CMS Energy's 2026 Guidance: Growth Driven by Utility Load and Infrastructure Expansion

CenterPoint Energy (CNP) long-term growth outlook (2026–2035)

Based on management’s stated guidance in the provided 2026 Q1 earnings materials, CenterPoint Energy’s long-term growth outlook is centered on sustained per-share earnings compounding supported by utility load growth and related transmission/distribution investment, rather than on any single near-term catalyst.

1) Core long-term earnings growth target (2026–2035)

• CenterPoint expects to grow non-GAAP EPS at the mid- to high end of its 7% to 9% annual guidance range through 2028, and then 7% to 9% annually thereafter through 2035. ¹²

Interpretation: This implies a relatively steady long-run compounding rate for the next decade, with the same broad range (7%–9%) applying through 2035, only with the “mid- to high end” emphasis extending through 2028. ¹²

2) What management cites as the growth engine behind that outlook

Houston Electric load growth and “firmly committed” industrial load

• Management highlighted an accelerated Houston Electric demand outlook, including a forecast for a 50% increase in peak demand by a full 2 years, and cited conviction grounded in 7.5 GW of firmly committed load expected energized by 2029 (including 2.5 GW already under construction as of the prior update). ¹
• The outlook improved further: CenterPoint reported clear line of sight to 12.2 GW of firmly committed load, with ERCOT approval for 3.2 GW; 2.5 GW was approved since the last earnings call and CenterPoint expected to submit the remaining 9 GW of projects to ERCOT for approval shortly. ¹
• CenterPoint also stated that this firmly committed load is highly diversified, spanning more than a dozen customers across nearly 20 projects, and that 90% of the demand represents 0.5 GW or less per project. ¹

Transmission/distribution expansion to sustain growth

• Management expects the growth to continue and therefore believes it requires further expansion of the system beyond the near term, referencing a load study intended to complete later in 2026 to inform transmission planning. ³
• CenterPoint discussed that its transmission planning (including a $65 billion base plan) includes capacity-related investments to address the period where existing capacity is expected to be exhausted around ’29–’31, before new import capacity provides incremental relief. ⁴

Economics/affordability as an enabling factor

• Management linked the load and capacity buildout to affordability benefits, stating they can use 10 GW of existing system capacity to generate about $4 billion in aggregate savings for Texas residential and commercial customers over the next 10 years, and described local charges as 11% below the national average and the lowest in ERCOT. ⁵
• Management also reiterated that economic development is the “single biggest lever for affordability of utility service,” and that system investments have historically been used to support growth while keeping rates relatively constant (noting rates held “relatively constant since 2014”). ⁶

3) How incremental load is expected to translate into earnings support

CenterPoint’s discussion suggests that large/industrial load growth contributes to earnings both directly and indirectly:

• For ERCOT operations, management stated incremental modifications to connect customers are paid for by the large load customer, and therefore shouldn’t be viewed as a direct impact to the company’s overall CapEx plan. ⁷
• Management also quantified a direct earnings tailwind: ~$6 million per month of incremental demand charges for each 1 GW of industrial load added. ⁷

Implication for 2026–2035 outlook: These mechanics help explain why CenterPoint can model mid-to-high single digit EPS growth over a long horizon—incremental demand from committed load can raise earnings power, while system buildout required to replace/exapnd capacity is incorporated into planning rather than treated as a wholly new financial burden. ¹⁷⁴

4) Concrete timing markers that align with the 2026–2035 window

While not a full forecast year-by-year, management provided useful milestones showing growth is expected to be executed across the decade:

• CenterPoint indicated it is positioned to energize approximately 8 GW by 2029, described as 80% of a 10 GW increase originally forecast for energization by the end of 2031. ⁵
• For system-scale “import capacity,” management referenced 765 kV projects that are expected to come online in ’31 and ’32 (supporting the broader late-decade capacity need after the earlier “gap” around ’29–’31). ⁴
• Management also referenced large load customer projects and transmission work being identified/updated with more specificity in the second half of 2026 (e.g., incremental projects needed to support future growth). ⁸⁴

5) Bottom line: what the 2026–2035 outlook implies

From the provided excerpts, CenterPoint’s long-term growth outlook from 2026 to 2035 can be summarized as:

• Earnings growth: management targets 7%–9% non-GAAP EPS growth annually, with a mid- to high-end outcome through 2028 and 7%–9% annually thereafter through 2035. ¹²
• Demand growth support: this is underpinned by accelerated and diversified Houston Electric industrial load, with 12.2 GW of firmly committed load and ERCOT approvals already for 3.2 GW, plus additional submissions expected. ¹
• Capacity/infrastructure enablement: CenterPoint believes growth requires sustained transmission/distribution expansion, especially to bridge the late-decade capacity gap before major import capacity additions (e.g., 765 kV) come online. ³⁴
• Earnings translation mechanics: incremental industrial load is expected to create earnings tailwinds via incremental demand charges (management cited ~$6 million/month per 1 GW added) while interconnection modification costs are borne by customers in the ERCOT context. ⁷

Overall, the outlook is not framed as a speculative growth scenario; it is framed as a guidance-based earnings compounding plan tied to firmly committed load, ERCOT approvals, and execution of transmission planning and system investments through the end of the decade. ¹²⁴