Consumers Energy to upgrade 135 miles of natural gas pipelines

JACKSON, Mich. - Consumers Energy (CMS), a utility company currently valued at $21 billion with a FAIR financial health rating according to InvestingPro, announced Monday it is undertaking major construction projects to update 135 miles of natural gas infrastructure across 15 Michigan communities this summer.

The work will replace existing cast iron and steel pipelines, some over 100 years old, to ensure continued safe and reliable service to the utility’s 1.8 million natural gas customers. More than 600 employees and contractors are involved in the projects. This infrastructure investment aligns with the company’s strong dividend history, having maintained payments for 19 consecutive years with a current yield of 3.1%.

"These projects are a visible demonstration of Consumers Energy’s commitment to delivering natural gas safely, affordably and reliably to our friends and neighbors who count on us," said Holly Bowers, Consumers Energy’s vice president of natural gas engineering and supply, in a press release.

The construction spans several regions including Southeast Michigan (51 miles across five communities), Flint (18 miles across three areas), Saginaw/Bay City (25 miles), Kalamazoo (12 miles), Lansing (14 miles), and Midland (14 miles across three locations).

These upgrades are in addition to the company’s ongoing Four Cities Metro Pipeline replacement in Southeast Michigan and other local pipeline improvements throughout the state.

The work is part of Consumers Energy’s Natural Gas Delivery Plan, which aims to maintain system safety while keeping costs at less than $3 per day for typical households.

Drivers are advised to watch for crews working along roads, which will remain open with occasional lane closures during the construction period.

Consumers Energy is Michigan’s largest energy provider, serving 6.8 million residents across the state’s Lower Peninsula with natural gas and electricity services. The company has demonstrated stable performance with a low beta of 0.37 and revenue growth of 5.9% over the last twelve months. According to InvestingPro, which offers comprehensive analysis of 1,400+ US stocks, the company appears to be trading near its Fair Value, with analysts projecting continued profitability this year.

In other recent news, CMS Energy has announced the pricing terms for its cash tender offer to purchase up to $147.095 million of outstanding bonds from its subsidiary, Consumers Energy Company. The company will buy these bonds at a total consideration of $565.15 per $1,000 principal amount, including an early tender payment for those who met the deadline. Meanwhile, BMO Capital Markets raised its price target for CMS Energy to $79, maintaining an Outperform rating, following the company’s first-quarter earnings report, which showed an EPS of $1.02. This figure aligned with BMO Capital’s estimates and the consensus estimate, highlighting CMS Energy’s solid performance despite recent weather-related expenses.

Additionally, KeyBanc analysts reaffirmed their Overweight rating on CMS Energy stock, with a price target of $76. They cited potential growth from legislative changes in Michigan as a key factor. CMS Energy also reported the results of its annual shareholder meetings, where all board nominees were elected, and executive compensation was approved. Shareholders ratified PricewaterhouseCoopers LLP as the independent auditor for 2025 and supported a proposal to enhance the ability to call special shareholder meetings. These developments reflect continued shareholder support for the company’s governance and financial strategies.

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