Consumers Energy - the principal subsidiary of
CMS Energy Corp.
) - has entered into an agreement with
General Electric Company
). Per the contract, GE will supply 62 turbine units for CMS
Energy's Cross Winds Energy Park. Each turbine unit has a
generation capacity of 1.7 megawatts (MW) which calls for an
installed generation capacity of 105.4 MW.
Construction of the Cross Winds Energy Park in Tuscola County is
expected to begin later this year and come on line late in 2014.
During its construction period, the project is expected to create
This project will help the company in meeting Michigan's 2008
energy law. Currently, this law calls for the company to generate
10% of the electricity from renewable sources by 2015. However,
the project is subject to approval from the Michigan Public
Service Commission and has yet to receive a special use permit
from Columbia and Akron townships in Tuscola County.
Also, the company requires to enter into an interconnect
agreement with the Mid-continent Independent System Operator,
Inc. and International Transmission Company, a subsidiary of
ITC Holdings Corp.
Wind generation is a vital part of Consumers Energy's Balanced
Energy Initiative. This 20-year plan targets to meet the needs of
its 1.8 million electric customers with energy efficiency, demand
management, expanded use of renewable energy, and development of
new power plants.
The extension of tax credits for wind projects for which
construction begins prior to Dec 31, 2013 will curtail the cost
of meeting the renewable requirements of the 2008 Energy Law.
CMS Energy plans to spend approximately $6.5 billion to $7.0
billion in the next five years (2013 - 2017) on upgrading its
distribution system and generation assets through projects such
as advanced metering infrastructure and renewable investments.
With its robust pipeline of regulated investment opportunities
and favorable regulatory treatment, the company remains on track
to achieve its long-term EPS growth target of 5% to 7% and annual
rate base growth of 6% to 7%.
In order to meet its renewable capacity requirements, the company
expects to add more than 500 MW of owned or contracted renewable
capacity. Through Mar 2013, the company had contracted the
purchase of 299 MW of renewable energy and owned 100 MW of
capacity at its recently constructed Lake Winds Energy Park.
However, we remain concerned about the present unfavorable macro
backdrop, lower demand for electricity, the dismal economy in
Michigan and pending regulatory cases. The company presently
retains a short-term Zacks Rank #3 (Hold).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #1 (Strong Buy) peer
Companhia Paranaense de Energia
CMS ENERGY (CMS): Free Stock Analysis Report
COPEL-ADR PR B (ELP): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
ITC HOLDINGS CP (ITC): Free Stock Analysis
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