AGA Day 1 Recap

Research evidence excerpt

AGA Day 1 Recap

Natural Gas LDCs Equity ResearchRegulated Electric Utilities

is PPL earnings sharing mechanism in the state which would allow for the company to stay out of rate

cases until 2028. Notably none of the other requests for rehearing were accepted by the PSC. The

company continues to see economic development progressing in the state with load growth possibly

necessitating a filing for a CPCN for more CCGT generation in the state. The company recently

revealed a partnership with Rye to explore a possible 266MW 8 hr. pumped hydro energy storage

project in KY that would cost $1.3B but could be eligible for 50% ITC. The price tag seems steep, but

the useful life of the project would have a 100-year life vs battery storage projects with 20 year lives

and significant degradation.

CMS Energy Corporation (CMS)

We met with Garrick Rochow, President & Chief Executive Officer, Rejji Hayes, EVP & Chief

Financial Officer, and Tonya Berry, SVP of Engineering. Discussions focused on data centers, the MI

political and regulatory backdrop, rate case timing, guidance, and credit ratings. No commentary

was given on Northstar media reports (see HERE), per company policy not to comment on M&A.

Key emphasis was on CMS’s ability to deliver on guidance without data centers, and quality of earnings

which rebase off actuals, key themes we’ve heard before. That said, mgmt. expressed confidence in

their expectation that Gaines Township zoning for Microsoft’s data center would move forward,

and hedged that confidence with added context that there are backup sites being explored in

parallel for this and other data center projects. Mgmt. has been working on myth-busting and comms

strategy as it relates to data centers, focusing in on simple explanations of the customer benefits so