---
title: "Six banks cut CMS Energy before Michigan cut its gas increase by $101 million"
description: "Michigan gave Consumers Energy $139.2 million of the $240 million gas increase it sought, at a 9.8 percent return on equity. Six banks had already marked down the stock; the first company outlook since its renewables exit lands on October 27."
publisher: "The Inference"
section: "Power"
published: 2026-10-16T18:28:47.196Z
modified: 2026-10-16T18:28:47.196Z
canonical: https://theinference.org/article/six-banks-cut-cms-energy-before-michigan-cut-its-gas-increase-by-101-million
language: en
keywords: "Utilities, Regulation, Natural Gas, Rate Cases, CMS Energy, Michigan"
---

# Six banks cut CMS Energy before Michigan cut its gas increase by $101 million

> Michigan gave Consumers Energy $139.2 million of the $240 million gas increase it sought, at a 9.8 percent return on equity. Six banks had already marked down the stock; the first company outlook since its renewables exit lands on October 27.

## Michigan granted 58 cents on the dollar

On October 15, 2026, the [Michigan Public Service Commission](https://www.michigan.gov/mpsc), the state's utility regulator, [approved a $139.2 million annual gas increase](https://www.msn.com/en-us/money/economy/consumers-energy-approved-for-139-2-million-natural-gas-rate-increase/ar-AA2ejW3Z) for Consumers Energy, the utility inside [CMS Energy](https://theinference.org/markets/companies/cms-energy) (NYSE: CMS) that serves 1.8 million natural gas customers across the state [1][4].

Consumers asked for $240 million when it [filed case U-21981 on December 16, 2025](https://hoodline.com/2026/10/consumers-energy-seeks-240m-gas-rate-increase-in-michigan/) [2] and still supported $231.5 million in October, at a 10.25 percent return on equity, the profit rate a utility may earn, applied to a $12.364 billion rate base [3]. The commission granted 58 percent of the ask, set the return at 9.8 percent [4], and left the typical household paying $3.92 more a month from November 1 [5].

## The banks ruled first

Six banks marked the stock down before the commissioners spoke. From August 18 to October 14, JPMorgan went to $76 from $85, BMO to $73 from $82, [Jefferies](https://theinference.org/markets/companies/jefferies) to $71 from $78, Scotiabank to $78 from $87, [Truist](https://theinference.org/markets/companies/truist-financial) to $77 from $81 and [Morgan Stanley](https://theinference.org/markets/companies/morgan-stanley) to $77 from $80 [6][7][8]. BMO alone said why, [tying its October 5 cut to the rate case outlook](https://www.investing.com/news/analyst-ratings/bmo-cuts-cms-energy-stock-price-target-on-rate-case-outlook-93CH-4934862) [9].

The shares traded at $67.11 on October 15, near the 52-week low of $62.28 [8]. They are down 11.1 percent over the past year while the S&P 500 gained 19.2 percent, and the average analyst target still sits near $77 [10].

*Chart: **Six banks cut CMS Energy targets by $3 to $9 before Michigan ruled** Bank price targets on CMS Energy, peak versus mid-October, all lower*

*Peak and current price targets per bank, August 18 to October 14, 2026, from dated analyst notes; cuts range from $3 (Morgan Stanley) to $9 (Scotiabank, JPMorgan, BMO). CMS traded at $67.11 on October 15, 2026, below every target shown. [6][7][8]*

## Michigan kept the return and cut the spending

The 9.8 percent return is no penalty: the consultant for the Citizens Utility Board of Michigan, a consumer group, notes it matches the last several DTE and Consumers gas orders [1], and it equals [the 9.80 percent Duke Energy's Carolinas utilities agreed to in settlements awaiting final orders](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/10/decisions-could-be-issued-on-2b-of-utility-rate-change-requests-in-october) [3].

*Chart: **The 9.8 percent return matches recent orders, not a penalty** Bar chart of return on equity positions in case U-21981, from the 8.8 percent the consumer board's consultant justified to the 10.25 percent Consumers supported, with the 9.8 percent granted highlighted*

*Return on equity in case U-21981, in percent: Consumers supported 10.25 in October, the commission set 9.8 on October 15, Duke Energy's Carolinas utilities agreed to 9.80 in settlements awaiting final orders, Attorney General Dana Nessel asked 9.20, and the Citizens Utility Board's consultant put the justified figure at 8.8. [1][2][3][4]*

The roughly $101 million came out of spending instead. Commissioners disallowed $7.9 million for pipeline integrity work over a "pattern of over-projecting of costs and under-spending," and trimmed the main pipe-replacement program to $207 million from $234.2 million [1][5].

Attorney General Dana Nessel, who pushed for a 9.20 percent return and a 3.5 percent cap on increases, [counts nearly $800 million of Consumers increases since 2020](https://www.clickondetroit.com/news/local/2026/10/16/state-regulators-approve-nearly-dollar140m-rate-hike-for-consumers-energy-natural-gas-customers/) [2][4]; the board says an 8.8 percent return would have saved customers another $50 million a year [1].

## October 27 decides what the markdowns meant

CMS [reports third-quarter results with a business and financial outlook on October 27](https://www.stocktitan.net/news/CMS/cms-energy-to-announce-2026-third-quarter-results-on-october-5sgj4acyyrlc.html) [11], its first full plan since July 28, when it exited non-utility renewables development at its NorthStar Clean Energy arm and guided 2027 earnings to $4.08 to $4.17 a share, below Wall Street's estimates at the time [10][12]. Analysts now expect $1.16 for the quarter and $4.16 for 2027 [10].

## The next case is electric

A $456 million electric increase filed in June waits behind this order [2][12], and the commission is already pricing data-center load: on October 1 it [approved contracts letting DTE Electric](https://www.michigan.gov/mpsc), Michigan's other big utility, serve a Google data center, and said the deal protects other customers from the project's costs [13].

The number to watch is the 2027 midpoint: $4.13 guided against $4.16 expected. BMO tied its markdown to the rate case; if the other five were pricing the same gap, October 27 is when it gets filled or widened.

## Takeaway

Michigan granted $139.2 million of Consumers Energy's $240 million gas increase at a 9.8 percent return, taking the difference out of spending plans rather than profit; six banks had cut their CMS Energy targets by $3 to $9 before the order, and the October 27 outlook, the first since the renewables exit, tests their call.

## Sources

1. [The Detroit News via MSN (Candice Williams), "Consumers Energy approved for $139.2 million natural gas rate increase", 15 October 2026](https://www.msn.com/en-us/money/economy/consumers-energy-approved-for-139-2-million-natural-gas-rate-increase/ar-AA2ejW3Z)
2. [Hoodline (Sarah Johnson), "Consumers Energy Seeks $240M Gas Rate Increase in Michigan", 16 October 2026](https://hoodline.com/2026/10/consumers-energy-seeks-240m-gas-rate-increase-in-michigan/)
3. [S&P Global Market Intelligence, Regulatory Research Associates, "Decisions could be issued on $2B of utility rate change requests in October", 10 October 2026](https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/10/decisions-could-be-issued-on-2b-of-utility-rate-change-requests-in-october)
4. [ClickOnDetroit / WDIV (Jenny Sherman), "State regulators approve nearly $140M rate hike for Consumers Energy natural gas customers", 16 October 2026](https://www.clickondetroit.com/news/local/2026/10/16/state-regulators-approve-nearly-dollar140m-rate-hike-for-consumers-energy-natural-gas-customers/)
5. [WZZM-TV via MSN (Isaac Hamlet), "Michigan approves 4.3% natural gas rate hike for Consumers Energy customers amid AG criticism", 15 October 2026](https://www.msn.com/en-us/money/general/michigan-approves-4-3-natural-gas-rate-hike-for-consumers-energy-customers-amid-ag-criticism/ar-AA2ekl7H)
6. [MT Newswires via MarketScreener, "Jefferies Adjusts Price Target on CMS Energy to $71 From $74", 8 October 2026](https://www.marketscreener.com/news/jefferies-adjusts-price-target-on-cms-energy-to-71-from-74-ce785ddfda89f22d)
7. [MT Newswires via MarketScreener, "JPMorgan Adjusts CMS Energy Price Target to $76 From $81", 13 October 2026](https://www.marketscreener.com/news/jpmorgan-adjusts-cms-energy-price-target-to-76-from-81-ce785dddde80f225)
8. [ad-hoc-news.de, citing Markets Insider and MarketBeat, "Truist lowers target for CMS Energy stock to USD 77.00", 16 October 2026](https://www.ad-hoc-news.de/boerse/news/nebenwerte/truist-lowers-target-for-cms-energy-stock-to-usd-77-00/70332206)
9. [Investing.com, "BMO cuts CMS Energy stock price target on rate case outlook", 6 October 2026](https://www.investing.com/news/analyst-ratings/bmo-cuts-cms-energy-stock-price-target-on-rate-case-outlook-93CH-4934862)
10. [Barchart via Yahoo Finance (Sohini Mondal), "Here's What to Expect From CMS Energy's Next Earnings Report", 13 October 2026](https://finance.yahoo.com/markets/stocks/articles/heres-expect-cms-energys-next-120036052.html)
11. [StockTitan / PRNewswire, "CMS Energy to Announce 2026 Third Quarter Results on October 27", 6 October 2026](https://www.stocktitan.net/news/CMS/cms-energy-to-announce-2026-third-quarter-results-on-october-5sgj4acyyrlc.html)
12. [CMS Energy Q2 2026 earnings call transcript via Yahoo Finance, 28 July 2026](https://finance.yahoo.com/quote/CMS/earnings/CMS-Q2-2026-earnings_call-656094.html)
13. [Michigan Public Service Commission, news release listing, accessed 16 October 2026](https://www.michigan.gov/mpsc)


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Six banks cut CMS Energy before Michigan cut its gas increase by $101 million — The Inference. Canonical: https://theinference.org/article/six-banks-cut-cms-energy-before-michigan-cut-its-gas-increase-by-101-million