CMS Energy Corporation CMS recently revealed that its primary subsidiary, Consumer Energy, has introduced a plan to upgrade its natural gas system, which provides gas to more than 1.8 million homes and businesses in Michigan.

Details of CMS’ Plan

Per the plan, the company will replace up to 10,000 old gas lines and add valves that can be operated remotely to handle emergencies faster. These improvements will make the system safer, more reliable and better for the environment while keeping it affordable for customers.

Rate Hike – A Dire Need

The existing natural gas supply system and infrastructure are getting old and the company needs to invest regularly to upgrade and replace its existing systems to enhance safety and reliability. The natural gas rate hike at regular intervals will help CMS to continue with infrastructure development and ensure uninterrupted services to its customers.

To support its latest modernization efforts, CMS Energy has filed a $248 million natural gas rate request with the Michigan Public Service Commission, aiming to secure the necessary resources for long-term infrastructure development.

Investments in Natural Gas Infrastructure

The U.S. natural gas infrastructure is getting old and requires immediate replacement. A substantial investment is the need of the hour to improve the natural gas infrastructure. Many companies in the oil and gas industry are investing in upgrading infrastructure to ensure safe and efficient operations. They recoup the same through rate hike filling to continue making upgrades to the infrastructure.

The demand for natural gas, a cleaner burning fuel, is likely to continue to grow in the United States, driven by the growth of natural gas-fired power plants and the rising exports of LNG. Some other companies that have also been investing in U.S. natural gas infrastructure are discussed below.

Kinder Morgan, Inc. KMI is expanding its natural gas pipeline network. The company has recently acquired NextEra Energy Partners’ natural gas pipelines in South Texas for $1.82 billion.

KMI’s long-term (three to five years) earnings growth rate is 5.9%. The Zacks Consensus Estimate for KMI’s 2024 earnings per share indicates year-over-year growth of 9.4%.

The Williams Companies, Inc. WMB has consistently expanded its capacity, with a remarkable 50% increase over the past eight years. The company's deepwater portfolio includes a 3,500-mile-long natural gas and oil gathering and transmission pipeline.

WMB’s long-term earnings growth rate is 5.1%. The consensus estimate for WMB’s 2025 earnings per share indicates year-over-year growth of 10.6%.

Enbridge Inc. ENB is making strategic investments in the gas utilities sector to enhance its financial performance. Its recent acquisitions include Questar Gas and Enbridge Gas Ohio.

ENB’s long-term earnings growth rate is 5%. The Zacks Consensus Estimate for ENB’s 2025 earnings per share indicates year-over-year growth of 7.3%.

CMS Stock Price Performance

Shares of CMS have gained 10.4% in the past six months compared with the industry’s 5.3% growth.

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CMS’ Zacks Rank

CMS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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