Consumers Energy, a subsidiary of
CMS Energy Corporation
), intends to build a 700 megawatt ("MW") new natural gas-fired
power plant in Genesee County. The estimated cost of the project
is $750 million.
Located, in Thetford Township, about 20 miles northeast of Flint,
post completion, the major new natural gas-fired power plant
would be able to serve a community of about 445,000 people.
The company expects to begin the construction in 2015 and come
online by 2017. The project will likely create 600 construction
jobs. Post construction, the proposed power plant is expected to
create 30 operating jobs.
Currently, Consumers Energy owns the 272-acre Thetford Township
site. The site is interconnected with high-volume natural gas
delivery and high-voltage power transmission lines. This would be
the tenth natural gas-fired power plant in township. It already
has nine smaller natural-gas fired combustion turbine units.
However, development of the plant entirely depends on an air
permit from the Michigan Department of Environmental Quality
("MDEQ"), a certificate of necessity from the Michigan Public
Service Commission ("MPSC") and appropriate financing. The
company has already filed for the air permit application with
MDEQ for two combined cycle units at the Thetford site - one for
the current unit and the other for the development of a second
unit later. It expects to file a certificate of necessity
application with the MPSC in 2013.
The investment of $750 million would be an addition to the
investment of $6.5 billion, which the company had previously
announced to invest in its utility operations through 2017.
The major new natural gas power plant will not only help the
company to add profits, but will also meet the energy needs of
Consumers Energy's customers over the next 20 years under the
Balanced Energy Initiative program. The company will use modern
technology to meet the demand of its 1.8 million electric
The company seems to be focusing on the well-being of its
customers. The company is making major investments for creating
jobs while boosting the state's economy. Apart from making
substantial investments to improve the environment, it is
continuously trying to aggressively manage its costs. Despite the
construction of a new power plant, it plans to hold the average
base rate increases at or below the rate of inflation for the
next five years. Overall, this would increase the market value of
Like CMS Energy, other electricity provider
) is also busy in making huge investments for the benefit of its
customers. Recently, Calpine completed the acquisition of an 800
megawatts natural gas-fired, combined-cycle power plant located
in Bosque County, Texas for $432 million plus adjustments, or
$540 per kilowatt.
Jackson, Michigan-based CMS Energy is the holding company of
Consumers Energy Company (Consumers) and CMS Enterprises Company
(Enterprises). Consumers Energy is a electric and gas utility
company that provides electricity and natural gas to Michigan's
residents, and serves customers in all 68 counties of Michigan's
Lower Peninsula. Enterprises, through its subsidiaries and equity
investments, is engaged primarily in independent power
CMS Energy presents a strong growth story, given its stable
electric and gas utility operations favorable regulatory policies
in Michigan, higher rates, and incremental dividend. However, we
remain concerned due to the unfavorable macro backdrop, lower
demand for electricity and pending regulatory cases. The company
presently retains a short-term Zacks #3 Rank (Hold) that
corresponds with our long-term Neutral recommendation on the
CMS ENERGY (CMS): Free Stock Analysis Report
CALPINE CORP (CPN): Free Stock Analysis
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