence, elections and leadership structure","excerpt":"Impact on \"Triple Bottom Line\" Highlights •100% Clean Energy Goal - Consumers electric business by 2040 •Net Zero Methane Emissions Goal from Consumers natural gas delivery system by 2030 •Sustainability Report •Biodiversity Report •Employees paid fairly and competitively •Safety Policy •Business Employee Resource Groups •91% of our Directors are Independent - 100% on Audit, Compensation, Finance and Governance Committees •Annual election of all Directors •Simple majority voting provisions •Majority voting standard for uncontested Director elections •Annual Advisory Say-on-Pay Vote •Policy prohibiting Directors and Officers from pledging or hedging our stock •Proxy access bylaws •Annual Board and Committee self-evaluations •Individual Director peer evaluations •Chairman of Board is independent and separate from the CEO CMS ENERGY 2026 PROXY STATEMENT 3 Table of Contents PROPOSAL 1: ELECT THE DIRECTOR NOMINEES, NAMED IN THIS PROXY STATEMENT, TO THE BOARD OF DIRECTORS There are 11 nominees for election as Directors of CMS and Consumers, to hold office until the next annual meeting of shareholders and until their successors are elected and qualified."},{"id":"e23","sourceId":"filing-3","location":"Board leadership—actual 2025 independent-director executive sessions","excerpt":"In 2025, the CMS independent Directors met four times and the Consumers independent Directors met four times."},{"id":"e24","sourceId":"filing-3","location":"Appendix A—2023–2025 GAAP continuing-operations EPS and incentive EPS reconciliations","excerpt":"CMS ENERGY 2026 PROXY STATEMENT 72 Table of Contents APPENDIX A: SUPPLEMENTAL INFORMATION FOR THE COMPENSATION DISCUSSION AND ANALYSIS — GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”) RECONCILIATIONS CMS - Reconciliation of GAAP Earnings Per Share (“EPS”) to Annual Incentive Plan EPS 2023 2024 2025 EPS Reported — GAAP basis — — — EPS from Continuing Operations Reported - GAAP basis $3.01 $3.33 $3.53 Exclude (income)/loss items: Large restructuring and severance expenses greater than $5 million 0.13 0.01 — Tax Impact (0.03) * — Legal/settlement costs or gains related to previously sold assets — — * Tax Impact — — — Federal and State Tax Law — — 0.04 Tax Impact — — — Business Optimization and S/4 Implementation — — 0.04 Tax Impact — — — Total Exclusions 0.10 0.01 0.08 Annual Incentive EPS $3.11 $3.34 $3.61 * Less than 1∕2 cent CMS ENERGY 2026 PROXY STATEMENT A-I Table of Contents CMS - Reconciliation of GAAP EPS to LTI EPS 2023 2024 2025 EPS Reported — GAAP basis — — — EPS from Continuing Operations Reported - GAAP basis 3.01 3.33 3.53 Exclude (income)/loss items: Large restructuring and severance expenses greater than $5 million 0.13 0.01 — Tax Impact (0.03) * — Legal/settlement costs or gains related to previously sold assets — — * Tax Impact — — — Federal and State Tax Law — — 0.04 Tax Impact — — — Regulatory Disallowance — — — Tax Impact — — — Business Optimization and S/4 Implementation — — 0.04 Tax Impact — — — Total Exclusions 0.10 0.01 0.08 LTI EPS $3.11 $3.34 $3.61 * Less than 1∕2 cent Management views adjusted EPS as a key measure of our present operating financial performance and uses adjusted EPS for external communications with analysts and investors."},{"id":"e25","sourceId":"filing-2","location":"Electric Supply Plan—regulatory approval requirement for resulting contracts","excerpt":"Any resulting contracts are subject to MPSC approval."}],"changes":["No comparable previous version was supplied."],"limitations":["The sources are filings dated February 10, March 26 and July 28, 2026, each with dateKind filed. No subsequent regulatory orders, divestiture completion or impairment outcomes are supplied.","No named company is established as a competitor in these passages. Named co-owners, counterparties, subsidiaries and advisers are not treated as competitors; alternative suppliers and competing fuels are disclosed generically.","The electric generation choice cap is explicit, but distribution exclusivity, franchise duration, gas switching rights and comparative network economics are not fully disclosed.","Operating achievements are issuer-reported. The underground-line pilot result does not demonstrate equivalent performance across the whole network, and prospective data-center load is not realized demand.","The passages support actual gas rate increases but do not provide a complete electric pricing history, customer renewal statistics or segment margin series. Retention is assessed indirectly from continued deliveries and the statutory framework.","The supplied proxy establishes existing compensation and governance arrangements, but not complete executive ownership compliance or realized vesting outcomes for the 2025–2027 awards. Proposed shareholder-rights amendments are not treated as adopted.","Approved deferral or recovery mechanisms do not establish immediate cash collection or recovery of every cost. A return equal to the cost of capital would not alone establish excess economic returns."],"qualityAssessments":[{"category":"moat","checks":[{"criterion":"structural_advantage","grade":3,"rationale":"The explicit alternative-generation cap and extensive operating utility assets establish a strong incumbent position. The evidence does not establish superior generation costs or absolute distribution exclusivity.","evidenceIds":["e1","e2","e8"]},{"criterion":"durability","grade":3,"rationale":"Existing statutory protection, installed infrastructure and approved recovery mechanisms support persistence. Regulatory dependence and incomplete franchise disclosures preclude exceptional durability.","evidenceIds":["e2","e6","e7","e8"]},{"criterion":"customer_dependency","grade":3,"rationale":"Consumers operates infrastructure serving nearly two million homes and businesses, while alternative generation supply is legally limited. Dependency is inferred from essential infrastructure and restricted supply choice, rather than measured customer switching costs.","evidenceIds":["e1","e2","e3"]},{"criterion":"erosion_resilience","grade":2,"rationale":"Realized gas rate increases and recovery mechanisms provide protection, but alternative supply is already at its cap, cash investment requirements are rising and consolidated operating income declined. These are mixed outcomes, not proof that the structural advantage has disappeared.","evidenceIds":["e3","e5","e7","e9","e10"]}]},{"category":"pricing_power","checks":[{"criterion":"realized_pricing","grade":3,"rationale":"The gas earnings bridge attributes $90 million of first-half 2026 improvement to rate increases, demonstrating realized regulated pricing recovery. The pending $232 million request is not counted as achieved pricing, and electric pricing coverage is incomplete.","evidenceIds":["e5","e18"]},{"criterion":"retention","grade":2,"rationale":"Gas deliveries of 181 Bcf versus 184 Bcf demonstrate substantial repeat demand, while alternative electric generation deliveries are at the statutory cap. This is indirect operating evidence of continuity with some competitive participation, not a measured retention rate.","evidenceIds":["e2","e3","e4","e16"]},{"criterion":"margin_resilience","grade":2,"rationale":"Gas rate increases more than offset several disclosed cost pressures and supported modest earnings growth. Nevertheless, consolidated operating income fell from $811 million to $754 million in the first half of 2026. Recovery mechanisms help, but resilience is mixed across the group.","evidenceIds":["e5","e7","e10"]},{"criterion":"contractual_freedom","grade":1,"rationale":"Material terms depend on regulatory approval. The regulator previously applied sale gains instead of additional rate relief, and a substantial gas rate request remained pending. Pricing protection therefore comes with limited unilateral freedom.","evidenceIds":["e17","e18","e25"]}]},{"category":"strong_management","checks":[{"criterion":"capital_discipline","grade":2,"rationale":"Consumers generated $1.240 billion of first-half operating cash against $1.804 billion of capital expenditures, supported by debt and parent contributions. CMS issued approximately 6.5 million shares for $495 million. The renewable exit may refocus capital, but proceeds and possible impairment remain unresolved; disciplined value creation is not yet established.","evidenceIds":["e9","e13","e14","e15"]},{"criterion":"incentive_alignment","grade":3,"rationale":"Actual 2025 grants were 75 percent performance-based, with three-year relative TSR and EPS-growth conditions. Existing payout caps, equity settlement, ownership guidelines and hedging restrictions support alignment. Future vesting and ownership compliance are not demonstrated, and EPS incentives do not directly establish returns on capital.","evidenceIds":["e19","e20","e21"]},{"criterion":"execution","grade":2,"rationale":"Reported solar commissioning and reliability work, together with GAAP continuing-operations EPS growth from 2023 through 2025, support execution. First-half 2026 earnings weakened, and the renewable divestiture remains incomplete. Assessment uses reported operating achievements and financial outcomes rather than management’s broad performance claims.","evidenceIds":["e1","e10","e13","e24"]},{"criterion":"governance","grade":3,"rationale":"Disclosed existing arrangements include 91 percent independent directors, fully independent key committees, annual elections and a separate independent chair. Four independent-director executive sessions in 2025 demonstrate operation of an oversight process. These support strong governance structures without proving exceptional effectiveness or adoption of proposed shareholder-rights changes.","evidenceIds":["e22","e23"]}]}],"qualityPolicy":"quality-scores-2","basisHash":"e71b9c7869fe5d6c9a792059a5b767843de97cf643a6f018a3bc0221ceac8e0b","updatedAt":"2026-10-18T00:40:02.247Z","sources":[{"id":"filing-1","url":"https://www.sec.gov/Archives/edgar/data/201533/000081115626000004/cms-20251231.htm","publishedAt":"2026-02-10","sha256":"23db903ce7f302f4a8a82fedfd418a9abfb907cdd2665974745d6ba3f996fffc","dateKind":"filed"},{"id":"filing-2","url":"https://www.sec.gov/Archives/edgar/data/201533/000081115626000028/cms-20260630.htm","publishedAt":"2026-07-28","sha256":"195bb67f28ed1231c009180d5e45051aac2c3f4da592c593f1880749622cde04","dateKind":"filed"},{"id":"filing-3","url":"https://www.sec.gov/Archives/edgar/data/811156/000081115626000015/cms-20260326.htm","publishedAt":"2026-03-26","sha256":"5710cfc2705811a808f3c5ad520651ade5532a1703773fda82e1d874086e32fe","dateKind":"filed"}],"model":"gpt-6.1-sol","providerId":"codex:5ad90a39fd27be09ed3c99221ce8cea676e3754801f579d150fc6dfd6fa36598","usage":{"input_tokens":53605,"cached_input_tokens":20992,"cache_write_input_tokens":0,"output_tokens":3441,"reasoning_output_tokens":168},"basisSupplement":{"previousHash":"6deac6d116c0a414353dd8b8b66a5a9f4f3ba346151a22f8bb582a06b4058a0c","checkedAt":"2026-10-18T16:49:32.080Z","rule":"dated historical and missing inputs only; accepted observations and research date retained"}},"signals":[{"period":"2021","end":"2021-12-31","values":{"gross_margin":null,"operating_margin":16.197879858657245,"roic":5.045369671322367,"fcf_margin":-3.6325088339222615,"sbc_revenue":null},"issues":{"pfcf":"Trailing free cash flow is zero or negative, so this ratio is undefined.","pfcf_growth":"Prior-year TTM FCF per diluted share is zero or negative; a growth-adjusted multiple is undefined.","sbc":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","software_capex":"Separately disclosed software and intangible investment is unavailable in the extracted statements for this period.","sbc_fcf":"Free cash flow before SBC deduction is zero or negative, so this ratio is undefined.","sbc_ocf":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","sbc_revenue":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roiic":"Invested capital did not increase versus the prior year. ROIIC requires a positive increase.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_fcf":"Trailing free cash flow is zero or negative, so this ratio is undefined.","buybacks":"The reported inputs required for this metric are unavailable in the extracted statements for this period."}},{"period":"2022","end":"2022-12-31","values":{"gross_margin":null,"operating_margin":14.711538461538462,"roic":5.381638528648365,"fcf_margin":-18.257211538461537,"sbc_revenue":null},"issues":{"peg":"TTM earnings per diluted share growth is zero or negative; a growth-adjusted multiple requires positive growth.","pfcf":"Trailing free cash flow is zero or negative, so this ratio is undefined.","pfcf_growth":"Prior-year TTM FCF per diluted share is zero or negative; a growth-adjusted multiple is undefined.","sbc":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","software_capex":"Separately disclosed software and intangible investment is 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for this period.","gross_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","fcf_margin":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","capex_intensity":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","sbc_revenue":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","roic_wacc":"Enter a WACC assumption from 0 to 100%.","debt_fcf":"The reported inputs required for this metric are unavailable in the extracted statements for this period.","buybacks":"The reported inputs required for this metric are unavailable in the extracted statements for this period."}},{"period":"2024","end":"2024-12-31","values":{"gross_margin":null,"operating_margin":20.314207650273225,"roic":5.18033877958623,"fcf_margin":null,"sbc_revenue":null},"issues":{"pfcf":"The reported 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