By Amanda Durish Cook

CMS Energy last week pledged it would phase out all coal generation by 2040, days after releasing 2017 earnings that were hampered by one-time adjustments relating to recent federal tax cuts.

Michigan-based CMS, which owns Consumers Energy, said the move will cut its emissions by 80%. The company also said it plans to generate 40% of its electricity from renewables and storage by 2040. By then, the utility will also heavily rely on natural gas, hydropower and improved efficiency to meet demand.

Consumers currently relies on an energy mix of 34% natural gas, 24% coal, 11% pumped storage, 10% oil, 10% renewable sources, 8% nuclear and 3% market purchases.

The utility began moving away from coal in 2016 by closing seven of its 12 coal-fired generating plants, eliminating 38% of its carbon emissions when compared to the company’s 2008 levels. (See CMS Touts Generation Reliability, Palisades PPA Replacement.)

The utility currently operates five coal plants, including three units at the 1,450-MW J.H. Campbell generating station in Ottawa County and two units at the 511-MW Karn generating station near Bay City, Mich.

Consumers said it will release a detailed timeline on its plans to phase out the remaining coal units and reach renewable goals in June when it files its integrated resource plan with the Michigan Public Service Commission. The commission requires regulated utilities to file an IRP once every five years, detailing how they will meet customer demand.

“Consumers Energy is embracing a cleaner, leaner vision focused primarily on reducing energy usage and adding additional renewable energy sources, such as wind and solar,” the company said in Feb. 19 statement announcing its plan.

CMS CEO Patti Poppe told the Associated Press that the company believes that climate change is real and it wants to be on the right side of history.

The company also announced new five-year environmental goals for its Michigan locations, including saving 1 billion gallons of water, reducing waste sent to landfills by 35% and restoring or protecting 5,000 acres of Michigan land.

“We’re proud and uniquely qualified to provide the strong leadership needed to protect our planet and our home state for decades to come,” Poppe said.

Consumers supplies power to 6.7 million Michigan residents, two-thirds of the state’s population.

2017 Earnings

CMS earlier this month announced 2017 net income of $460 million ($1.64/share), reflecting a charge associated with federal tax reform, compared to the $551 million ($1.98/share) reported for 2016. Last year’s figure reflected a one-time charge related to the federal tax cut passed in December. Without that charge, CMS would have earned $610 million ($2.17/share), at the high end of the company’s prediction.

Poppe said the tax cut will overall have a long-term positive impact on CMS’ business model, lowering customer rates and providing “headroom for necessary capital investments.” She also noted that CMS managed a 7% annual growth rate last year despite “atypical weather and [a] record level of storms.” The company predicts it will see a 6 to 8% annual growth rate throughout 2018.