Related Party Transactions - Consumers

12 Months Ended

Dec. 31, 2018

Related-Party Transactions—Consumers

Consumers enters into a number of transactions with related parties. These transactions include:


•	purchases of electricity from affiliates of CMS Enterprises


•	payments to and from CMS Energy related to parent company overhead costs


•	investment in CMS Energy common stock

Transactions involving power supply purchases from certain affiliates of CMS Enterprises are based on avoided costs under PURPA, state law, and competitive bidding. The payment of parent company overhead costs is based on the use of accepted industry allocation methodologies. These payments are for costs that occur in the normal course of business.

Presented in the following table is Consumers’ expense recorded from related-party transactions for the years ended December 31:



In Millions
Description	Related Party	2018			2017			2016
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	83		$	90		$	88

Amounts payable to related parties for purchased power and other services were $20 million at December 31, 2018 and $27 million at December 31, 2017. Accounts receivable from related parties were $13 million at December 31, 2018 and $2 million at December 31, 2017.

In July 2018, CMS Energy and Consumers sold the DB SERP debt securities and CMS Energy issued a $146 million demand note payable to the DB SERP rabbi trust. The portion of the demand note attributable to Consumers was recorded as a note receivable – related party on Consumers’ consolidated balance sheets at December 31, 2018. For additional details about the note receivable – related party, see Note 7, Financial Instruments and Note 8, Notes Receivable.

Consumers owned shares of CMS Energy common stock with a fair value of $1 million at December 31, 2018 and $21 million at December 31, 2017. For additional details on Consumers’ investment in CMS Energy common stock, see Note 7, Financial Instruments.

In January 2019, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $300 million. At December 31, 2018, there were no outstanding loans under the agreement.