Cms Energy Corporation · NYSE:CMS
Cms Energy — Deutsche Bank 2009 Energy, Utilities and Power Conference
28 slides from Cms Energy's conference presentation, May 27, 2009
Slide 1: Growing Forward
Growing Forward Deutsche Bank 2009 Energy, Utilities and Power Conference May 27, 2009 Tom J. Webb Executive Vice President and Chief Financial Officer
Slide 2: Forward-looking statements
This presentation contains "forward-looking statements" as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. They should be
Slide 3: Long-term Objectives
Consistent financial performance Fair and timely regulation Utility investment Customer value Safe, excellent operations 2 Long-term Objectives
Slide 4: Consumers Energy Overview
Consumers Energy Overview Excellent operations Customer value Investment Responsible rate increases Healthy capital structure Fair and timely regulation Consistent strong financial performance Ludington Pumped Storage B C Cobb J H Campbell D E Karn J C Weadock J R Whiting Mio Alcona Cooke Foote Loud
Slide 5: Regulatory Update
Regulatory Update Renewable Energy Plan Capital investment over $1 billion Annual surcharge $85-$90 million Order expected in May Energy Optimization Plan Investment $.5 billion Annual surcharge $90 million Order expected in May Gas Rate Case Filing expected in May Electric Rate Case Filed November
Slide 6: Regulatory Timeline
Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb- 09 Mar-09 Regulatory Timeline November December April May June September November Electric Rate Case U-15645 Filed Staff and intervenors file Rebuttals Self implemented Cross examinat
Slide 7: Sales and Unemployment
Sales and Unemployment Electric Sales (weather adjusted) Sales decline still similar to recession in early 1980s; unemployment varies across the state. Michigan Unemployment 2009 1975 1986 1997 2008 (7)% Decline over three years ('79 -'82 recession) 2008 2009 (3)% 1975 1976 1977 1978 1979 1980 1981
Slide 8: Full Year Forecast Industrial Sales by Quarter
Full Year Forecast Industrial Sales by Quarter Prior Present Fourth 2008 -2 2009 Budget -3 -5 2009 Forecast First Quarter sales were equal to budget. Forecast industrial sales, however, revised downward. 2008 2009 Budget 2009 Forecast -2 First -11 0 -3 Second -10 -5 0 -5 Third -6 -5 0 -6 Fourth -5 F
Slide 9: Uncollectible Accounts
Uncollectible Accounts An "auto-wide" bankruptcy would have an incremental "one time write off" impact. Utility Uncollectible Accounts Millions $ 2007 2008 2009 Bankruptcies 2.6 4.1 5 2009 Budget 29.4 41.9 43 2009 Forecast 0 0 10 Pct of Revenue 0.5% 0.7% 0.9% "Auto-wide" Bankruptcy Exposure "SAP" GM
Slide 10: Diversified Customer Base
Diversified Customer Base Hemlock Semiconductor General Motors Delphi Corporation Pfizer Incorporated Meijer Incorporated State of Michigan Quanex Corporation Packaging Corporation of America Dow Corning Corporation Denso International Percent of 2008 total Company 3% Top Ten Customers 2008 Gross Ma
Slide 11: Balanced Energy Plan Summary
Balanced Energy Plan Summary Extensive analysis of alternatives and risks Diverse and balanced plan Meets 10% renewable portfolio standard by 2015 Meets energy efficiency target of 5.5% by 2015 Includes demand management programs Purchase of Zeeland natural gas plant Build new clean coal facility Re
Slide 12: Utility Growth Rate Base
2008 2009 2010 2011 2012 2031 Depreciation 7.851 8.729 8.486 7.922 7.592 7.123 6.597 Maintenance 0.574 1.132 1.644 2.117 2.616 Customer growth 0.077 0.156 0.244 0.337 0.431 Environmental 0.057 0.19 0.341 0.501 0.797 Zeeland plant 0.481 0.481 0.481 0.481 0.481 Gas compression and pipelines 0.064 0.14
Slide 13: What Makes CMS Different?
What Makes CMS Different? Recent State legislation provides framework for growth Diversified Utility investment opportunities boost rate base and EPS Solid liquidity position, no need to issue equity in near term NOL and AMT credits add value Track record of predictability
Slide 14: Appendix: Rate Base and Electric Revenue
Appendix RATE BASE (At December 31) ($ Millions)) 2008 2007 2006 2005 2004 —— —— —— —— —— — ELECTRIC REVENUE AND POWER COSTS (Millions) Residential $ 1,414 $ 1,326 $ 1,279 $ 1,069 $ 996 Commercial 1,129 1,111 1,062 878 814 Industrial 810 775 764 553 523 Other 32 30 29 26 27 Total revenue from ultima
Slide 15: Fuel Cost and Power Generated
Years Ended December 31 2008 2007 2006 2005 2004 —— —— —— —— —— — FUEL COST ($/MMBtu) Coal 2.01 2.04 2.09 1.78 1.43 Oil 11.54 8.21 8.68 5.98 4.68 Gas 10.94 10.29 8.92 9.76 10.07 Nuclear 0.00 0.42 0.24 0.34 0.33 Weighted average for all fuels 2.47 2.07 1.72 1.64 1.26 FUEL COST FOR GENERATION (%) Coal
Slide 16: Gas Revenue and Cost of Gas
2008 2007 2006 2005 2004 GAS REVENUE AND COST OF GAS ($ Millions) Residential $ 1,971 $ 1,823 $ 1,646 $ 1,742 $ 1,466 Commercial 598 552 498 510 420 Industrial 124 113 111 116 94 Other 5 6 4 9 2 Total sales revenue $ 2,698 $ 2,494 $ 2,259 $ 2,377 $ 1,982 Transportation fees 45 44 40 43 41 Miscellane
Slide 17: Projects in Operation
Gross Primary Percentage of Gross Capacity CMS Fuel In-Service Capacity Under Long- No. Project Name MW MW Type Location Date Term Contract —— —— —— —— —— —— —— — (%) Projects in Operation: * 1 Craven 50 25 Biomass N. Carolina 1990 0 * 2 DIG 710 710 Natural Gas Michigan 2001 92 * 3 Exeter 31 31 Tire
Slide 18: Electric Rate Case U-15645
ELECTRIC RATE CASE U-15645* On November 14, 2008, Consumers Energy filed an application with the Michigan Public Service Commission seeking an increase in its electric generation and distribution rates based on a 2009 test year. On April 27, 2009 the MPSC staff filed their position on Consumers Ener
Slide 19: Maturity Schedule of CMS and CECo Long-Term Debt
MATURITY SCHEDULE OF CMS AND CECO LONG-TERM DEBT & PREFERRED SECURITIES AS OF 04/30/2009 Maturity Amount F/V S/U or Call Date (000’s) DEBT/ CO —— —— —— —— — SHORT-TERM DEBT: F S 08/15/09 $ 150,000 4.4% Series K FMBs (CECo) — $ 150,000 LONG-TERM DEBT: F S 05/15/10 $ 250,000 4% $250MM FMBs (CECo) F S
Slide 20: Maturity Schedule of CMS and CECo Long-Term Debt
CMS ENERGY MATURITY SCHEDULE OF CMS AND CECO LONG-TERM DEBT & PREFERRED SECURITIES ‘AS OF 047072008 ev su etalove (os) ocsTCo ~ ome : oo: a Pot Set a { 1B PbS ae: ; 1 Se ; bg Ege ; 1g 1 iss PE $100 44% Sie KFC) = o00 { noco as ess Fusco) S00 35705 Fd PORE (Co) zr 23 poms CEC3) 01000 775% Uo Nn (CS)
Slide 21: Projected Consumers Capital Expenditures
Projected Consumers Capital Expenditures Appendix-7
Slide 22: 2009-2013 Capital Expenditures
2009 - 2013 Capital Expenditures Category Amount Value Add (bils) Maintenance $2.1 Maintain existing generating and distribution system Environmental 1.0 Reduce emissions and comply with regulations Customer growth 0.9 Meet customer requirements Clean coal plant 0.5 Meet customer demand AMI 0.6 Enab
Slide 23: Capital Spending
Capital Spending 2008 Budget Outlook Contingency Maintenance including customer growth 706 600 674 611.3 Environmental 45 69 197 197.1 Choices 75 181 264 125.1 120 186 Capital spending dialed back with some choices delayed temporarily. Average depreciation $410 million Equity contributions to Utilit
Slide 24: Renewable Energy Today
Renewable Energy Today 2008 Energy Generation Mix 40,100 Mwh Wind Hydro Biomass Solid waste Anaerobic digester Landfill gas Nuclear (PPA) Renewables Coal MISO Purchase Natural Gas 17 5 45 19 14 382 MW of renewable resources provide 5% of total energy. a _ _ _ _ _ a Based on generation needed to serv
Slide 25: Wind Growth (2008-2018)
Wind Growth - (2008-2018) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 71 71 71 71 71 271 271 571 571 971 971 Projected 200 MW 300 MW 400 MW Appendix-11
Slide 26: Tax Benefits
Tax Benefits New American Recovery and Reinvestment Act of 2009 bonus depreciation extends life of NOLs. Appendix-12 Year-End Actual Estimate 2008 2009 2010 (bils) (bils) (bils) Gross NOL carry forwards $ 1.3 $ 1.1 $ .5 Net NOL cash benefit at 35% .4 .4 $ .2 Credit carry forwards .3 .3 .3 Remaining
Slide 27: 2009 Sensitivities
2009 Sensitivities Annual Impact Sensitivity EPS FCF (mils) Sales Electric (34,416 GWh) a + 1% + $.04 + $18 Gas (290 bcf) + 1 + .02 + 7 Uncollectible accounts ($58 million) + $5 million + .02 + 5 Auto-sector-wide bankruptcy (15) - (30) (.04) - (.08) (15) - (30) Gas prices ($4.40/mcf) + .50 + .01 + 6
Slide 28: Liquidity Components
Liquidity Components At 04-30-09 Facility Available Renewal Date (mils) (mils) A/R program $ 250 $ 250 February 2010 Bank of Nova Scotia LOC 192 0 November 2009 Consumers revolvers UBOC 150 150 September 2009 JPMorgan 500 328 March 2012 Energy Parent revolver 550 487 April 2012 Subtotal $1,642 $1,21
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