10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

OR

☐  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number	Registrant; State of Incorporation; Address; and Telephone Number	IRS Employer Identification No.
1-9513	CMS ENERGY CORPORATION	38-2726431

(A Michigan Corporation)

One Energy Plaza, Jackson, Michigan 49201

(517) 788‑0550

1-5611 CONSUMERS ENERGY COMPANY 38-0442310

(A Michigan Corporation)

One Energy Plaza, Jackson, Michigan 49201

(517) 788‑0550

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
CMS Energy Corporation Common Stock, $0.01 par value	CMS	New York Stock Exchange
CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078	CMSA	New York Stock Exchange
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078	CMSC	New York Stock Exchange
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079	CMSD	New York Stock Exchange
CMS Energy Corporation Depositary Shares, each representing a 1/1,000th interest in a share of 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C	CMS PRC	New York Stock Exchange
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series	CMS-PB	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
CMS Energy Corporation:	Yes	☒	No	☐	Consumers Energy Company:	Yes	☒	No	☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
CMS Energy Corporation:	Yes	☐	No	☒	Consumers Energy Company:	Yes	☐	No	☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
CMS Energy Corporation:	Yes	☒	No	☐	Consumers Energy Company:	Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S‑T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
CMS Energy Corporation:	Yes	☒	No	☐	Consumers Energy Company:	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
CMS Energy Corporation:		Consumers Energy Company:
Large accelerated filer	☒	Large accelerated filer	☐
Non‑accelerated filer	☐	Non‑accelerated filer	☒
Accelerated filer	☐	Accelerated filer	☐
Smaller reporting company	☐	Smaller reporting company	☐
Emerging growth company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
CMS Energy Corporation:	☐	Consumers Energy Company:	☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
CMS Energy Corporation:	☒	Consumers Energy Company:	☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).
CMS Energy Corporation:	Yes	☐	No	☒	Consumers Energy Company:	Yes	☐	No	☒

The aggregate market value of CMS Energy voting and non‑voting common equity held by non‑affiliates was $17.113 billion for the 289,652,428 CMS Energy Corporation Common Stock shares outstanding on June 30, 2021 based on the closing sale price of $59.08 for CMS Energy Corporation Common Stock, as reported by the New York Stock Exchange on such date. There were no shares of Consumers common equity held by non‑affiliates as of June 30, 2021.

There were 289,760,265 shares of CMS Energy Corporation Common Stock outstanding on January 14, 2022. On January 14, 2022, CMS Energy held all 84,108,789 outstanding shares of common stock of Consumers.

Documents incorporated by reference in Part III: CMS Energy’s and Consumers’ proxy statement relating to their 2022 Annual Meetings of Shareholders to be held May 6, 2022.

CMS Energy Corporation

Consumers Energy Company

Annual Reports on Form 10-K to the Securities and Exchange Commission for the Year Ended December 31, 2021

Table of Contents

Glossary		2
Filing Format		11
Forward-Looking Statements and Information		11
Part I		15
Item 1.	Business	15
Item 1A.	Risk Factors	37
Item 1B.	Unresolved Staff Comments	47
Item 2.	Properties	48
Item 3.	Legal Proceedings	48
Item 4.	Mine Safety Disclosures	48
Part II		48
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	48
Item 6.	Reserved	50
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	51
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	86
Item 8.	Financial Statements and Supplementary Data	87
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	185
Item 9A.	Controls and Procedures	185
Item 9B.	Other Information	187
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	187
Part III		187
Item 10.	Directors, Executive Officers and Corporate Governance	187
Item 11.	Executive Compensation	188
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	189
Item 13.	Certain Relationships and Related Transactions, and Director Independence	189
Item 14.	Principal Accountant Fees and Services	189
Part IV		191
Item 15.	Exhibits and Financial Statement Schedules	191
Item 16.	Form 10-K Summary	204
Signatures		205

1

Glossary

Certain terms used in the text and financial statements are defined below.

2016 Energy Law

Michigan’s Public Acts 341 and 342 of 2016

ABATE

Association of Businesses Advocating Tariff Equity

ABO

Accumulated benefit obligation; the liabilities of a pension plan based on service and pay to date, which differs from the PBO in that it does not reflect expected future salary increases

AFUDC

Allowance for borrowed and equity funds used during construction

AOCI

Accumulated other comprehensive income (loss)

ARO

Asset retirement obligation

ASC 715

Financial Accounting Standards Board Accounting Standards Codification Topic 715, Retirement Benefits

Aviator Wind

Aviator Wind, LLC, a VIE in which Aviator Wind Equity Holdings holds a Class B membership interest

Aviator Wind Equity Holdings

Aviator Wind Equity Holdings, LLC, a VIE in which Grand River Wind, LLC, a wholly owned subsidiary of CMS Enterprises, has a 51‑percent interest

Bay Harbor

A residential/commercial real estate area located near Petoskey, Michigan, in which CMS Energy sold its interest in 2002

bcf

Billion cubic feet

CAO

Chief Accounting Officer

2

CCR

Coal combustion residual

CDC

U.S. Centers for Disease Control and Prevention

CEO

Chief Executive Officer

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended

CFO

Chief Financial Officer

city-gate contract

An arrangement made for the point at which a local distribution company physically receives gas from a supplier or pipeline

Clean Air Act

Federal Clean Air Act of 1963, as amended

Clean Energy Plan

Consumers’ long-term strategy for delivering clean, reliable, and affordable energy to its customers through the increased use of energy efficiency and customer demand management programs, additional renewable energy generation, and conservation voltage reduction

Clean Water Act

Federal Water Pollution Control Act of 1972, as amended

CMS Capital

CMS Capital, L.L.C., a wholly owned subsidiary of CMS Energy

CMS Energy

CMS Energy Corporation and its consolidated subsidiaries, unless otherwise noted; the parent of Consumers, CMS Enterprises, and, until October 1, 2021, EnerBank; on October 1, 2021, EnerBank was acquired by Regions Bank

CMS Enterprises

CMS Enterprises Company, a wholly owned subsidiary of CMS Energy

3

CMS ERM

CMS Energy Resource Management Company, a wholly owned subsidiary of CMS Enterprises, formerly known as CMS Marketing, Services and Trading Company

CMS Generation Michigan Power

CMS Generation Michigan Power L.L.C., a wholly owned subsidiary of HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises

CMS Land

CMS Land Company, a wholly owned subsidiary of CMS Capital

Consumers

Consumers Energy Company and its consolidated subsidiaries, unless otherwise noted; a wholly owned subsidiary of CMS Energy

Consumers 2014 Securitization Funding

Consumers 2014 Securitization Funding LLC, a wholly owned consolidated bankruptcy-remote subsidiary of Consumers and special-purpose entity organized for the sole purpose of purchasing and owning securitization property, issuing securitization bonds, and pledging its interest in securitization property to a trustee to collateralize the securitization bonds

COVID‑19

Coronavirus disease 2019, a respiratory illness that was declared a pandemic in March 2020 and to which public and private agencies initially responded by instituting social-distancing and other measures designed to slow the spread of the disease

Craven

Craven County Wood Energy Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

CSAPR

Cross-State Air Pollution Rule of 2011, as amended

DB Pension Plan A

Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries, created as of December 31, 2017 for active employees who were covered under the defined benefit pension plan that closed in 2005

DB Pension Plan B

Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries, amended as of December 31, 2017 to include only retired and former employees who were covered under the defined benefit pension plan that closed in 2005

4

DB Pension Plans

Defined benefit pension plans of CMS Energy and Consumers, comprising DB Pension Plan A and DB Pension Plan B

DB SERP

Defined Benefit Supplemental Executive Retirement Plan

DCCP

Defined Company Contribution Plan

DC SERP

Defined Contribution Supplemental Executive Retirement Plan

DIG

Dearborn Industrial Generation, L.L.C., a wholly owned subsidiary of Dearborn Industrial Energy, L.L.C., a wholly owned subsidiary of CMS Enterprises

Dodd-Frank Act

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

DTE Electric

DTE Electric Company, a non‑affiliated company

EGLE

Michigan Department of Environment, Great Lakes, and Energy, formerly known as Michigan Department of Environmental Quality

EnerBank

EnerBank USA, until October 1, 2021, a wholly owned subsidiary of CMS Capital; on October 1, 2021, EnerBank was acquired by Regions Bank

energy waste reduction

The reduction of energy consumption through energy efficiency and demand-side energy conservation, as established under the 2016 Energy Law

Entergy

Entergy Corporation, a non‑affiliated company

EPA

U.S. Environmental Protection Agency

EPS

Earnings per share

5

ERCOT

Electric Reliability Council of Texas

Exchange Act

Securities Exchange Act of 1934

FERC

Federal Energy Regulatory Commission

First Mortgage Bond Indenture

Indenture dated as of September 1, 1945 between Consumers and The Bank of New York Mellon, as Trustee, as amended and supplemented

FTR

Financial transmission right

GAAP

U.S. Generally Accepted Accounting Principles

GCC

Gas Customer Choice, which allows gas customers to purchase gas from alternative suppliers

GCR

Gas cost recovery

Genesee

Genesee Power Station Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

Grayling

Grayling Generating Station Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

GWh

Gigawatt-hour, a unit of energy equal to one billion watt-hours

Internal Revenue Code

Internal Revenue Code of 1986, as amended

IRP

Integrated resource plan

6

IRS

Internal Revenue Service

kV

Thousand volts, a unit used to measure the difference in electrical pressure along a current

kVA

Thousand volt-amperes, a unit used to reflect the electrical power capacity rating of equipment or a system

kWh

Kilowatt-hour, a unit of energy equal to one thousand watt-hours

LIBOR

London Interbank Offered Rate

Ludington

Ludington pumped-storage plant, jointly owned by Consumers and DTE Electric

MATS

Mercury and Air Toxics Standards, which limit mercury, acid gases, and other toxic pollution from coal‑fueled and oil‑fueled power plants

MCV Facility

A 1,647 MW natural gas-fueled, combined-cycle cogeneration facility operated by the MCV Partnership

MCV Partnership

Midland Cogeneration Venture Limited Partnership, a non-affiliated company

MCV PPA

PPA between Consumers and the MCV Partnership

METC

Michigan Electric Transmission Company, LLC, a non‑affiliated company

MGP

Manufactured gas plant

MIOSHA

Michigan Occupational Safety and Health Administration

7

MISO

Midcontinent Independent System Operator, Inc.

mothball

To place a generating unit into a state of extended reserve shutdown in which the unit is inactive and unavailable for service for a specified period, during which the unit can be brought back into service after receiving appropriate notification and completing any necessary maintenance or other work; generation owners in MISO must request approval to mothball a unit, and MISO then evaluates the request for reliability impacts

MPSC

Michigan Public Service Commission

MRV

Market-related value of plan assets

MW

Megawatt, a unit of power equal to one million watts

MWh

Megawatt-hour, a unit of energy equal to one million watt-hours

NAAQS

National Ambient Air Quality Standards

NERC

North American Electric Reliability Corporation, a non‑affiliated company responsible for developing and enforcing reliability standards, monitoring the bulk power system, and educating and certifying industry personnel

NPDES

National Pollutant Discharge Elimination System, a permit system for regulating point sources of pollution under the Clean Water Act

NREPA

Part 201 of Michigan’s Natural Resources and Environmental Protection Act of 1994, as amended

NSR

New Source Review, a construction-permitting program under the Clean Air Act

OPEB

Other Post-Employment Benefits

8

OPEB Plan

Postretirement health care and life insurance plans of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries

OSHA

Occupational Safety and Health Administration

Palisades

Palisades nuclear power plant, sold by Consumers to Entergy in 2007

PBO

Projected benefit obligation

PCB

Polychlorinated biphenyl

PFAS

Per- and polyfluoroalkyl substances

PHMSA

U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration

PISP

Performance Incentive Stock Plan

PJM

PJM Interconnection Inc.

PPA

Power purchase agreement

PSCR

Power supply cost recovery

PURPA

Public Utility Regulatory Policies Act of 1978

RCRA

Federal Resource Conservation and Recovery Act of 1976

REC

Renewable energy credit

9

Regions Bank

A subsidiary of Regions Financial Corporation, a non-affiliated company

ROA

Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to Michigan’s Public Acts 141 and 142 of 2000, as amended

SEC

U.S. Securities and Exchange Commission

securitization

A financing method authorized by statute and approved by the MPSC which allows a utility to sell its right to receive a portion of the rate payments received from its customers for the repayment of securitization bonds issued by a special-purpose entity affiliated with such utility

Series C preferred stock

4.200 percent cumulative redeemable perpetual preferred stock, Series C, with a liquidation value of $25,000 per share

TCJA

Tax Cuts and Jobs Act of 2017

T.E.S. Filer City

T.E.S. Filer City Station Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

USW

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC

UWUA

Utility Workers Union of America, AFL-CIO

VEBA trust

Voluntary employees’ beneficiary association trusts accounts established specifically to set aside employer-contributed assets to pay for future expenses of the OPEB Plan

VIE

Variable interest entity

10

Filing Format

This combined Form 10-K is separately filed by CMS Energy and Consumers. Information in this combined Form 10-K relating to each individual registrant is filed by such registrant on its own behalf. Consumers makes no representation regarding information relating to any other companies affiliated with CMS Energy other than its own subsidiaries.

CMS Energy is the parent holding company of several subsidiaries, including Consumers and CMS Enterprises. CMS Energy was also the parent holding company of EnerBank until October 1, 2021 when EnerBank was acquired by Regions Bank. None of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers) has any obligation in respect of Consumers’ debt securities or preferred stock and holders of such securities should not consider the financial resources or results of operations of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers and its own subsidiaries (in relevant circumstances)) in making a decision with respect to Consumers’ debt securities or preferred stock. Similarly, neither Consumers nor any other subsidiary of CMS Energy has any obligation in respect of securities of CMS Energy.

Forward-Looking Statements and Information

This Form 10-K and other CMS Energy and Consumers disclosures may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The use of “might,” “may,” “could,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “forecasts,” “predicts,” “assumes,” and other similar words is intended to identify forward-looking statements that involve risk and uncertainty. This discussion of potential risks and uncertainties is designed to highlight important factors that may impact CMS Energy’s and Consumers’ businesses and financial outlook. CMS Energy and Consumers have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements. These forward-looking statements are subject to various factors that could cause CMS Energy’s and Consumers’ actual results to differ materially from the results anticipated in these statements. These factors include, but are not limited to, the following, all of which are potentially significant:

•the impact and effect of the COVID-19 pandemic, the response to the COVID-19 pandemic, and related economic disruptions including, but not limited to, labor shortages, inflation, and supply chain disruptions, all of which could impact CMS Energy’s and Consumers’ workforce, operations, revenues, expenses, uncollectible accounts, energy efficiency programs, pension funding, PSCR and GCR costs, capital investment programs, cash flows, liquidity, maintenance of existing assets, and other operating expenses

•the impact of new regulation by the MPSC, FERC, and other applicable governmental proceedings and regulations, including any associated impact on electric or gas rates or rate structures

•potentially adverse regulatory treatment or failure to receive timely regulatory orders affecting Consumers that are or could come before the MPSC, FERC, or other governmental authorities

•changes in the performance of or regulations applicable to MISO, METC, pipelines, railroads, vessels, or other service providers that CMS Energy, Consumers, or any of their affiliates rely on to serve their customers

11

•the adoption of or challenges to federal or state laws or regulations or changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, such as those related to energy policy, ROA, PURPA, infrastructure integrity or security, cybersecurity, gas pipeline safety, gas pipeline capacity, energy waste reduction, the environment, regulation or deregulation, reliability, COVID-19 vaccination and testing requirements, health care reforms (including comprehensive health care reform enacted in 2010), taxes, accounting matters, climate change, air emissions, renewable energy, the Dodd-Frank Act, and other business issues that could have an impact on CMS Energy’s, Consumers’, or any of their affiliates’ businesses or financial results

•factors affecting operations, such as costs and availability of personnel, equipment, and materials; weather conditions; natural disasters; catastrophic weather-related damage; scheduled or unscheduled equipment outages; maintenance or repairs; environmental incidents; failures of equipment or materials; electric transmission and distribution or gas pipeline system constraints; interconnection requirements; political and social unrest; general strikes; the government and/or paramilitary response to political or social events; and changes in trade policies or regulations

•the ability of CMS Energy and Consumers to execute cost-reduction strategies

•potentially adverse regulatory or legal interpretations or decisions regarding environmental matters, or delayed regulatory treatment or permitting decisions that are or could come before EGLE, the EPA, and/or the U.S. Army Corps of Engineers, and potential environmental remediation costs associated with these interpretations or decisions, including those that may affect Consumers’ routine maintenance, repair, and replacement classification under NSR regulations

•changes in energy markets, including availability and price of electric capacity and the timing and extent of changes in commodity prices and availability and deliverability of coal, natural gas, natural gas liquids, electricity, oil, gasoline, diesel fuel, and certain related products

•the price of CMS Energy common stock, the credit ratings of CMS Energy and Consumers, capital and financial market conditions, and the effect of these market conditions on CMS Energy’s and Consumers’ interest costs and access to the capital markets, including availability of financing to CMS Energy, Consumers, or any of their affiliates

•the potential effects of the future transition from LIBOR to an alternative reference interest rate in the credit and capital markets

•the investment performance of the assets of CMS Energy’s and Consumers’ pension and benefit plans, the discount rates, mortality assumptions, and future medical costs used in calculating the plans’ obligations, and the resulting impact on future funding requirements

•the impact of the economy, particularly in Michigan, and potential future volatility in the financial and credit markets on CMS Energy’s, Consumers’, or any of their affiliates’ revenues, ability to collect accounts receivable from customers, or cost and availability of capital

•changes in the economic and financial viability of CMS Energy’s and Consumers’ suppliers, customers, and other counterparties and the continued ability of these third parties, including those in bankruptcy, to meet their obligations to CMS Energy and Consumers

•population changes in the geographic areas where CMS Energy and Consumers conduct business

•national, regional, and local economic, competitive, and regulatory policies, conditions, and developments

12

•loss of customer demand for electric generation supply to alternative electric suppliers, increased use of self-generation including distributed generation, or energy waste reduction and storage

•increased renewable energy demand due to customers seeking to meet their own sustainability goals

•the reputational or other impact on CMS Energy and Consumers of the failure to achieve ambitions related to reducing their impact on climate change

•adverse consequences of employee, director, or third-party fraud or non‑compliance with codes of conduct or with laws or regulations

•federal regulation of electric sales, including periodic re‑examination by federal regulators of CMS Energy’s and Consumers’ market-based sales authorizations

•any event, change, development, occurrence, or circumstance that could impact the 2021 IRP filing or give rise to the termination of the associated purchase agreements, including any action by a regulatory authority or other third party to prohibit, delay, impair, or deny approval for or consent to the 2021 IRP or the consummation of the proposed acquisitions

•the availability, cost, coverage, and terms of insurance, the stability of insurance providers, and the ability of Consumers to recover the costs of any insurance from customers

•the effectiveness of CMS Energy’s and Consumers’ risk management policies, procedures, and strategies, including strategies to hedge risk related to interest rates and future prices of electricity, natural gas, and other energy-related commodities

•factors affecting development of electric generation projects, gas transmission, and gas and electric distribution infrastructure replacement, conversion, and expansion projects, including factors related to project site identification, construction material pricing, schedule delays, availability of qualified construction personnel, permitting, acquisition of property rights, and government approvals

•potential disruption to, interruption of, or other impacts on facilities, utility infrastructure, operations, or backup systems due to accidents, explosions, physical disasters, global pandemics, cyber incidents, civil unrest, vandalism, war, or terrorism, and the ability to obtain or maintain insurance coverage for these events

•changes or disruption in fuel supply, including but not limited to supplier bankruptcy and delivery disruptions

•potential costs, lost revenues, reputational harm, or other consequences resulting from misappropriation of assets or sensitive information, corruption of data, or operational disruption in connection with a cyberattack or other cyber incident

•potential disruption to, interruption or failure of, or other impacts on information technology backup or disaster recovery systems

•technological developments in energy production, storage, delivery, usage, and metering

•the ability to implement technology successfully

13

•the impact of CMS Energy’s and Consumers’ integrated business software system and its effects on their operations, including utility customer billing and collections

•adverse consequences resulting from any past, present, or future assertion of indemnity or warranty claims associated with assets and businesses previously owned by CMS Energy or Consumers, including claims resulting from attempts by foreign or domestic governments to assess taxes on or to impose environmental liability associated with past operations or transactions

•the outcome, cost, and other effects of any legal or administrative claims, proceedings, investigations, or settlements

•the reputational impact on CMS Energy and Consumers of operational incidents, violations of corporate policies, regulatory violations, inappropriate use of social media, and other events

•restrictions imposed by various financing arrangements and regulatory requirements on the ability of Consumers and other subsidiaries of CMS Energy to transfer funds to CMS Energy in the form of cash dividends, loans, or advances

•earnings volatility resulting from the application of fair value accounting to certain energy commodity contracts or interest rate contracts

•changes in financial or regulatory accounting principles or policies (e.g., the adoption of the hypothetical liquidation at book value method of accounting for certain non-regulated renewable energy projects)

•other matters that may be disclosed from time to time in CMS Energy’s and Consumers’ SEC filings, or in other public documents

All forward-looking statements should be considered in the context of the risk and other factors described above and as detailed from time to time in CMS Energy’s and Consumers’ SEC filings. For additional details regarding these and other uncertainties, see Item 1A. Risk Factors; Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook; and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

14

Part I

Item 1.    Business

General

CMS Energy

CMS Energy was formed as a corporation in Michigan in 1987 and is an energy company operating primarily in Michigan. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility; and CMS Enterprises, primarily a domestic independent power producer and marketer. CMS Energy was also the parent holding company of EnerBank, an industrial bank located in Utah, until October 1, 2021 when EnerBank was acquired by Regions Bank. Consumers serves individuals and businesses operating in the alternative energy, automotive, chemical, food, and metal products industries, as well as a diversified group of other industries. CMS Enterprises, through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production.

CMS Energy manages its businesses by the nature of services each provides, and operates principally in three business segments: electric utility; gas utility; and enterprises, its non‑utility operations and investments. Consumers’ consolidated operations account for the substantial majority of CMS Energy’s total assets, income, and operating revenue. CMS Energy’s consolidated operating revenue was $7.3 billion in 2021, $6.4 billion in 2020, and $6.6 billion in 2019.

For further information about operating revenue, income, and assets and liabilities attributable to all of CMS Energy’s business segments and operations, see Item 8. Financial Statements and Supplementary Data—CMS Energy Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

Consumers

Consumers has served Michigan customers since 1886. Consumers was incorporated in Maine in 1910 and became a Michigan corporation in 1968. Consumers owns and operates electric generation and distribution facilities and gas transmission, storage, and distribution facilities. It provides electricity and/or natural gas to 6.8 million of Michigan’s 10 million residents. Consumers’ rates and certain other aspects of its business are subject to the jurisdiction of the MPSC and FERC, as well as to NERC reliability standards, as described in Item 1. Business—CMS Energy and Consumers Regulation.

Consumers’ consolidated operating revenue was $7.0 billion in 2021, $6.2 billion in 2020, and $6.4 billion in 2019. For further information about operating revenue, income, and assets and liabilities attributable to Consumers’ electric and gas utility operations, see Item 8. Financial Statements and Supplementary Data—Consumers Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

Consumers owns its principal properties in fee, except that most electric lines, gas mains, and renewable generation projects are located below or adjacent to public roads or on land owned by others and are accessed by Consumers through easements, leases, and other rights. Almost all of Consumers’ properties are subject to the lien of its First Mortgage Bond Indenture. For additional information on Consumers’ properties, see Item 1. Business—Business Segments—Consumers Electric Utility—Electric Utility Properties and Business Segments—Consumers Gas Utility—Gas Utility Properties.

15

In 2021, Consumers served 1.9 million electric customers and 1.8 million gas customers in Michigan’s Lower Peninsula. Presented in the following map are Consumers’ service territories:

		Electric service territory
		Gas service territory
		Combination electric and gas service territory
	•	Electric generation facilities

CMS Energy and Consumers—The Triple Bottom Line

For information regarding CMS Energy’s and Consumers’ purpose and impact on the “triple bottom line” of people, planet, and profit, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview.

Business Segments

Consumers Electric Utility

Electric Utility Operations: Consumers’ electric utility operations, which include the generation, purchase, distribution, and sale of electricity, generated operating revenue of $5.0 billion in 2021, and $4.4 billion in 2020 and 2019. Consumers’ electric utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula.

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Presented in the following illustration is Consumers’ 2021 electric utility operating revenue of $5.0 billion by customer class:

Consumers’ electric utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.

In 2021, Consumers’ electric deliveries were 36 billion kWh, which included ROA deliveries of three billion kWh, resulting in net bundled sales of 33 billion kWh. In 2020, Consumers’ electric deliveries were 35 billion kWh, which included ROA deliveries of three billion kWh, resulting in net bundled sales of 32 billion kWh.

Consumers’ electric utility operations are seasonal. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment.

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Presented in the following illustration are Consumers’ monthly weather-normalized electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during 2021 and 2020:

Consumers’ 2021 summer peak demand was 7,951 MW, which included ROA demand of 581 MW. For the 2020-2021 winter season, Consumers’ peak demand was 5,386 MW, which included ROA demand of 465 MW. As required by MISO reserve margin requirements, Consumers owns or controls, through long-term PPAs and short-term capacity purchases, all of the capacity required to supply its projected firm peak load and necessary reserve margin for summer 2022.

Electric Utility Properties: Consumers owns and operates electric generation and distribution facilities. For details about Consumers’ electric generation facilities, see the Electric Utility Generation and Supply Mix section that follows this Electric Utility Properties section. Consumers’ distribution system consists of:

•208 miles of high-voltage distribution overhead lines operating at 138 kV

•4 miles of high-voltage distribution underground lines operating at 138 kV

•4,428 miles of high-voltage distribution overhead lines operating at 46 kV and 69 kV

•19 miles of high-voltage distribution underground lines operating at 46 kV

•82,474 miles of electric distribution overhead lines

•9,395 miles of underground distribution lines

•1,093 substations with an aggregate transformer capacity of 26 million kVA

•three battery facilities with storage capacity of 2 MWh

Consumers is interconnected to the interstate high-voltage electric transmission system owned by METC and operated by MISO. Consumers is also interconnected to neighboring utilities and to other transmission systems.

Electric Utility Generation and Supply Mix: During 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040. This goal includes not only emissions from

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Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market.

Consumers expects to meet 90 percent of its customers’ needs with clean energy sources by 2040 through execution of its 2021 IRP, which calls for replacing its coal-fueled generation predominantly with investment in renewable energy. Carbon offset measures including, but not limited to, carbon sequestration, methane emission capture, and forest preservation and reforestation may be used to close the gap to achieving net-zero carbon emissions. Specifically, the 2021 IRP provides for a full transition away from coal-fueled generation by the end of 2025 and includes the retirement of the D.E. Karn oil/gas-fueled and coal-fueled generating units in 2023 and the J.H. Campbell coal-fueled generating units in 2025. For further information on Consumers’ progress towards its net-zero carbon emissions goal, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview.

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Presented in the following table are details about Consumers’ 2021 electric generation and supply mix:

Name and Location (Michigan)	Number of Units and Year Entered Service	2021 Generation Capacity (MW)	1	2021 Electric Supply (GWh)
Coal steam generation
J.H. Campbell 1 & 2 – West Olive2	2 Units, 1962-1967	600		3,123
J.H. Campbell 3 – West Olive2,3	1 Unit, 1980	788		4,784
D.E. Karn 1 & 2 – Essexville4	2 Units, 1959-1961	487		2,954
		1,875		10,861
Oil/Gas steam generation
D.E. Karn 3 & 4 – Essexville4	2 Units, 1975-1977	934		128
Hydroelectric
Ludington – Ludington	6 Units, 1973	927	5	(321)	6
Conventional hydro generation – various locations	35 Units, 1906-1949	76		398
		1,003		77
Gas combined cycle
Jackson – Jackson	1 Unit, 2002	541		2,141
Zeeland – Zeeland	3 Units, 2002	531		2,839
		1,072		4,980
Gas combustion turbines
Zeeland (simple cycle) – Zeeland	2 Units, 2001	316		454
Wind generation
Cross Winds® Energy Park – Tuscola County	114 Turbines, 2014, 2018, and 2019	35		661
Lake Winds® Energy Park – Mason County	56 Turbines, 2012	13		239
Gratiot Farms Wind Project – Gratiot County	60 Turbines, 2020	24		354
Crescent Wind Farm – Hillsdale County	60 Turbines, 2021	25		316
		97		1,570
Solar generation
Solar Gardens – Allendale and Kalamazoo	15,100 Panels, 2016	3		6
Total owned generation		5,300		18,076
Purchased power7
Coal generation – T.E.S. Filer City		60		494
Gas generation – MCV Facility8		1,240		4,753
Other gas generation – various locations		160		1,109
Nuclear generation – Palisades8		792		6,901
Wind generation – various locations		43		1,010
Solar generation – various locations		37		140
Other renewable generation – various locations		220		1,258
		2,552		15,665
Net interchange power9		—		645
Total purchased and interchange power		2,552		16,310
Total supply		7,852		34,386
Less distribution and transmission loss				1,786
Total net bundled sales				32,600

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1Represents generation capacity during the summer months (planning year 2021 capacity as reported to MISO and limited by interconnection service limits). For wind and solar generation, the amount represents the effective load-carrying capability.

2Consumers plans to retire these generating units in 2025, subject to MPSC approval.

3Represents Consumers’ share of the capacity of the J.H. Campbell 3 unit, net of the 6.69-percent ownership interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc, each a non-affiliated company.

4Consumers plans to retire these generating units in 2023, subject to MPSC approval.

5Represents Consumers’ 51-percent share of the capacity of Ludington. DTE Electric holds the remaining 49-percent ownership interest.

6Represents Consumers’ share of net pumped-storage generation. The pumped-storage facility consumes electricity to pump water during off-peak hours for storage in order to generate electricity later during peak‑demand hours.

7Represents purchases under long-term PPAs.

8For information about Consumers’ long-term PPAs related to the MCV Facility and Palisades, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Contractual Commitments.

9Represents purchases from the MISO energy market.

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Presented in the following table are the sources of Consumers’ electric supply for the last three years:

GWh
Years Ended December 31	2021	2020	2019
Owned generation
Coal	10,861	7,960	9,776
Gas	5,555	5,883	6,289
Renewable energy	1,974	1,505	1,258
Oil	7	6	5
Net pumped storage1	(321)	(371)	(308)
Total owned generation	18,076	14,983	17,020
Purchased power2
Gas generation	5,862	7,346	6,812
Nuclear generation	6,901	6,898	6,946
Renewable energy generation	2,408	2,225	2,387
Coal generation	494	513	462
Net interchange power3	645	2,655	2,059
Total purchased and interchange power	16,310	19,637	18,666
Total supply	34,386	34,620	35,686

1Represents Consumers’ share of net pumped-storage generation. During 2021, the pumped-storage facility consumed 1,151 GWh of electricity to pump water during off-peak hours for storage in order to generate 830 GWh of electricity later during peak-demand hours.

2Represents purchases under long-term PPAs.

3Represents purchases from the MISO energy market.

During 2021, Consumers acquired 47 percent of the electricity it provided to customers through long-term PPAs and the MISO energy market. Consumers offers its generation into the MISO energy market on a day-ahead and real-time basis and bids for power in the market to serve the demand of its customers. Consumers is a net purchaser of power and supplements its generation capability with purchases from the MISO energy market to meet its customers’ needs during peak-demand periods.

At December 31, 2021, Consumers had future commitments to purchase capacity and energy under long-term PPAs with various generating plants. These contracts require monthly capacity payments based on the plants’ availability or deliverability. The payments for 2022 through 2048 are estimated to total $8.0 billion and, for each of the next five years, range from $0.6 billion to $0.8 billion annually. These amounts may vary depending on plant availability and fuel costs. For further information about Consumers’ future capacity and energy purchase obligations, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity—Other Material Cash Requirements and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Contractual Commitments.

During 2021, 32 percent of the energy Consumers provided to customers was generated by its coal-fueled generating units, which burned six million tons of coal and produced a combined total of 10,861 GWh of electricity. In order to obtain the coal it needs, Consumers enters into physical coal supply contracts.

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At December 31, 2021, Consumers had future commitments to purchase coal through 2023; payment obligations under these contracts totaled $116 million. Most of Consumers’ rail-supplied coal contracts have fixed prices, although some contain market-based pricing. Consumers’ vessel-supplied coal contracts have fixed base prices that are adjusted monthly to reflect changes to the fuel cost of vessel transportation. At December 31, 2021, Consumers had 95 percent of its 2022 expected coal requirements under contract, as well as a 23-day supply of coal on hand.

In conjunction with its coal supply contracts, Consumers leases a fleet of railcars and has transportation contracts with various companies to provide rail and vessel services for delivery of purchased coal to Consumers’ generating facilities. Consumers’ coal transportation contracts are future commitments and expire on various dates through 2025; payment obligations under these contracts totaled $533 million at December 31, 2021.

During 2021, 16 percent of the energy Consumers provided to customers was generated by its natural gas‑fueled generating units, which burned 40 bcf of natural gas and produced a combined total of 5,555 GWh of electricity.

In order to obtain the gas it needs for electric generation fuel, Consumers’ electric utility purchases gas from the market near the time of consumption, at prices that allow it to compete in the electric wholesale market. For units 3 & 4 of D.E. Karn and for the Jackson and Zeeland plants, Consumers utilizes an agent that owns firm transportation rights to each plant to purchase gas from the market and transport the gas to the facilities.

Electric Utility Competition: Consumers’ electric utility business is subject to actual and potential competition from many sources, in both the wholesale and retail markets, as well as in electric generation, electric delivery, and retail services.

Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of Consumers’ sales, with certain exceptions. At December 31, 2021, electric deliveries under the ROA program were at the ten‑percent limit. Of Consumers’ 1.9 million electric customers, fewer than 300, or 0.02 percent, purchased electric generation service under the ROA program. For additional information, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Electric Utility Outlook and Uncertainties.

Consumers also faces competition or potential competition associated with industrial customers relocating all or a portion of their production capacity outside of Consumers’ service territory for economic reasons; municipalities owning or operating competing electric delivery systems; and customer self-generation. Consumers addresses this competition in various ways, including:

•aggressively controlling operating, maintenance, and fuel costs and passing savings on to customers

•providing renewable energy options and energy waste reduction programs

•providing competitive rate-design options, particularly for large energy-intensive customers

•offering tariff-based incentives that support economic development

•monitoring activity in adjacent geographical areas

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Consumers Gas Utility

Gas Utility Operations: Consumers’ gas utility operations, which include the purchase, transmission, storage, distribution, and sale of natural gas, generated operating revenue of $2.1 billion in 2021, $1.8 billion in 2020, and $1.9 billion in 2019. Consumers’ gas utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan’s Lower Peninsula.

Presented in the following illustration is Consumers’ 2021 gas utility operating revenue of $2.1 billion by customer class:

Consumers’ gas utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers’ largest customers is not reasonably likely to have a material adverse effect on Consumers’ financial condition.

In 2021, deliveries of natural gas through Consumers’ pipeline and distribution network, including off-system transportation deliveries, totaled 347 bcf, which included GCC deliveries of 33 bcf. In 2020, deliveries of natural gas through Consumers’ pipeline and distribution network, including off-system transportation deliveries, totaled 360 bcf, which included GCC deliveries of 36 bcf. Consumers’ gas utility operations are seasonal. The consumption of natural gas typically increases in the winter, due primarily to colder temperatures and the resulting use of natural gas as heating fuel. Consumers injects natural gas into storage during the summer months for use during the winter months. During 2021, 46 percent of the natural gas supplied to all customers during the winter months was supplied from storage.

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Presented in the following illustration are Consumers’ monthly weather-normalized natural gas deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including GCC deliveries, during 2021 and 2020:

Gas Utility Properties: Consumers’ gas transmission, storage, and distribution system consists of:

•2,392 miles of transmission lines

•15 gas storage fields with a total storage capacity of 309 bcf and a working gas volume of 151 bcf

•28,065 miles of distribution mains

•eight compressor stations with a total of 149,817 installed and available horsepower

In 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be offset by purchasing and/or producing renewable natural gas. For further information on Consumers’ progress towards its net-zero methane emissions goal, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview.

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Gas Utility Supply: In 2021, Consumers purchased 84 percent of the gas it delivered from U.S. suppliers. The remaining 16 percent was purchased from authorized GCC suppliers and delivered by Consumers to customers in the GCC program. Presented in the following illustration are the supply arrangements for the gas Consumers delivered to GCC and GCR customers during 2021:

Firm gas transportation or firm city-gate contracts are those that define a fixed amount, price, and delivery time frame. Consumers’ firm gas transportation contracts are with Panhandle Eastern Pipe Line Company and Trunkline Gas Company, LLC, each a non‑affiliated company. Under these contracts, Consumers purchases and transports gas to Michigan for ultimate delivery to its customers. Consumers’ firm gas transportation contracts expire on various dates through 2023 and provide for the delivery of 37 percent of Consumers’ total gas supply requirements in 2022. Consumers purchases the balance of its required gas supply under firm city-gate contracts and through authorized suppliers under the GCC program.

Gas Utility Competition: Competition exists in various aspects of Consumers’ gas utility business. Competition comes from GCC and transportation programs; system bypass opportunities for new and existing customers; and from alternative fuels and energy sources, such as propane, oil, and electricity.

Enterprises Segment—Non-Utility Operations and Investments

CMS Energy’s enterprises segment, through various subsidiaries and certain equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. The enterprises segment’s operating revenue was $308 million in 2021, $229 million in 2020, and $248 million in 2019.

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Independent Power Production: Presented in the following table is information about the independent power plants in which CMS Energy had an ownership interest at December 31, 2021:

Location	Ownership Interest (%)	Primary Fuel Type	Gross Capacity (MW)	1	2021 Net Generation (GWh)
Dearborn, Michigan	100	Natural gas2	770		4,087
Gaylord, Michigan	100	Natural gas2	134		7
Paulding County, Ohio	100	Wind	105		260
Paulding County, Ohio	100	Solar and storage	3		4
Comstock, Michigan	100	Natural gas2	76		38
Delta Township, Michigan	100	Solar	24		42
Phillips, Wisconsin	100	Solar	3		5
Coke County, Texas	51	Wind	525		1,793
Filer City, Michigan	50	Coal	73		489
New Bern, North Carolina	50	Wood waste	50		314
Flint, Michigan	50	Wood waste	40		121
Grayling, Michigan	50	Wood waste	38		204
Total			1,841		7,364

1Represents the intended full-load sustained output of each plant. The amount of capacity relating to CMS Energy’s ownership interest was 1,483 MW at December 31, 2021.

2DIG, CMS Generation Michigan Power, and CMS ERM have entered into an agreement to sell these plants to Consumers in 2025, subject to MPSC approval.

The operating revenue from independent power production was $48 million in 2021, and $32 million in 2020 and 2019.

Energy Resource Management: CMS ERM purchases and sells energy commodities in support of CMS Energy’s generating facilities with a focus on optimizing CMS Energy’s independent power production portfolio. In 2021, CMS ERM marketed two bcf of natural gas and 6,305 GWh of electricity. Electricity marketed by CMS ERM was generated by independent power production of the enterprises segment and by unrelated third parties. CMS ERM’s operating revenue was $260 million in 2021, $197 million in 2020, and $216 million in 2019.

Enterprises Segment Competition: The enterprises segment competes with other independent power producers. The needs of this market are driven by electric demand and the generation available.

CMS Energy and Consumers Regulation

CMS Energy, Consumers, and their subsidiaries are subject to regulation by various federal, state, and local governmental agencies, including those described in the following sections. If CMS Energy or Consumers failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material. For more information on the potential impacts of government regulation affecting CMS Energy and Consumers, see Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook, and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

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FERC and NERC

FERC has exercised limited jurisdiction over several independent power plants and exempt wholesale generators in which CMS Enterprises has ownership interests, as well as over CMS ERM, CMS Gas Transmission, and DIG. FERC’s jurisdiction includes, among other things, acquisitions, operations, disposals of certain assets and facilities, services provided and rates charged, and conduct among affiliates. FERC also has limited jurisdiction over holding company matters with respect to CMS Energy. FERC, in connection with NERC and with regional reliability organizations, also regulates generation and transmission owners and operators, load serving entities, purchase and sale entities, and others with regard to reliability of the bulk power system.

FERC regulates limited aspects of Consumers’ gas business, principally compliance with FERC capacity release rules, shipping rules, the prohibition against certain buy/sell transactions, and the price-reporting rule.

FERC also regulates certain aspects of Consumers’ electric operations, including compliance with FERC accounting rules, wholesale and transmission rates, operation of licensed hydroelectric generating plants, transfers of certain facilities, corporate mergers, and issuances of securities.

MPSC

Consumers is subject to the jurisdiction of the MPSC, which regulates public utilities in Michigan with respect to retail utility rates, accounting, utility services, certain facilities, certain asset transfers, corporate mergers, and other matters.

The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders.

Rate Proceedings: For information regarding open rate proceedings, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

Other Regulation

The U.S. Secretary of Energy regulates imports and exports of natural gas and has delegated various aspects of this jurisdiction to FERC and the U.S. Department of Energy’s Office of Fossil Fuels.

The U.S. Department of Transportation’s Office of Pipeline Safety regulates the safety and security of gas pipelines through the Natural Gas Pipeline Safety Act of 1968 and subsequent laws.

The Transportation Security Administration, an agency of the U.S. Department of Homeland Security, regulates certain activities related to the safety and security of natural gas pipelines.

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CMS Energy and Consumers Environmental Strategy and Compliance

CMS Energy and Consumers are committed to protecting the environment; this commitment extends beyond compliance with applicable laws and regulations. In 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040. This goal includes not only emissions from Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market.

Consumers expects to meet 90 percent of its customers’ needs with clean energy sources by 2040 through execution of its 2021 IRP, which calls for replacing its coal-fueled generation predominantly with investment in renewable energy. Carbon offset measures including, but not limited to, carbon sequestration, methane emission capture, and forest preservation and reforestation may be used to close the gap to achieving net-zero carbon emissions.

During 2021, Consumers provided 13 percent of its electricity (self-generated and purchased) from renewable sources. In February 2021, Consumers took ownership and began operation of a 166-MW wind generation project in Hillsdale, Michigan. Additionally, during 2021, Consumers entered into agreements to purchase two solar generating facilities as well as PPAs to purchase renewable energy from solar generating facilities presently being developed by other parties. For additional information on these facilities, which are expected to be operational between 2022 and 2024, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Electric Utility Outlook and Uncertainties.

In addition to Consumers’ efforts to reduce the electric utility’s carbon footprint, it is also making efforts to reduce the gas utility’s methane footprint. In 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be offset by purchasing and/or producing renewable natural gas.

In December 2021, Consumers announced plans to begin development of a renewable natural gas facility that will capture methane from manure generated at a neighboring farm and convert it into renewable natural gas. The facility, expected to start production in 2023, will reduce methane emissions from the dairy farm and allow Consumers to deliver renewable natural gas as a cost-effective clean alternative fuel for customers.

CMS Energy, Consumers, and their subsidiaries are subject to various federal, state, and local environmental regulations for air and water quality, solid waste management, and other matters. Consumers expects to recover costs to comply with environmental regulations in customer rates, but cannot guarantee this result. For additional information concerning environmental matters, see Item 1A. Risk Factors, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook, and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments.

CMS Energy has recorded a $45 million liability for its subsidiaries’ obligations associated with Bay Harbor and Consumers has recorded a $57 million liability for its obligations at a number of former MGP sites. For additional information, see Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments.

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Solid Waste Disposal: Costs related to the construction, operation, corrective action, and closure of solid waste disposal facilities for coal ash are significant. Consumers’ coal ash disposal areas are regulated under Michigan’s solid waste rules and by the EPA’s rules regulating CCRs. To address some of the requirements of these rules, Consumers has converted all of its fly ash handling systems to dry systems. In addition, Consumers’ ash facilities have programs designed to protect the environment and are subject to quarterly EGLE inspections. Consumers’ estimate of capital and cost of removal expenditures to comply with regulations relating to ash disposal is $159 million from 2022 through 2026.

Water: Consumers uses substantial amounts of water to operate and cool its electric generating plants and gas compression stations. Water discharge quality is regulated by the Clean Water Act, under the federal NPDES program, and administered by EGLE. To comply with such regulation, Consumers’ facilities have discharge permits and monitoring programs. The EPA issued final regulations for wastewater discharges from electric generating plants in 2015 and amended them in 2017 and 2020. Consumers’ estimate of capital expenditures to comply with these regulations as presently promulgated is $22 million from 2022 through 2026.

In 2014, the EPA finalized its cooling water intake rule for electric generating units, which requires Consumers to evaluate the biological impact of its cooling water intake systems and ensure that it is using the best technology available to minimize adverse environmental impacts. Consumers’ estimate of capital expenditures to comply with these regulations is $38 million from 2022 through 2026.

Air: Consumers is subject to federal and state environmental regulations that require extensive reductions in nitrogen oxides, sulfur dioxides, particulate matter, and mercury emissions. To comply with these regulations, Consumers has invested in emissions control equipment at its electric generating plants. Consumers’ estimate of ongoing capital expenditures to comply with these regulations is $36 million from 2022 through 2026.

Consumers’ future costs to comply with solid waste disposal, water, and air environmental regulations may vary depending on future legislation, litigation, executive orders, treaties, or rulemaking.

For further information concerning estimated capital expenditures related to solid waste disposal, water, and air, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook—Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook.

Insurance

CMS Energy and its subsidiaries, including Consumers, maintain insurance coverage generally similar to comparable companies in the same lines of business. The insurance policies are subject to terms, conditions, limitations, and exclusions that might not fully compensate CMS Energy or Consumers for all losses. A portion of each loss is generally assumed by CMS Energy or Consumers in the form of deductibles and self-insured retentions that, in some cases, are substantial. As CMS Energy or Consumers renews its policies, it is possible that some of the present insurance coverage may not be renewed or obtainable on commercially reasonable terms due to restrictive insurance markets.

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Human Capital

CMS Energy and Consumers employ a highly trained and skilled workforce comprised of union, non‑union, and seasonal employees, and also use contractors. Presented in the following table are the number of employees and contractors of CMS Energy and Consumers:

December 31	2021	2020	2019
CMS Energy, including Consumers
Full-time employees	8,504	8,148	8,128
Seasonal employees1	613	603	594
Part-time employees	5	86	67
Contractors	656	508	509
Total workforce	9,778	9,345	9,298
Consumers
Full-time employees	8,309	7,617	7,642
Seasonal employees1	613	603	594
Part-time employees	5	10	17
Contractors	656	508	509
Total workforce	9,583	8,738	8,762

1Consumers’ seasonal workforce peaked at 622 employees during 2021, 603 employees during 2020, and 614 employees during 2019. Seasonal employees work primarily during the construction season.

At December 31, 2021, unions represented 41 percent of CMS Energy’s employees and 42 percent of Consumers’ employees. The UWUA represents Consumers’ operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. For information about CMS Energy’s and Consumers’ collective bargaining agreements, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 10, Retirement Benefits.

The safety of employees, customers, and the general public is a priority of CMS Energy and Consumers. Accordingly, CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture. These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions. On an annual basis, CMS Energy and Consumers set various safety goals, with their primary measure being the OSHA recordable incident rate. The recordable incident rate was 1.54 in 2021 and 1.22 in 2020. The target recordable incident rate for 2022 is 1.13. Since 2010, Consumers’ OSHA recordable incident rate has decreased by 40 percent.

In response to the COVID-19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health, safety, and well-being of their co-workers, customers, and communities. CMS Energy and Consumers have aligned with safety and health guidelines from the CDC, OSHA, MIOSHA, and the Michigan Department of Health and Human Services in order to protect their employees, customers, and contractors to ensure the continued delivery of critical energy services. For more information about CMS Energy’s and Consumers’ response to the COVID-19 pandemic, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Executive Overview.

Within the utility industry, there is strong competition for rare, high-demand talent, including those related to renewable energy generation, technology, and data analytics. In order to address this competition and to be able to meet their human capital needs, CMS Energy and Consumers provide

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compensation and benefits that are competitive with industry peers. Furthermore, CMS Energy and Consumers have developed a comprehensive talent strategy, the Talent Roadmap, to attract, develop, and retain highly skilled employees. The strategy focuses on three areas, which are summarized below.

•Cultivating a Purpose-Driven Culture: This goal is aimed at ensuring all co-workers understand how their work drives CMS Energy’s and Consumers’ key strategic goals. CMS Energy’s and Consumers’ progress toward a purpose-driven culture is measured through an engagement index and an empowerment index developed from data obtained through an annual employee engagement survey of union and non-union co-workers administered by a third party. For the year ended December 31, 2021, the employee engagement index score was 81 percent, which ranked in the first quartile of U.S. utilities. The employee empowerment index score, which measures the percentage of employees that feel the workplace promotes empowerment, was 63 percent. Each employee empowerment question was individually benchmarked and ranked in the third quartile of general industry companies. The general industry benchmark was created by the third party who administered the survey through a targeted sampling of working adults within the U.S. who work for firms with widely respected reputations. CMS Energy and Consumers have a goal to achieve a first-quartile empowerment index score by 2026.

•Creating a Breakthrough Employee Experience: A breakthrough employee experience is one that instills pride and ownership in one’s work. To measure progress toward a breakthrough employee experience, CMS Energy and Consumers measure employees’ satisfaction with people processes, such as performance management and hiring and onboarding new employees. For the year ended December 31, 2021, the employee experience index was 77 percent; CMS Energy and Consumers have a goal to achieve a score of 80 percent by 2030.

•Building Skill Sets at Scale: With an overarching goal of ensuring employees have the right skills to succeed, CMS Energy and Consumers measure progress in this area through achievement of workforce planning and hiring milestones and through a first-time skill attainment index to evaluate the effectiveness of training. CMS Energy and Consumers develop skill sets in co-workers through a variety of means, including union apprenticeship programs and yearly trainings for newly required skills. In 2021, CMS Energy and Consumers launched a full-scale development program for leaders to enable robust succession planning and improve employee engagement and empowerment.

This talent strategy allows CMS Energy and Consumers to shape employees’ experience and enable leaders to coach and develop co-workers, source talent, and anticipate and adjust to changing skill sets in the business environment.

Diversity, Equity, and Inclusion

As a part of their Talent Roadmap, CMS Energy and Consumers also employ a comprehensive diversity, equity, and inclusion strategy designed to embed diversity, equity, and inclusion into all aspects of their business. This is done through embedding standards for diversity, equity, and inclusion into all company processes and ensuring these standards are incorporated into all employee experiences. To measure their success, CMS Energy and Consumers utilize select questions in the annual engagement survey to create a diversity, equity, and inclusion index. For the year ended December 31, 2021, the diversity, equity, and inclusion index score was 78 percent; CMS Energy and Consumers have a goal to achieve a score of 80 percent in 2022.

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Co-workers are also empowered to engage in employee resource groups and events that encourage candid conversations around diversity, equity, and inclusion. There are eight employee resource groups available to all co-workers; these groups are, by date of origin:

•the Women’s Advisory Panel, contributing to the achievement of the corporate strategy by supporting the retention, development, and success of women

•the Minority Advisory Panel, promoting a culture of diversity and inclusion among all racial and ethnic minorities through education, leadership, development, and networking

•the Women’s Engineering Network, connecting and empowering women in the science, technology, engineering, and mathematics fields, while building capabilities to support company objectives

•the Veteran’s Advisory Panel, supporting former and active military personnel and assisting in recruiting and retaining veterans through career development

•GEN-ERGY, a multigenerational group designed to bridge the gap of learning, networking, and mentoring across the generations of the workforce

•the Pride Alliance of Consumers Energy, promoting an inclusive environment that is safe, supportive, and respectful for lesbian, gay, bi-sexual, and transgender persons and allies

•capABLE, aimed at removing barriers and creating pathways to meaningful work for employees of all abilities

•Interfaith, a space for co-workers of all backgrounds to gather and celebrate their unique beliefs, creating an environment of understanding and respect for all faiths, religions, and spiritual beliefs, including those with no faith affiliation

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Information About CMS Energy’s and Consumers’ Executive Officers

Presented in the following table are the company positions held during the last five years for each of CMS Energy’s and Consumers’ executive officers as of February 4, 2022:

Name, Age, Position(s)	Period
Garrick J. Rochow (age 47)
CMS Energy
President, CEO, and Director	12/2020 – Present
Executive Vice President	1/2020 – 12/2020
Senior Vice President	7/2016 – 1/2020
Consumers
President, CEO, and Director	12/2020 – Present
Executive Vice President	1/2020 – 12/2020
Senior Vice President	7/2016 – 1/2020
CMS Enterprises
Chairman of the Board, CEO, and Director	12/2020 – Present
Rejji P. Hayes (age 47)1
CMS Energy
Executive Vice President and CFO	5/2017 – Present
Consumers
Executive Vice President and CFO	5/2017 – Present
CMS Enterprises
Executive Vice President, CFO, and Director	5/2017 – Present
EnerBank
Chairman of the Board and Director	10/2018 – 10/2021
Tonya L. Berry (age 49)2
CMS Energy
Senior Vice President	2/2022 – Present
Consumers
Senior Vice President	2/2022 – Present
Vice President	11/2018 – 2/2022
Executive Director, Quality	7/2017 – 11/2018
Catherine A. Hendrian (age 53)
CMS Energy
Senior Vice President	4/2017 – Present
Vice President	3/2015 – 4/2017
Consumers
Senior Vice President	4/2017 – Present
Vice President	3/2015 – 4/2017

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Name, Age, Position(s)	Period
Brandon J. Hofmeister (age 45)
CMS Energy
Senior Vice President	7/2017 – Present
Consumers
Senior Vice President	7/2017 – Present
Vice President	7/2016 – 7/2017
CMS Enterprises
Senior Vice President	9/2017 – Present
Shaun M. Johnson (age 43)
CMS Energy
Senior Vice President and General Counsel	5/2019 – Present
Vice President and Deputy General Counsel	4/2016 – 5/2019
Consumers
Senior Vice President and General Counsel	5/2019 – Present
Vice President and Deputy General Counsel	4/2016 – 5/2019
CMS Enterprises
Senior Vice President, General Counsel, and Director	4/2019 – Present
Vice President and General Counsel	10/2018 – 4/2019
EnerBank
Senior Vice President and General Counsel	8/2018 – 6/2020
Venkat Dhenuvakonda Rao (age 51)
CMS Energy
Senior Vice President	9/2016 – Present
Consumers
Senior Vice President	9/2016 – Present
CMS Enterprises
Director	11/2017 – Present
Senior Vice President	9/2016 – Present
EnerBank
Chairman of the Board	9/2016 – 5/2017
Brian F. Rich (age 47)
CMS Energy
Senior Vice President and Chief Customer Officer	8/2019 – Present
Senior Vice President and Chief Information Officer	7/2016 – 8/2019
Consumers
Senior Vice President and Chief Customer Officer	8/2019 – Present
Senior Vice President and Chief Information Officer	7/2016 – 8/2019
LeeRoy Wells, Jr. (age 43)
CMS Energy
Senior Vice President	12/2020 – Present
Consumers
Senior Vice President	12/2020 – Present
Vice President	8/2017 – 12/2020
Executive Director, Electric Systems Operations and Maintenance	12/2015 – 8/2017

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Name, Age, Position(s)	Period
Scott B. McIntosh (age 46)
CMS Energy
Vice President, Controller, and CAO	9/2021 – Present
Vice President and Controller	6/2021 – 9/2021
Vice President	9/2015 – 6/2021
Consumers
Vice President, Controller, and CAO	9/2021 – Present
Vice President and Controller	6/2021 – 9/2021
Vice President	9/2015 – 6/2021
CMS Enterprises
Vice President, Controller, and CAO	9/2021 – Present
Vice President and Controller	6/2021 – 9/2021
Vice President	9/2015 – 6/2021

1    Prior to joining CMS Energy and Consumers, Mr. Hayes was Executive Vice President and CFO for ITC Holdings Corp., a non‑affiliated company, from May 2014 through November 2016. Mr. Hayes started with ITC Holdings Corp. in 2012 as Vice President of Finance and Treasurer.

2    Prior to July 2017, Ms. Berry was the Manager of Strategic Initiatives at Massachusetts-based Energy Federation, Inc., a non-affiliated company.

There are no family relationships among executive officers and directors of CMS Energy or Consumers. The list of directors and their biographies will be included in CMS Energy’s and Consumers’ definitive proxy statement for their 2022 Annual Meetings of Shareholders to be held May 6, 2022. The term of office of each of the executive officers extends to the first meeting of each of the Boards of Directors of CMS Energy and Consumers after the next annual election of Directors of CMS Energy and Consumers (to be held on May 6, 2022).

Available Information

CMS Energy’s internet address is www.cmsenergy.com. CMS Energy routinely posts important information on its website and considers the Investor Relations section, www.cmsenergy.com/investor-relations, a channel of distribution. Information contained on CMS Energy’s website is not incorporated herein. CMS Energy’s and Consumers’ annual reports on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible free of charge on CMS Energy’s website. These reports are available soon after they are electronically filed with the SEC. Also on CMS Energy’s website are CMS Energy’s and Consumers’:

•Corporate Governance Principles

•Articles of Incorporation

•Bylaws

•Charters and Codes of Conduct (including the Charters of the Audit Committee, Compensation and Human Resources Committee, Finance Committee, and Governance, Sustainability and Public Responsibility Committee, as well as the Employee, Board of Directors, and Third Party Codes of Conduct)

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CMS Energy will provide this information in print to any stockholder who requests it.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address is www.sec.gov.

Item 1A.    Risk Factors

CMS Energy and Consumers are exposed to a variety of factors, often beyond their control, that are difficult to predict and that involve uncertainties that may materially adversely affect CMS Energy’s or Consumers’ business, liquidity, financial condition, or results of operations. Additional risks and uncertainties not presently known or that management believes to be immaterial may also adversely affect CMS Energy or Consumers. The risk factors described in the following sections, as well as the other information included in this report and in other documents filed with the SEC, should be considered carefully before making an investment in securities of CMS Energy or Consumers. Risk factors of Consumers are also risk factors of CMS Energy.

Investment/Financial Risks

CMS Energy depends on dividends from its subsidiaries to meet its debt service obligations.

Due to its holding company structure, CMS Energy depends on dividends from its subsidiaries to meet its debt service and other payment obligations. If sufficient dividends were not paid to CMS Energy by its subsidiaries, CMS Energy might not be able to generate the funds necessary to fulfill its payment obligations.

Consumers’ ability to pay dividends or acquire its own stock from CMS Energy is limited by restrictions contained in Consumers’ preferred stock provisions and potentially by other legal restrictions, such as certain terms in its articles of incorporation and FERC requirements.

CMS Energy has indebtedness that could limit its financial flexibility and its ability to meet its debt service obligations.

The level of CMS Energy’s present and future indebtedness could have several important effects on its future operations, including, among others, that:

•a significant portion of CMS Energy’s cash flow from operations could be dedicated to the payment of principal and interest on its indebtedness and would not be available for other purposes

•covenants contained in CMS Energy’s existing debt arrangements, which require it to meet certain financial tests, could affect its flexibility in planning for, and reacting to, changes in its business

•CMS Energy’s ability to obtain additional financing for working capital, capital expenditures, acquisitions, and general corporate and other purposes could become limited

•CMS Energy could be placed at a competitive disadvantage to its competitors that are less leveraged

•CMS Energy’s vulnerability to adverse economic and industry conditions could increase

•CMS Energy’s future credit ratings could fluctuate

CMS Energy’s ability to meet its debt service obligations and to reduce its total indebtedness will depend on its future performance, which will be subject to general economic conditions, industry cycles, changes in laws or regulatory decisions, and financial, business, and other factors affecting its operations, many of which are beyond its control. CMS Energy cannot make assurances that its businesses will continue to

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generate sufficient cash flow from operations to service its indebtedness, which could require CMS Energy to sell assets or obtain additional financing.

CMS Energy and Consumers have financing needs and could be unable to obtain bank financing or access the capital markets.

CMS Energy and Consumers rely on the capital markets, as well as on bank syndications, to meet their financial commitments and short-term liquidity needs not otherwise funded internally.

Disruptions in the capital and credit markets, or the inability to obtain required FERC authorization for issuances of securities including debt, could adversely affect CMS Energy’s and Consumers’ access to liquidity needed for their businesses. Any liquidity disruption could require CMS Energy and Consumers to take measures to conserve cash including, but not limited to, deferring capital expenditures, changing commodity purchasing strategies to avoid collateral-posting requirements, and reducing or eliminating future share repurchases, dividend payments, or other discretionary uses of cash.

Entering into new financings is subject in part to capital market receptivity to utility industry securities in general and to CMS Energy’s and Consumers’ securities in particular. CMS Energy and Consumers continue to explore financing opportunities to supplement their respective financial strategies. These potential opportunities include refinancing and/or issuing new debt, issuing CMS Energy preferred stock and/or common equity, or entering into commercial paper, bank financing, and leasing arrangements. CMS Energy and Consumers cannot guarantee the capital markets’ acceptance of their securities. CMS Energy may also, from time to time, repurchase (either in open market transactions or through privately negotiated transactions), redeem, or otherwise retire its outstanding debt. Such activities, if any, will depend on prevailing market conditions, contractual restrictions, and other factors. The amounts involved may or may not be material.

Certain of CMS Energy’s and Consumers’ securities and those of their affiliates are rated by various credit rating agencies. A reduction or withdrawal of one or more of its credit ratings could have a material adverse impact on CMS Energy’s or Consumers’ ability to access capital on acceptable terms and maintain commodity lines of credit, could increase their cost of borrowing, and could cause CMS Energy or Consumers to reduce capital expenditures. If either or both were unable to maintain commodity lines of credit, CMS Energy or Consumers might have to post collateral or make prepayments to certain suppliers under existing contracts. Further, since Consumers provides dividends to CMS Energy, any adverse developments affecting Consumers that result in a lowering of its credit ratings could have an adverse effect on CMS Energy’s credit ratings.

Market performance and other changes could decrease the value of employee benefit plan assets, which then could require substantial funding.

The performance of various markets affects the value of assets that are held in trust to satisfy future obligations under CMS Energy’s and Consumers’ pension and postretirement benefit plans. CMS Energy and Consumers have significant obligations under these plans and hold significant assets in these trusts. These assets are subject to market fluctuations and will yield uncertain returns, which could fall below CMS Energy’s and Consumers’ forecasted return rates. A decline in the market value of the assets or a change in the level of interest rates used to measure the required minimum funding levels could significantly increase the funding requirements of these obligations. Also, changes in demographics, including an increased number of retirements or changes in life expectancy assumptions, could significantly increase the funding requirements of the obligations related to the pension and postretirement benefit plans.

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Industry/Regulatory Risks

Changes to ROA could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of Consumers’ sales, with certain exceptions. The proportion of Consumers’ electric deliveries under the ROA program and on the ROA waiting list is over ten percent. Consumers’ rates are regulated by the MPSC, while alternative electric suppliers charge market-based rates, putting competitive pressure on Consumers’ electric supply. If the ROA limit were increased or if electric generation service in Michigan were deregulated, it could have a material adverse effect on CMS Energy and Consumers.

Distributed energy resources could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

Michigan law allows customers to use distributed energy resources for their electric energy needs. These distributed energy resources are connected to Consumers’ electric grid. The state distributed generation program is currently capped by the 2016 Energy Law at one percent of utilities’ peak loads, but Consumers has voluntarily agreed to increase the cap to two percent on its system. Consumers is required to purchase distributed generation customers’ excess generation at rates determined by the MPSC. Recent FERC policy will also soon allow many customer-owned behind-the-meter and grid-connected distributed energy resources to participate in and receive revenue from wholesale electricity markets. Increased customer use of distributed energy resources could result in a reduction of Consumers’ electric sales. Third parties’ operations of distributed energy resources could also potentially have a negative impact on the stability of the grid. An increase in customers’ use of distributed energy resources, and the rate structure for distributed energy resources customers’ use of Consumers’ system and Consumers’ purchases of their excess generation, could have a material adverse effect on CMS Energy and Consumers.

CMS Energy and Consumers are subject to rate regulation, which could have a material adverse effect on financial results.

CMS Energy and Consumers are subject to rate regulation. Consumers’ electric and gas retail rates are set by the MPSC and cannot be changed without regulatory authorization. If rate regulators fail to provide adequate rate relief, it could have a material adverse effect on Consumers or Consumers’ plans for making significant capital investments.

Orders of the MPSC could limit recovery of costs of providing service. These orders could also result in adverse regulatory treatment of other matters. For example, MPSC orders could prevent or curtail Consumers from shutting off non‑paying customers or could prevent or limit the implementation of a gas revenue mechanism.

FERC authorizes certain subsidiaries of CMS Energy to sell wholesale electricity at market-based rates. Failure of these subsidiaries to maintain this FERC authority could have a material adverse effect on CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Transmission rates paid by Consumers and other CMS Energy subsidiaries are also set by FERC, as are the tariff terms governing the participation of Consumers and other CMS Energy subsidiaries in FERC-regulated wholesale electricity markets operated by regional transmission organizations and independent system operators such as MISO and PJM. At least one CMS Energy subsidiary participates in the wholesale electricity markets operated by ERCOT, over which FERC has limited control.

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The various risks associated with the MPSC and FERC regulation of CMS Energy’s and Consumers’ businesses, which include the risk of adverse decisions in any number of rate or regulatory proceedings before either agency, as well as judicial proceedings challenging any agency decisions, could have a material adverse effect on CMS Energy and Consumers. Changes to the tariffs or business practice manuals of certain wholesale market operators such as MISO, PJM, or ERCOT could also have a material adverse effect on CMS Energy and Consumers.

Utility regulation, state or federal legislation, and compliance could have a material adverse effect on CMS Energy’s and Consumers’ businesses.

CMS Energy and Consumers are subject to, or affected by, extensive utility regulation and state and federal legislation. If it were determined that CMS Energy or Consumers failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material. CMS Energy and Consumers cannot predict the impact of new laws, rules, regulations, principles, or practices by federal or state agencies or wholesale electricity market operators, or challenges or changes to present laws, rules, regulations, principles, or practices and the interpretation of any adoption or change. Furthermore, any state or federal legislation concerning CMS Energy’s or Consumers’ operations could also have a material adverse effect.

FERC, through NERC and its delegated regional entities, oversees reliability of certain portions of the electric grid. CMS Energy and Consumers cannot predict the impact of FERC orders or actions of NERC and its regional entities on electric system reliability. Additionally, national gas pipeline infrastructure has recently been under scrutiny following disruptions related to extreme weather and cyber incidents. In 2021, the Transportation Security Administration issued two mandatory security directives related to natural gas pipelines that apply to Consumers. Additional regulation in this area could adversely affect Consumers’ gas operations.

CMS Energy and Consumers have announced an ambitious plan to reduce their impact on climate change. Achieving this plan depends on numerous factors, many of which are outside of their control.

Consumers has announced a long-term strategy for delivering clean, reliable, resilient, and affordable energy, including a plan to end coal use in 2025 as set forth in the 2021 IRP. The MPSC, FERC, other regulatory authorities, or other third parties may prohibit, delay, impair, or deny approval or consent of the 2021 IRP and some or all of the 2021 IRP-associated natural gas-fueled plant acquisitions, or deny reasonable rate recovery of the undepreciated plant balances associated with the retirement of coal-fueled plants necessary to proceed with the 2021 IRP. Consumers may be unable to acquire, site, and/or permit some or all of the generation capacity proposed in the 2021 IRP. Consumers’ ability to implement the 2021 IRP may be affected by global supply chain disruptions and changes in the cost, availability, and supply of generation capacity. Advancements in technology related to items such as battery storage and electric vehicles may not become commercially available or economically feasible as projected in the 2021 IRP. Customer programs such as energy efficiency and demand response may not realize the projected levels of customer participation. CMS Energy and Consumers could suffer financial loss, reputational damage, litigation, or other negative repercussions if they are unable to achieve their ambitious plan.

Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could negatively impact CMS Energy and Consumers.

CMS Energy and Consumers are required to make judgments regarding the potential tax effects of various financial transactions and results of operations in order to estimate their obligations to taxing

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authorities. The tax obligations include income taxes, real estate taxes, sales and use taxes, employment-related taxes, and ongoing issues related to these tax matters. The judgments include determining reserves for potential adverse outcomes regarding tax positions that have been taken and may be subject to challenge by the IRS and/or other taxing authorities. Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect. Additionally, changes in federal, state, or local tax rates or other changes in tax laws could have adverse impacts.

CMS Energy and its subsidiaries, including Consumers, must comply with the Dodd-Frank Act and its related regulations.

The Dodd-Frank Act provides for regulation by the Commodity Futures Trading Commission of certain commodity-related contracts. Although CMS Energy, Consumers, and certain subsidiaries of CMS Enterprises qualify for an end-user exception from mandatory clearing of commodity-related swaps, these regulations could affect the ability of these entities to participate in these markets and could add additional regulatory oversight over their contracting activities.

CMS Energy and Consumers could incur substantial costs to comply with environmental requirements.

CMS Energy and Consumers are subject to costly and stringent environmental regulations that will likely require additional significant capital expenditures for CCR disposal and storage, cooling water intake equipment, effluent treatment, and PCB remediation. In addition, regulatory action on PFAS at the state and/or federal level could cause CMS Energy and Consumers to further test and remediate some sites if PFAS is present at certain levels. Present and reasonably anticipated state and federal environmental statutes and regulations will continue to have a material effect on CMS Energy and Consumers.

CMS Energy and Consumers have interests in fossil-fuel-fired power plants, other types of power plants, and natural gas systems that emit greenhouse gases. Federal and state environmental laws and rules, as well as international accords and treaties, could require CMS Energy and Consumers to install additional equipment for emission controls, undertake heat-rate improvement projects, purchase carbon emissions allowances, curtail operations, invest in generating capacity with fewer carbon dioxide emissions, or take other significant steps to manage or lower the emission of greenhouse gases.

The following risks related to climate change, emissions, and environmental regulations could also have a material adverse impact on CMS Energy and Consumers:

•litigation originated by third parties against CMS Energy or Consumers due to CMS Energy’s or Consumers’ greenhouse gas or other emissions or CCR disposal and storage

•impairment of CMS Energy’s or Consumers’ reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, and legislation

•extreme weather conditions, such as severe storms or flooding, that may affect customer demand, company operations, or assets

Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome. If Consumers were unable to recover these expenditures from customers in rates, CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures.

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For additional information regarding compliance with environmental regulations, see Item 1. Business—CMS Energy and Consumers Environmental Strategy and Compliance and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Outlook.

CMS Energy’s and Consumers’ businesses could be affected adversely by any delay in meeting environmental requirements.

A delay or failure by CMS Energy or Consumers to obtain or maintain any necessary environmental permits or approvals to satisfy any applicable environmental regulatory requirements or install emission or pollution control equipment could:

•prevent the construction of new facilities

•prevent the continued operation and sale of energy from existing facilities

•prevent the suspension of operations at existing facilities

•prevent the modification of existing facilities

•result in significant additional costs

CMS Energy and Consumers expect to incur additional substantial costs related to remediation of legacy environmental sites.

Consumers expects to incur additional substantial costs related to the remediation of its former MGP sites and other response activity costs at a number of other sites, including, but not limited to, sites of retired coal-fueled electric generating units, under NREPA and CERCLA. Consumers believes these costs should be recoverable in rates, but cannot guarantee that outcome.

Business/Operations Risks

There are risks associated with Consumers’ substantial capital investment program planned for the next ten years.

Consumers’ planned investments include the construction or acquisition of electric generation, electric and gas infrastructure, conversions and expansions, environmental controls, electric grid modernization technology, and other electric and gas investments to upgrade delivery systems, as well as decommissioning of older facilities. The success of these capital investments depends on or could be affected by a variety of factors that include, but are not limited to:

•effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers’ control

•effective cost and schedule management of new capital projects

•availability of qualified construction personnel, both internal and contracted

•changes in commodity and other prices, applicable tariffs, and/or material and equipment availability

•governmental approvals and permitting

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•operational performance

•changes in environmental, legislative, and regulatory requirements

•regulatory cost recovery

•inflation of labor rates

•increases in lead times and disruptions in supply chain distribution

•barriers to accessing key materials for renewable projects (solar, battery, and other key equipment) created by geopolitical relations and U.S. relations with China

It is possible that adverse events associated with these factors could have a material adverse effect on Consumers.

CMS Energy and Consumers could be affected adversely by legacy litigation and retained liabilities.

The agreements that CMS Energy and Consumers enter into for the sale of assets customarily include provisions whereby they are required to:

•retain specified preexisting liabilities, such as for taxes, pensions, or environmental conditions

•indemnify the buyers against specified risks, including the inaccuracy of representations and warranties that CMS Energy and Consumers make

•make payments to the buyers depending on the outcome of post-closing adjustments, litigation, audits, or other reviews, including claims resulting from attempts by foreign or domestic governments to assess taxes on past operations or transactions

Many of these contingent liabilities can remain open for extended periods of time after the sales are closed. Depending on the extent to which the buyers might ultimately seek to enforce their rights under these contractual provisions, and the resolution of any disputes concerning them, there could be a material adverse effect on CMS Energy’s or Consumers’ liquidity, financial condition, and results of operations.

In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea. The government of Equatorial Guinea claims that, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating with CMS Energy. CMS Energy has concluded that the government’s tax claim is without merit and believes the likelihood of material loss to be remote, but cannot predict the financial impact or outcome of the matter.

Consumers is exposed to risks related to general economic conditions in its service territories.

Consumers’ electric and gas utility businesses are affected by the economic conditions impacting the customers they serve. If the Michigan economy becomes sluggish or declines, Consumers could experience reduced demand for electricity or natural gas that could result in decreased earnings and cash flow. In addition, economic conditions in Consumers’ service territory affect its collections of accounts receivable and levels of lost or stolen gas.

Consumers is exposed to changes in customer usage that could impact financial results.

Technology advances, government incentives and subsidies, and recent regulatory decisions could increase the cost effectiveness of customer-owned methods of producing electricity and managing energy use resulting in reduced load, cross subsidization, and increased costs.

Customers could also reduce their consumption through demand-side energy conservation and energy waste reduction programs.

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CMS Energy’s and Consumers’ energy sales and operations are affected by seasonal factors and varying weather conditions from year to year.

CMS Energy’s and Consumers’ utility operations are seasonal. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas typically occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel. Accordingly, CMS Energy’s and Consumers’ overall results may fluctuate substantially on a seasonal basis. Mild temperatures during the summer cooling season and winter heating season as well as the impact of extreme weather events on Consumers’ system could have a material adverse effect.

CMS Energy and Consumers are subject to information security risks, risks of unauthorized access to their systems, and technology failures.

In the regular course of business, CMS Energy and Consumers handle a range of sensitive confidential security and customer information. In addition, CMS Energy and Consumers operate in a highly regulated industry that requires the continued operation of sophisticated information and control technology systems and network infrastructure. Despite implementation of security measures, technology systems, including disaster recovery and backup systems, are vulnerable to failure, cyber crime, unauthorized access, and being disabled. These events could impact the reliability of electric generation and electric and gas delivery and also subject CMS Energy and Consumers to financial harm. Cyber crime, which includes the use of malware, computer viruses, and other means for disruption or unauthorized access against companies, including CMS Energy and Consumers, is increasing in frequency, scope, and potential impact. While CMS Energy and Consumers have not been subject to cyber incidents that have had a material impact on their operations to date, their security measures in place may be insufficient to prevent a major cyber incident in the future. If technology systems, including disaster recovery and backup systems, were to fail or be breached, CMS Energy and Consumers might not be able to fulfill critical business functions, and sensitive confidential and proprietary data could be compromised. In addition, because CMS Energy’s and Consumers’ generation, transmission, and distribution systems are part of an interconnected system, a disruption caused by a cyber incident at another utility, electric generator, system operator, or commodity supplier could also adversely affect CMS Energy or Consumers.

A variety of technological tools and systems, including both company-owned information technology and technological services provided by outside parties, support critical functions. The failure of these technologies, including backup systems, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations.

CMS Energy’s and Consumers’ businesses have liability risks.

Consumers’ electric and gas delivery systems, power plants, gas infrastructure including storage facilities, wind energy or solar equipment, and energy products, and the independent power plants owned in whole or in part by CMS Energy could be involved in incidents, failures, or accidents that result in injury, loss of life, or property loss to customers, employees, or the public. Although CMS Energy and Consumers have insurance coverage for many potential incidents (subject to deductibles, limitations, and self-insurance amounts that could be material), depending upon the nature or severity of any incident, failure, or accident, CMS Energy or Consumers could suffer financial loss, reputational damage, and negative repercussions from regulatory agencies or other public authorities.

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CMS Energy and Consumers are subject to risks that are beyond their control, including but not limited to natural disasters, civil unrest, terrorist attacks and related acts of war, cyber incidents, vandalism, and other catastrophic events.

Natural disasters, severe weather, wars, terrorist acts, civil unrest, vandalism, theft, cyber incidents, pandemics, and other catastrophic events could result in severe damage to CMS Energy’s and Consumers’ assets beyond what could be recovered through insurance policies (which are subject to deductibles, limitations, and self-insurance amounts that could be material), could require CMS Energy and Consumers to incur significant upfront costs, and could severely disrupt operations, resulting in loss of service to customers. There is also a risk that regulators could, after the fact, conclude that Consumers’ preparedness or response to such an event was inadequate and take adverse actions as a result.

Energy risk management strategies might not be effective in managing fuel and electricity pricing risks, which could result in unanticipated liabilities to CMS Energy and Consumers or increased volatility in their earnings.

CMS Energy and Consumers are exposed to changes in market prices for commodities including, but not limited to, natural gas, coal, electric capacity, electric energy, emission allowances, gasoline, diesel fuel, and RECs. CMS Energy and Consumers manage commodity price risk using established policies and procedures, and they may use various contracts to manage this risk, including swaps, options, futures, and forward contracts. No assurance can be made that these strategies will be successful in managing CMS Energy’s and Consumers’ risk or that they will not result in net liabilities to CMS Energy or Consumers as a result of future volatility.

A substantial portion of Consumers’ operating expenses for its electric generating plants and vehicle fleet consists of the costs of obtaining these commodities. The contracts associated with Consumers’ fuel for electric generation and purchased power are executed in conjunction with the PSCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its positions in these commodities. If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.

Natural gas prices in particular have been historically volatile. Consumers routinely enters into contracts for natural gas to mitigate exposure to the risks of demand, market effects of weather, and changes in commodity prices associated with the gas distribution business. These contracts are executed in conjunction with the GCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its natural gas positions. If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.

CMS Energy and Consumers do not always hedge any or all of the exposure of their operations from commodity price volatility. Furthermore, the ability to hedge exposure to commodity price volatility depends on liquid commodity markets. As a result, to the extent the commodity markets are illiquid, CMS Energy and Consumers might not be able to execute their risk management strategies, which could result in larger unhedged positions than preferred at a given time. To the extent that unhedged positions exist, fluctuating commodity prices could have a negative effect on CMS Energy and Consumers. Changes in laws that limit CMS Energy’s and Consumers’ ability to hedge could also have a negative effect on CMS Energy and Consumers.

Consumers might not be able to obtain an adequate supply of natural gas or coal, which could limit its ability to operate its electric generation facilities or serve its natural gas customers.

Consumers has natural gas and coal supply and transportation contracts in place for the natural gas and coal it requires for its electric generating capacity. Consumers also has interstate transportation and

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supply agreements in place to facilitate delivery of natural gas to its customers. Apart from the contractual and monetary remedies available to Consumers in the event of a counterparty’s failure to perform under any of these contracts, there can be no assurances that the counterparties to these contracts will fulfill their obligations to provide natural gas or coal to Consumers. The counterparties under the agreements could experience financial or operational problems that inhibit their ability to fulfill their obligations to Consumers. In addition, counterparties under these contracts might not be required to supply natural gas or coal to Consumers under certain circumstances, such as in the event of a natural disaster or severe weather.

If Consumers were unable to obtain its supply requirements, it could be required to purchase natural gas or coal at higher prices or implement its natural gas curtailment program filed with the MPSC.

Unplanned outages or maintenance could be costly for CMS Energy or Consumers.

Unforeseen outages or maintenance of the electric and gas delivery systems, power plants, gas infrastructure including storage facilities and compression stations, wind energy or solar equipment, and energy products owned in whole or in part by CMS Energy or Consumers may be required for many reasons. When unplanned outages occur, CMS Energy and Consumers will not only incur unexpected maintenance expenses, but may also have to make spot market purchases of electric and gas commodities that may exceed CMS Energy’s or Consumers’ expected cost of generation or gas supply, be forced to curtail services, or retire a given asset if the cost or timing of the maintenance is not reasonable and prudent. Unplanned generator outages could reduce the capacity credit CMS Energy or Consumers receives from MISO and could cause CMS Energy or Consumers to incur additional capacity costs in future years.

The COVID-19 pandemic could materially and adversely affect each of CMS Energy’s and Consumers’ business, results of operations, financial condition, capital investment program, liquidity, and cash flows.

The COVID‑19 pandemic has had widespread impacts on people, businesses, economies, and financial markets globally, in the U.S., and in markets where CMS Energy and Consumers conduct business. Future impacts of the pandemic could include a prolonged reduction in economic activity, extended disruption to supply chains and operations, increased labor costs, and reduced availability of labor and productivity. CMS Energy and Consumers provide essential services, which means that CMS Energy and Consumers must keep employees, who operate facilities or interact with customers, safe and minimize unnecessary risk of exposure to COVID‑19. CMS Energy and Consumers have taken extra precautions in an effort to protect the health of employees working in the field and in CMS Energy’s and Consumers’ facilities. CMS Energy and Consumers have also implemented masking and quarantine procedures, in accordance with CDC guidance. This remains an evolving situation; CMS Energy and Consumers will continue to monitor developments and will take additional necessary precautions in order to keep employees, customers, contractors, and communities safe.

The ultimate impact of the COVID‑19 pandemic depends on factors beyond CMS Energy’s and Consumers’ knowledge or control. The degree to which COVID‑19 will ultimately impact CMS Energy and Consumers will depend in part on future developments, including the severity and duration of COVID-19 and its variants, actions or inactions that may be taken by governmental authorities, including, but not limited to, COVID-19 vaccination and testing requirements, and to what extent and when normal economic and operational conditions can resume.

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General Risk Factors

CMS Energy and Consumers are exposed to counterparty risk.

Adverse economic conditions or financial difficulties experienced by counterparties with whom CMS Energy and Consumers do business could impair the ability of these counterparties to pay for CMS Energy’s and Consumers’ services and/or fulfill their contractual obligations, including performance and payment of damages. CMS Energy and Consumers depend on these counterparties to remit payments and perform contracted services in a timely fashion. Any delay or default in payment or performance of contractual obligations could have a material adverse effect on CMS Energy and Consumers.

Volatility and disruptions in capital and credit markets could have a negative impact on CMS Energy’s and Consumers’ lenders, vendors, contractors, suppliers, customers, and other counterparties, causing them to fail to meet their obligations.

CMS Energy and Consumers are exposed to significant reputational risks.

CMS Energy and Consumers could suffer negative impacts to their reputations as a result of operational incidents, violations of corporate policies, regulatory violations, inappropriate use of social media, or other events. Reputational damage could have a material adverse effect and could result in negative customer perception and increased regulatory oversight.

A work interruption or other union actions could adversely affect Consumers.

Unions represent 42 percent of Consumers’ employees. Consumers’ union agreements expire in 2025. If these employees were to engage in a strike, work stoppage, or other slowdown, Consumers could experience a significant disruption in its operations and higher ongoing labor costs.

Failure to attract and retain an appropriately qualified workforce could adversely impact CMS Energy’s and Consumers’ results of operations.

In some areas, competition for skilled employees is high and if CMS Energy and Consumers were unable to match skill sets to future needs, they could encounter operating challenges and increased costs. These challenges could include a lack of resources, loss of knowledge, and delays in skill development. Additionally, higher costs could result from the use of contractors to replace employees, loss of productivity, and safety incidents. Failing to train replacement employees adequately and to transfer internal knowledge and expertise could adversely affect CMS Energy’s and Consumers’ ability to manage and operate their businesses.

Item 1B.    Unresolved Staff Comments

None.

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Item 2.    Properties

Descriptions of CMS Energy’s and Consumers’ properties are found in the following sections of Item 1. Business, all of which are incorporated by reference in this Item 2:

•General—CMS Energy

•General—Consumers

•Business Segments—Consumers Electric Utility—Electric Utility Properties

•Business Segments—Consumers Gas Utility—Gas Utility Properties

•Business Segments—Enterprises Segment—Non-Utility Operations and Investments—Independent Power Production

Item 3.    Legal Proceedings

For information regarding CMS Energy’s and Consumers’ significant pending administrative and judicial proceedings involving regulatory, operating, transactional, environmental, and other matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

CMS Energy, Consumers, and certain of their affiliates are also parties to routine lawsuits and administrative proceedings incidental to their businesses involving, for example, claims for personal injury and property damage, contractual matters, various taxes, and rates and licensing.

Item 4.    Mine Safety Disclosures

Not applicable.

Part II

Item 5.    Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

CMS Energy

CMS Energy’s common stock is traded on the New York Stock Exchange under the symbol CMS. At January 14, 2022, the number of registered holders of CMS Energy’s common stock totaled 27,158, based on the number of record holders.

For additional information regarding securities authorized for issuance under equity compensation plans, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 11, Stock-Based Compensation and Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. For additional information regarding dividends and dividend restrictions, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization.

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Comparison of Five-year Cumulative Total Return

	Five-Year Cumulative Total Return
Company/Index	2016			2017			2018			2019			2020			2021
CMS Energy		$	100		$	117		$	127		$	165		$	164		$	180
S&P 500 Index		100			122			116			153			181			233
Dow Jones Utility Index		100			113			116			147			150			176
S&P 400 Utilities Index		100			111			119			136			117			140

These cumulative total returns assume reinvestments of dividends.

Consumers

Consumers’ common stock is privately held by its parent, CMS Energy, and does not trade in the public market.

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Issuer Repurchases of Equity Securities

Presented in the following table are CMS Energy’s repurchases of common stock for the three months ended December 31, 2021:

Period	Total Number of Shares Purchased1		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
October 1, 2021 to October 31, 2021		706		$	59.73		—		—
November 1, 2021 to November 30, 2021		72		60.29			—		—
December 1, 2021 to December 31, 2021		702		63.73			—		—
Total		1,480		$	61.65		—		—

1All of the common shares were repurchased to satisfy the minimum statutory income tax withholding obligation for common shares that have vested under the PISP. The value of shares repurchased is based on the market price on the vesting date.

Unregistered Sales of Equity Securities

None.

Item 6.    Reserved

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Item 7.    Management’s Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is a combined report of CMS Energy and Consumers.

Executive Overview

CMS Energy is an energy company operating primarily in Michigan. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility; and CMS Enterprises, primarily a domestic independent power producer and marketer. CMS Energy was also the parent holding company of EnerBank, an industrial bank located in Utah, until October 1, 2021 when EnerBank was acquired by Regions Bank as described below. Consumers’ electric utility operations include the generation, purchase, distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas. Consumers’ customer base consists of a mix of primarily residential, commercial, and diversified industrial customers. CMS Enterprises, through its subsidiaries and equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production.

On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million. CMS Energy intends to use the proceeds from the sale to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation.

CMS Energy and Consumers manage their businesses by the nature of services each provides. CMS Energy operates principally in three business segments: electric utility; gas utility; and enterprises, its non‑utility operations and investments. As a result of the sale described above, EnerBank is no longer included in the composition of CMS Energy’s reportable segments. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations. Consumers operates principally in two business segments: electric utility and gas utility. CMS Energy’s and Consumers’ businesses are affected primarily by:

•regulation and regulatory matters

•state and federal legislation

•economic conditions

•weather

•energy commodity prices

•interest rates

•their securities’ credit ratings

The Triple Bottom Line

CMS Energy’s and Consumers’ purpose is to achieve world class performance while delivering hometown service. In support of this purpose, CMS Energy and Consumers employ the “CE Way,” a lean operating model designed to improve safety, quality, cost, delivery, and employee morale.

CMS Energy and Consumers measure their progress toward the purpose by considering their impact on the “triple bottom line” of people, planet, and profit, which is underpinned by performance; this consideration takes into account not only the economic value that CMS Energy and Consumers create for customers and investors, but also their responsibility to social and environmental goals. The triple bottom

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line balances the interests of employees, customers, suppliers, regulators, creditors, Michigan’s residents, the investment community, and other stakeholders, and it reflects the broader societal impacts of CMS Energy’s and Consumers’ activities.

CMS Energy’s Environmental, Social, Governance and Sustainability Report, which is available to the public, describes CMS Energy’s and Consumers’ progress toward world class performance measured in the areas of people, planet, and profit.

People: The people element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to their employees, their customers, the residents of local communities in which they do business, and other stakeholders.

The safety of employees, customers, and the general public is a priority of CMS Energy and Consumers. Accordingly, CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture. These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions. Since 2010, Consumers’ OSHA recordable incident rate has decreased by 40 percent.

In response to the COVID-19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health, safety, and well-being of their co-workers, customers, and communities. CMS Energy and Consumers have aligned with safety and health guidelines from the CDC, OSHA, MIOSHA, and the Michigan Department of Health and Human Services in order to protect their employees, customers, and contractors to ensure the continued delivery of critical energy services.

In addition, while CMS Energy and Consumers have not yet experienced significant labor or supply chain disruption as a result of the COVID-19 pandemic, they continue to monitor minor disruptions and take steps to mitigate against future impacts in order to continue to provide safe and reliable service to customers.

CMS Energy and Consumers also place a high priority on customer value and on providing a hometown customer experience. Consumers’ customer-driven investment program is aimed at improving safety and increasing electric and gas reliability, which has resulted in measurable improvements in customer satisfaction.

In 2021, Consumers filed an updated Electric Distribution Infrastructure Investment Plan with the MPSC, which outlines a five-year strategy to improve its electric distribution system and the reliability of the grid. The plan dedicates over $1 billion annually to projects that will reduce the number and duration of power outages to customers through investment in infrastructure upgrades, forestry management, and grid modernization.

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Central to Consumers’ commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable, including:

•replacement of coal-fueled generation and PPAs with a cost-efficient mix of renewable energy and energy waste reduction and demand response programs

•targeted infrastructure investment to reduce maintenance costs and improve reliability and safety

•supply chain optimization

•economic development to increase sales and reduce overall rates

•information and control system efficiencies

•employee and retiree health care cost sharing

•workforce productivity enhancements

In addition, Consumers’ gas commodity costs declined by 52 percent over the last ten years, due not only to a decrease in market prices but also to Consumers’ improvements to its gas infrastructure and optimization of its gas purchasing and storage strategy. These gas commodity savings are passed on to customers.

Planet: The planet element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to protect the environment. This commitment extends beyond compliance with various state and federal environmental, health, and safety laws and regulations. Management considers climate change and other environmental risks in strategy development, business planning, and enterprise risk management processes.

CMS Energy and Consumers continue to focus on opportunities to protect the environment and to reduce their carbon footprint. As a result of actions already taken, CMS Energy and Consumers have:

•decreased their combined percentage of electric supply (self-generated and purchased) from coal by 13 percentage points since 2015

•reduced carbon dioxide emissions by over 30 percent since 2005

•reduced the amount of water used to generate electricity by nearly 30 percent since 2012

•reduced landfill waste disposal by over 1.6 million tons since 1992

•reduced methane emissions by nearly 20 percent since 2012

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Since 2005, Consumers has reduced its sulfur dioxide and particulate matter emissions by over 90 percent and its nitrogen oxide emissions by over 80 percent. Consumers began tracking mercury emissions in 2007; since that time, it has reduced such emissions by nearly 90 percent. Presented in the following illustration are Consumers’ reductions in these emissions:

The 2016 Energy Law:

•raised the renewable energy standard to 15 percent in 2021; Consumers met the 15-percent requirement in 2021 and expects to meet the requirement in future years with a combination of newly generated RECs and previously generated RECs carried over from prior years

•established a goal of 35 percent combined renewable energy and energy waste reduction by 2025; Consumers achieved 30 percent combined renewable energy and energy waste reduction through 2021

•authorized incentives for demand response programs and energy efficiency programs, referring to the combined initiatives as energy waste reduction programs

•established an integrated planning process for new capacity and energy resources

Consumers’ Clean Energy Plan details its strategy to meet customers’ long-term energy needs. The Clean Energy Plan was originally outlined in Consumers’ 2018 IRP, which was approved by the MPSC in 2019. Under its Clean Energy Plan, Consumers will meet the requirements of the 2016 Energy Law using its clean and lean strategy, which focuses on increasing the generation of renewable energy, helping customers use less energy, and offering demand response programs to reduce demand during critical peak times.

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In June 2021, Consumers filed its 2021 IRP with the MPSC, proposing updates to the Clean Energy Plan. Within its 2021 IRP, which is subject to MPSC approval, Consumers outlines its long-term strategy for delivering clean, reliable, resilient, and affordable energy to its customers, including plans to:

•end the use of coal-fueled generation in 2025, 15 years sooner than initially planned

•purchase existing natural gas-fueled generating units, providing an additional 2,177 MW of nameplate capacity and allowing Consumers to continue providing controllable sources of electricity to customers

•expand its investment in renewable energy, adding nearly 8,000 MW of solar generation by 2040

These steps are expected to enable Consumers to meet and exceed the 2016 Energy Law renewable energy requirements and fulfill increasing customer demand for renewable energy. The 2021 IRP is also expected to allow Consumers to exceed its breakthrough goal of at least 50 percent combined renewable energy and energy waste reduction by 2030.

Consumers has a goal of achieving net-zero carbon emissions from its electric business by 2040. This goal includes not only emissions from Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market. Consumers expects to meet 90 percent of its customers’ needs with clean energy sources by 2040 through execution of its 2021 IRP. Carbon offset measures including, but not limited to, carbon sequestration, methane emission capture, and forest preservation and reforestation may be used to close the gap to achieving net-zero carbon emissions.

Presented in the following illustration is Consumers’ 2021 capacity portfolio and its future capacity portfolio as projected in the 2021 IRP. This illustration includes the effects of purchased capacity and energy waste reduction and uses the nameplate capacity for all energy sources:

1    Does not include RECs.

In 2020, Michigan’s Governor signed an executive order creating the Michigan Healthy Climate Plan, which outlines goals for Michigan to achieve economy-wide net-zero greenhouse gas emissions and to be carbon neutral by 2050. The executive order aims for a 28-percent reduction below 2005 levels of

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greenhouse gas emissions by 2025. Consumers has already surpassed the 28-percent reduction milestone for its owned electric generation and previously announced a goal of achieving net-zero carbon emissions from its electric business by 2040.

In addition to Consumers’ efforts to reduce the electric utility’s carbon footprint, it is also making efforts to reduce the gas utility’s methane footprint. In 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Consumers plans to reduce methane emissions from its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be offset by purchasing and/or producing renewable natural gas.

In December 2021, Consumers announced plans to begin development of a renewable natural gas facility that will capture methane from manure generated at a neighboring farm and convert it into renewable natural gas. The facility, expected to start production in 2023, will reduce methane emissions from the dairy farm and allow Consumers to deliver renewable natural gas as a cost-effective clean alternative fuel for customers.

Additionally, to advance its environmental stewardship in Michigan and to minimize the impact of future regulations, Consumers announced the following five‑year targets during 2018:

•to reduce its water use by one billion gallons; since 2017, Consumers reduced its water usage by over 1.3 billion gallons cumulatively

•to enhance, restore, or protect 5,000 acres of land; since 2017, Consumers enhanced, restored, or protected over 6,000 acres of land cumulatively

•to reduce the amount of waste taken to landfills by 35 percent; compared to 2017, Consumers reduced its landfill waste by 44 percent in 2021

Consumers exceeded each of these targets and is evaluating new targets for the coming years.

CMS Energy and Consumers are monitoring numerous legislative, policy, and regulatory initiatives, including those to regulate greenhouse gases, and related litigation. While CMS Energy and Consumers cannot predict the outcome of these matters, which could affect them materially, they intend to continue to move forward with their clean and lean strategy.

Profit: The profit element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to meeting their financial objectives and providing economic development opportunities and benefits in the communities in which they do business. CMS Energy’s and Consumers’ financial strength allows them to maintain solid investment-grade credit ratings and thereby reduce funding costs for the benefit of customers and investors, to preserve and create jobs, and to reinvest in the communities they serve.

In 2021, CMS Energy’s net income available to common stockholders was $1,348 million, and diluted EPS were $4.66. This compares with net income available to common stockholders of $755 million and diluted EPS of $2.64 in 2020. In 2021, the gain on the sale of EnerBank, along with benefits from gas and electric rate increases and higher electric sales were offset partially by higher service restoration costs, higher distribution, transmission, generation, and compression expenses, and increased depreciation and property taxes, reflecting higher capital spending. A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview.

Over the next five years, Consumers expects weather-normalized electric and gas deliveries to remain stable relative to 2021. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in electric and gas demand.

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Performance: Impacting the Triple Bottom Line

CMS Energy and Consumers remain committed to achieving world class performance while delivering hometown service and positively impacting the triple bottom line of people, planet, and profit. During 2021, CMS Energy and Consumers:

•realized approximately $55 million in cost reductions by leveraging the CE Way and through other initiatives

•introduced a new economic development rate designed to attract new business to Michigan and encourage existing businesses to expand their operations

•achieved five-year planet goals, set in 2018, to save one billion gallons of water; enhance, restore or protect 5000 acres of land in Michigan; and reduce waste sent to landfills by 35 percent

•introduced a new three-year electric vehicle pilot program designed to help fleet owners transition to electric vehicles

•announced plans to begin development of a renewable natural gas facility that will convert agricultural waste into clean, renewable natural gas

•expanded their renewable energy programs that assist both business and residential customers in meeting their sustainability goals

•received recognition as #1 utility company in the U.S. for America’s Best Employers for Women and America’s Best Employers for Diversity by Forbes®

CMS Energy and Consumers will continue to utilize the CE Way to enable them to achieve world class performance and positively impact the triple bottom line. Consumers’ investment plan and the regulatory environment in which it operates also drive its ability to impact the triple bottom line.

Investment Plan: Consumers expects to make capital investments of $25 billion over the next ten years. Over the next five years, Consumers expects to make significant expenditures on infrastructure upgrades and replacements and electric supply projects. While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship. Consumers’ investment program is expected to result in annual rate-base growth of six to eight percent. This rate-base growth, together with cost-control measures, should allow Consumers to maintain affordable customer prices.

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The 2021 IRP, which is subject to MPSC approval, would add over $1 billion of capital expenditures to the $14.3 billion that Consumers already expects to make from 2022 through 2026, which are presented in the following illustration:

Of this amount, Consumers plans to spend $10.8 billion over the next five years to maintain and upgrade its gas infrastructure and electric distribution systems in order to enhance safety and reliability, improve customer satisfaction, reduce energy waste on those systems, and facilitate its clean energy transformation. The gas infrastructure projects comprise $6.4 billion to sustain deliverability, enhance pipeline integrity and safety, and reduce methane emissions. The electric distribution projects comprise $4.4 billion to strengthen circuits and substations, replace poles, and interconnect clean energy resources. Consumers also expects to spend $2.8 billion on new clean generation, which includes investments in wind, solar, and hydro electric generation resources, and $0.7 billion on other electric supply projects.

Regulation: Regulatory matters are a key aspect of Consumers’ business, particularly rate cases and regulatory proceedings before the MPSC, which permit recovery of new investments while helping to ensure that customer rates are fair and affordable. Important regulatory events and developments not already discussed are summarized below.

2021 Electric Rate Case: In December 2021, the MPSC approved an annual rate increase of $27 million, based on a 9.9 percent authorized return on equity that will be reflected in rates beginning January 1, 2022. In its order, the MPSC disallowed cost recovery for certain categories of recently completed capital expenditures incurred by Consumers. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

2021 Gas Rate Case: In December 2021, Consumers filed an application with the MPSC seeking an annual rate increase of $278 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending September 30, 2023. The filing requests authority to recover new

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infrastructure investment and related costs that are expected to allow Consumers to improve system safety and reliability and reduce fugitive methane emissions.

Looking Forward

CMS Energy and Consumers will continue to consider the impact on the triple bottom line of people, planet, and profit in their daily operations as well as in their long-term strategic decisions. Consumers will continue to seek fair and timely regulatory treatment that will support its customer-driven investment plan, while pursuing cost-control measures that will allow it to maintain sustainable customer base rates. The CE Way is an important means of realizing CMS Energy’s and Consumers’ purpose of achieving world class performance while delivering hometown service.

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Results of Operations

CMS Energy Consolidated Results of Operations

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			Change
Net Income Available to Common Stockholders		$	1,348		$	755		$	593
Basic Earnings Per Average Common Share		$	4.66		$	2.65		$	2.01
Diluted Earnings Per Average Common Share		$	4.66		$	2.64		$	2.02

In Millions
Years Ended December 31	2021			2020			Change
Electric utility		$	565		$	554		$	11
Gas utility		302			261			41
Enterprises		23			36			(13)
Corporate interest and other		(144)			(154)			10
Discontinued operations		602			58			544
Net Income Available to Common Stockholders		$	1,348		$	755		$	593

For a summary of net income available to common stockholders for 2020 versus 2019, as well as detailed changes by reportable segment, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations, in the Form 10‑K for the fiscal year ended December 31, 2020, filed February 11, 2021.

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Presented in the following table is a summary of after-tax changes to net income available to common stockholders for 2021 versus 2020:

In Millions
Year Ended December 31, 2020			$	755
Reasons for the change
Consumers electric utility and gas utility
Electric sales	$	54
Gas sales	(23)
Electric rate increase	105
Gas rate increase	74
Lower income tax expense	34
Lower non-operating retirement benefits expenses	33
Absence of 2020 voluntary revenue refund	21
Lower donations	19
Higher service restoration costs	(72)
Higher distribution, transmission, generation, and compression expenses	(43)
Higher depreciation and amortization	(39)
Fleet and other asset impairments1	(34)
Higher forestry costs	(23)
Higher property taxes, reflecting higher capital spending	(17)
Higher demand response expenses	(11)
Absence of 2020 gain on sale of transmission assets, net of voluntary gain sharing	(10)
Other	(16)
			$	52
Enterprises			(13)
Corporate interest and other			10
Discontinued operations			544
Year Ended December 31, 2021			$	1,348

1See Note 2, Regulatory Matters.

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Consumers Electric Utility Results of Operations

Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for 2021 versus 2020 (amounts are presented pre-tax, with the exception of income tax changes):

In Millions
Year Ended December 31, 2020			$	554
Reasons for the change
Electric deliveries1 and rate increases
Rate increase, including return on higher renewable capital spending	$	141
Higher revenue due primarily to favorable weather and sales mix	61
Higher energy waste reduction program revenues	21
Absence of 2020 voluntary revenue refund2	16
Higher other revenues	12
			$	251
Maintenance and other operating expenses
Higher service restoration costs	(97)
Fleet and other asset impairments2	(34)
Higher distribution, transmission, and generation expenses	(31)
Higher forestry costs	(31)
Higher energy waste reduction program costs	(21)
Higher demand response costs	(15)
Absence of 2020 gain on sale of transmission assets, net of voluntary gain sharing	(14)
Higher maintenance and other operating expenses	(9)
			(252)
Depreciation and amortization
Increased plant in service, reflecting higher capital spending			(33)
General taxes
Higher property taxes, reflecting higher capital spending			(10)
Other income, net of expenses
Lower non-operating retirement benefits expenses and other	24
Lower donations	18
Higher other income, net of expenses	5
			47
Interest charges			10
Income taxes
Higher production tax credits attributable primarily to new wind generation projects	15
Absence of prior years’ research and development tax credits3	(7)
Higher electric utility pre-tax earnings	(3)
Higher other income taxes	(7)
			(2)
Year Ended December 31, 2021			$	565

1Deliveries to end-use customers were 36.2 billion kWh in 2021 and 35.4 billion kWh in 2020.

2Includes $20 million for fleet disallowances, $10 million for other disallowances, and $4 million for fleet held-for-sale impairment. See Note 2, Regulatory Matters.

3See Note 12, Income Taxes.

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Consumers Gas Utility Results of Operations

Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for 2021 versus 2020 (amounts are presented pre-tax, with the exception of income tax changes):

In Millions
Year Ended December 31, 2020			$	261
Reasons for the change
Gas deliveries1 and rate increases
Rate increase	$	99
Absence of 2020 voluntary revenue refund	12
Higher energy waste reduction program revenues	9
Lower revenue due to unfavorable weather and sales mix	(27)
Lower other revenues	(5)
			$	88
Maintenance and other operating expenses
Higher distribution, transmission, and compression expenses	(27)
Fleet and other asset impairments2	(11)
Higher energy waste reduction program costs	(9)
Higher maintenance and other operating expenses	(16)
			(63)
Depreciation and amortization
Increased plant in service, reflecting higher capital spending			(21)
General taxes
Higher property taxes, reflecting higher capital spending			(13)
Other income, net of expenses
Lower non-operating retirement benefits expenses and other	20
Lower donations	9
Higher other income, net of expenses	4
			33
Interest charges			(2)
Income taxes
Lower income tax expense due primarily to acceleration of tax benefits associated with cost of removal3	14
Lower income tax expense due primarily to accelerated amortization of excess deferred income taxes3	13
Higher gas utility pre-tax earnings	(6)
Absence of prior years’ research and development tax credits3	(1)
Higher other income taxes	(1)
			19
Year Ended December 31, 2021			$	302

1Deliveries to end-use customers were 282 bcf in 2021 and 283 bcf in 2020.

2Includes $9 million for fleet disallowances and $2 million for other disallowances. See Note 2, Regulatory Matters.

3See Note 12, Income Taxes.

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Enterprises Results of Operations

Presented in the following table are the detailed after-tax changes to the enterprises segment’s net income available to common stockholders for 2021 versus 2020:

In Millions
Year Ended December 31, 2020	$	36
Reason for the change
Lower earnings due primarily to outages at DIG	$	(9)
Absence of refund for alternative minimum tax credit sequestration1	(4)
Year Ended December 31, 2021	$	23

1See Note 12, Income Taxes.

Corporate Interest and Other Results of Operations

Presented in the following table are the detailed after-tax changes to corporate interest and other results for 2021 versus 2020:

In Millions
Year Ended December 31, 2020	$	(154)
Reasons for the change
Absence of loss on early extinguishment of debt	$	12
Reduction in state tax liabilities	7
Absence of refund for alternative minimum tax credit sequestration1	(5)
Preferred stock dividends	(5)
Other	1
Year Ended December 31, 2021	$	(144)

1See Note 12, Income Taxes.

Results of Discontinued Operations

On October 1, 2021, EnerBank was acquired by Regions Bank. As a result, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for 2021 and 2020. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 20, Exit Activities and Discontinued Operations.

Presented in the following table are the detailed after-tax changes to discontinued operations for 2021 versus 2020:

In Millions
Year Ended December 31, 2020	$	58
Reason for the change
Gain on sale of EnerBank	$	514
Higher earnings at discontinued operations	30
Year Ended December 31, 2021	$	602

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Cash Position, Investing, and Financing

At December 31, 2021, CMS Energy had $476 million of consolidated cash and cash equivalents, which included $24 million of restricted cash and cash equivalents. At December 31, 2021, Consumers had $44 million of consolidated cash and cash equivalents, which included $22 million of restricted cash and cash equivalents.

For specific components of net cash provided by operating activities, net cash used in investing activities, and net cash used in investing activities for 2020 versus 2019, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Cash Position, Investing, and Financing, in the Form 10‑K for the fiscal year ended December 31, 2020, filed February 11, 2021.

Operating Activities

Presented in the following table are specific components of net cash provided by operating activities for 2021 versus 2020:

In Millions
CMS Energy, including Consumers
Year Ended December 31, 2020	$	1,276
Reasons for the change
Higher net income	$	578
Non‑cash transactions1	87
Absence of pension contributions	700
Gain from sale of EnerBank in 20212	(657)
Lower cash provided by discontinued operations2	(144)
Unfavorable impact of changes in core working capital,3 due primarily to higher gas prices and the timing of collections on deliveries, offset partially by lower vendor payments	(122)
Favorable impact of changes in other assets and liabilities, due primarily to the absence of a payment to settle litigation and the timing of payments on higher property taxes	101
Year Ended December 31, 2021	$	1,819
Consumers
Year Ended December 31, 2020	$	1,218
Reasons for the change
Higher net income	$	52
Non‑cash transactions1	(14)
Lower postretirement benefits contributions, primarily absence of pension contributions	681
Unfavorable impact of changes in core working capital,3 due primarily to higher gas prices and the timing of collections on deliveries, offset partially by lower vendor payments	(78)
Favorable impact of changes in other assets and liabilities, due primarily to lower income tax payments to CMS Energy and the timing of payments on higher property taxes	123
Year Ended December 31, 2021	$	1,982

1Non‑cash transactions comprise depreciation and amortization, changes in deferred income taxes and investment tax credits, bad debt expense, and other non‑cash operating activities and reconciling adjustments.

2For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

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3Core working capital comprises accounts receivable, accrued revenue, inventories, accounts payable, and accrued rate refunds.

Investing Activities

Presented in the following table are specific components of net cash used in investing activities for 2021 versus 2020:

In Millions
CMS Energy, including Consumers
Year Ended December 31, 2020	$	(2,867)
Reasons for the change
Lower capital expenditures	$	235
Proceeds from sale of EnerBank in 20211, net of cash and cash equivalents sold and transaction costs	898
Absence of proceeds from sale of transmission equipment in 2020	(58)
Higher cash provided by discontinued operations1	563
Other investing activities	(4)
Year Ended December 31, 2021	$	(1,233)
Consumers
Year Ended December 31, 2020	$	(2,246)
Reasons for the change
Lower capital expenditures	$	118
Absence of proceeds from sale of transmission equipment in 2020	(58)
Other investing activities	1
Year Ended December 31, 2021	$	(2,185)

1For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

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Financing Activities

Presented in the following table are specific components of net cash provided by (used in) financing activities for 2021 versus 2020:

In Millions
CMS Energy, including Consumers
Year Ended December 31, 2020	$	1,619
Reasons for the change
Lower debt issuances	$	(2,844)
Lower debt retirements	1,775
Absence of repayments under Consumers’ commercial paper program in 2020	90
Lower issuances of common stock	(227)
Issuance of preferred stock in 2021	224
Higher payments of dividends on common stock	(42)
Absence of debt prepayment costs in 2020	59
Absence of 2020 proceeds from the sale of membership interest in VIE to tax equity investor	(417)
Lower contributions from noncontrolling interest	(30)
Lower cash provided by discontinued operations1	(500)
Other financing activities, primarily the use of customer advances for construction, offset largely by lower debt issuance costs	(2)
Year Ended December 31, 2021	$	(295)
Consumers
Year Ended December 31, 2020	$	1,035
Reasons for the change
Lower debt issuances	$	(1,619)
Lower debt retirements	1,059
Absence of repayments under Consumers’ commercial paper program in 2020	90
Higher repayments of borrowings from CMS Energy	(222)
Lower stockholder contribution from CMS Energy	(75)
Higher payments of dividends on common stock	(85)
Absence of debt prepayment costs in 2020	43
Other financing activities, primarily the use of customer advances for construction, offset partially by lower debt issuance costs	(14)
Year Ended December 31, 2021	$	212

1For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

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Capital Resources and Liquidity

CMS Energy and Consumers expect to have sufficient liquidity to fund their present and future commitments. CMS Energy uses dividends and tax-sharing payments from its subsidiaries and external financing and capital transactions to invest in its utility and non‑utility businesses, retire debt, pay dividends, and fund its other obligations. The ability of CMS Energy’s subsidiaries, including Consumers, to pay dividends to CMS Energy depends upon each subsidiary’s revenues, earnings, cash needs, and other factors. In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers’ dividend restrictions, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization—Dividend Restrictions. During the year ended December 31, 2021, Consumers paid $722 million in dividends on its common stock to CMS Energy.

On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion. CMS Energy intends to use the proceeds from the sale to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation. For information regarding EnerBank, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 20, Exit Activities and Discontinued Operations.

Consumers uses cash flows generated from operations and external financing transactions, as well as stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, and fund its other obligations. Consumers also uses these sources of funding to contribute to its employee benefit plans.

Financing and Capital Resources: CMS Energy and Consumers rely on the capital markets to fund their robust capital plan. Barring any sustained market dislocations or disruptions, CMS Energy and Consumers expect to continue to have ready access to the financial and capital markets and will continue to explore possibilities to take advantage of market opportunities as they arise with respect to future funding needs. If access to these markets were to diminish or otherwise become restricted, CMS Energy and Consumers would implement contingency plans to address debt maturities, which could include reduced capital spending.

In 2020, CMS Energy entered into an equity offering program under which it may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise.

CMS Energy has entered into forward sales transactions under this program, which allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock. As of December 31, 2021, these contracts have an aggregate sales price of $56 million, maturing through 2022. For more information on these forward sale contracts, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization—Issuance of Common Stock.

At December 31, 2021, CMS Energy had $526 million of its revolving credit facility available and Consumers had $1.1 billion available under its revolving credit facilities. CMS Energy and Consumers use these credit facilities for general working capital purposes and to issue letters of credit. An additional source of liquidity is Consumers’ commercial paper program, which allows Consumers to issue, in one or more placements, up to $500 million in the aggregate in commercial paper notes with maturities of up to

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365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2021, there were no commercial paper notes outstanding under this program. For additional details on CMS Energy’s and Consumers’ revolving credit facilities and commercial paper program, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization.

Certain of CMS Energy’s and Consumers’ credit agreements contain covenants that require CMS Energy and Consumers to maintain certain financial ratios, as defined therein. At December 31, 2021, no default had occurred with respect to any financial covenants contained in CMS Energy’s and Consumers’ credit agreements. CMS Energy and Consumers were each in compliance with these covenants as of December 31, 2021, as presented in the following table:

	Limit	Actual
CMS Energy, parent only
Debt to Capital1	< 0.70 to 1.0	0.54 to 1.0
Consumers
Debt to Capital2	< 0.65 to 1.0	0.48 to 1.0

1Applies to CMS Energy’s revolving credit agreement and letter of credit reimbursement agreement.

2Applies to Consumers’ revolving credit agreements and letter of credit agreement.

Material Cash Requirements: Based on the present investment plan, during 2022, Consumers projects capital expenditures of $2.6 billion. Additionally, CMS Energy’s other material cash requirements for 2022 include $2.3 billion of purchase obligations and $843 million of principal and interest payments on long-term debt. Consumers’ other material cash requirements for 2022 comprise $2.2 billion of purchase obligations and $653 million of principal and interest payments on long-term debt.

Components of CMS Energy’s and Consumers’ cash management plan include controlling operating expenses and capital expenditures and evaluating market conditions for financing and refinancing opportunities. CMS Energy’s and Consumers’ present level of cash and expected cash flows from operating activities, together with access to sources of liquidity, are anticipated to be sufficient to fund contractual obligations and other material cash requirements for 2022 and beyond.

Capital Expenditures: Over the next five years, Consumers expects to make substantial capital investments. Consumers may revise its forecast of capital expenditures periodically due to a number of factors, including environmental regulations, MPSC approval or disapproval, business opportunities, market volatility, economic trends, and the ability to access capital. Presented in the following table are Consumers’ estimated capital expenditures, including lease commitments, for 2022 through 2026:

In Billions
	2022			2023			2024			2025			2026			Total
Consumers
Electric utility operations		$	1.5		$	1.7		$	1.7		$	1.5		$	1.5		$	7.9
Gas utility operations		1.1			1.2			1.3			1.4			1.4			6.4
Total Consumers		$	2.6		$	2.9		$	3.0		$	2.9		$	2.9		$	14.3

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Other Material Cash Requirements: Presented in the following table are CMS Energy’s and Consumers’ material cash obligations from known contractual and other legal obligations:

In Billions
	Payments Due
December 31, 2021	Less Than One Year			Total
CMS Energy, including Consumers
Long-term debt		$	0.4		$	12.6
Interest payments on long-term debt		0.5			12.3
Purchase obligations		2.3			12.5
AROs		—			2.2
Total obligations		$	3.2		$	39.6
Consumers
Long-term debt		$	0.4		$	8.5
Interest payments on long-term debt		0.3			6.6
Purchase obligations		2.2			12.0
AROs		—			2.2
Total obligations		$	2.9		$	29.3

Purchase obligations arise from long-term contracts for the purchase of commodities and related services, plant purchase commitments, and construction and service agreements. The commodities and related services include long-term PPAs, natural gas and associated transportation, and coal and associated transportation. For more information on CMS Energy’s and Consumers’ purchase obligations, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Contractual Commitments.

CMS Energy, Consumers, and certain of their subsidiaries enter into various arrangements in the normal course of business to facilitate commercial transactions with third parties. These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees. For additional details on indemnity and guarantee arrangements, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Guarantees. For additional details on letters of credit and CMS Energy’s forward sales contracts, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 4, Financings and Capitalization.

Outlook

Several business trends and uncertainties may affect CMS Energy’s and Consumers’ financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy’s and Consumers’ consolidated income, cash flows, or financial position. For additional details regarding these and other uncertainties, see Forward-Looking Statements and Information; Item 1A. Risk Factors; and Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

Consumers Electric Utility Outlook and Uncertainties

Clean Energy Plan: Consumers’ Clean Energy Plan details its strategy to meet customers’ long-term energy needs. The Clean Energy Plan was originally outlined in Consumers’ 2018 IRP, which was approved by the MPSC in 2019. In June 2021, Consumers filed its 2021 IRP with the MPSC, proposing

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updates to the Clean Energy Plan. Under its 2021 IRP, Consumers proposes to eliminate the use of coal-fueled generation in 2025 and expects to meet 90 percent of its customers’ needs with clean energy sources by 2040.

Specifically, the 2021 IRP provides for a full transition away from coal-fueled generation by the end of 2025 and includes:

•the retirement of the D.E. Karn oil/gas-fueled and coal-fueled generating units, totaling 1,734 MW of nameplate capacity, in 2023

•the retirement of the J.H. Campbell coal-fueled generating units, totaling 1,407 MW of nameplate capacity, in 2025

The MPSC has authorized Consumers to issue securitization bonds to finance the recovery of and return on the D.E. Karn coal-fueled generating units. In the 2021 IRP, Consumers has requested regulatory asset treatment to recover the remaining book value of and return on the other D.E. Karn units and the J.H. Campbell coal-fueled generating units.

To bridge the transition away from coal generation, the 2021 IRP proposes:

•the purchase of the New Covert Generating Facility, a natural gas-fueled generating unit with 1,176 MW of nameplate capacity in Van Buren County, Michigan, in 2023

•the purchase, in 2025, of the enterprises segment’s three natural gas-fueled generating units, totaling 1,001 MW of nameplate capacity:

◦the 770-MW DIG plant located in Dearborn, Michigan

◦a 156-MW peaking generating unit located in Gaylord, Michigan

◦a 75-MW peaking generating unit located in Comstock, Michigan

These investments are expected to allow Consumers to continue providing controllable sources of electricity to customers while expanding its investment in renewable energy. The 2021 IRP forecasts renewable energy capacity levels of 35 percent in 2025, 47 percent in 2030, and 63 percent in 2040, including the addition of nearly 8,000 MW of solar generation. Under its 2021 IRP, Consumers will continue to bid new capacity competitively. The updated plan proposes that Consumers will own and operate at least 50 percent of new capacity, with the remainder being built and owned by third parties.

Consumers’ Clean Energy Plan provides the foundation for its goal to achieve net-zero carbon emissions from its electric business by 2040. Under this net-zero goal, Consumers plans to eliminate the impact of carbon emissions created by the electricity it generates or purchases for customers.

Through its Clean Energy Plan, Consumers continues to make progress on expanding its customer programs, namely its demand response, energy efficiency, and conservation voltage reduction programs, as well as increasing its renewable energy and pumped storage generation.

In support of its Clean Energy Plan, Consumers issued requests for proposals in 2019 and 2020, each to acquire up to 300 MW of new capacity from projects to be operational in Michigan’s Lower Peninsula by May 2023. Specifically, Consumers solicited offers to enter into PPAs with or purchase solar generation projects ranging in size from 20 MW to 150 MW and to enter into PPAs with PURPA qualifying facilities up to 20 MW. Any contracts entered into as a result of the requests for proposals would be subject to MPSC approval.

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As a result of the requests for proposals, Consumers has entered into PPAs to purchase renewable capacity, energy, and RECs from solar generating facilities and build transfer agreements to purchase solar generating facilities, as presented in the following table:

Type of Agreement	Capacity (MW)	Location of Facility	Expected Commercial Operation1	Date of Agreement	Date of MPSC Approval
2019 request
PPA (25 years)	140	Calhoun County, Michigan	2022	December 2020	April 2021
Build transfer agreement	150	Southeastern Michigan	2023/2024	January 2021	April 2021
2020 request
PPA (20 years)	30	Manistee, Michigan	2022	May 2021	September 2021
PPA (25 years)2	100	Calhoun County, Michigan	2023	October 2021	November 2021
PPA (20 years)2	125	Jackson County, Michigan	2023	October 2021	November 2021
Build transfer agreement	150	Southeastern Michigan	2023/2024	October 2021	November 2021

1    For build transfer agreements, represents the date Consumers expects to take full ownership and begin commercial operation.

2    This agreement provides Consumers the option to purchase the associated solar generating facility after ten years.

In addition, Consumers issued a request for proposals in September 2021 to acquire up to 500 MW of new capacity from projects to be operational in Michigan’s Lower Peninsula by December 2024. Specifically, Consumers solicited offers to enter into PPAs with or purchase solar generation projects up to 300 MW in size and to enter into PPAs with PURPA qualifying facilities up to five MW in size. Consumers will acquire at least 250 MW through long-term PPAs. Any contracts entered into as a result of the request for proposals would be subject to MPSC approval.

Renewable Energy Plan: The 2016 Energy Law raised the renewable energy standard to 15 percent in 2021. Consumers is required to submit RECs, which represent proof that the associated electricity was generated from a renewable energy resource, in an amount equal to at least the required percentage of Consumers’ electric sales volume each year. Under its renewable energy plan, Consumers met the 15-percent requirement in 2021 and expects to meet the requirement in future years with a combination of newly generated RECs and previously generated RECs carried over from prior years.

Under Consumers’ renewable energy plan, the MPSC has approved the acquisition of up to 525 MW of new wind generation projects and authorized Consumers to earn a 10.7 percent return on equity on any projects approved by the MPSC. Specifically, the MPSC has approved the following:

•purchase and construction of a 150-MW wind generation project in Gratiot County, Michigan; the project became operational in December 2020

•purchase of a 166-MW wind generation project in Hillsdale, Michigan; the project became operational and Consumers took full ownership in February 2021

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•purchase of a wind generation project under development, with capacity of up to 201 MW, in Gratiot County, Michigan; Consumers expects to take full ownership and begin commercial operation of the project before 2024

The MPSC also approved the execution of a 20-year PPA under which Consumers will purchase 100 MW of renewable capacity, energy, and RECs from a 149-MW solar generating facility to be constructed in Calhoun County, Michigan; the facility is expected to be operational in 2022.

Voluntary Large Customer Renewable Energy Program: Consumers provides service under a program that provides large full-service electric customers with the opportunity to advance the development of renewable energy beyond the requirements of the 2016 Energy Law. In September 2021, the MPSC approved Consumers’ request to amend its renewable energy plan to remove the annual subscription limit associated with this program. The MPSC also approved up to 1,000 MW of new wind and solar generation projects between 2024 and 2027 to meet customer demand for the program. Consumers will competitively solicit for additional renewable energy assets based on customer applications and will construct the assets based on customer subscriptions to the program.

Electric Customer Deliveries and Revenue: Consumers’ electric customer deliveries are seasonal and largely dependent on Michigan’s economy. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment. In addition, Consumers’ electric rates, which follow a seasonal rate design, are higher in the summer months than in the remaining months of the year. In June 2021, electric residential customers transitioned to a summer peak time-of-use rate that allows them to take advantage of lower-cost energy during off-peak times during the summer months. Thus, customers can reduce their electric bills by shifting their consumption from on‑peak to off‑peak times.

In response to the COVID‑19 pandemic, Michigan’s Governor and the Michigan Department of Health and Human Services have issued numerous orders throughout 2020 and 2021 restricting business, educational, and personal activities at varying levels. In June 2021, almost all restrictions were lifted and Consumers expects businesses and residents to continue resuming normal activities and for weather-normalized electric deliveries to stabilize.

Over the next five years, Consumers expects weather-normalized electric deliveries to remain stable relative to 2021. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in electric demand. Actual delivery levels will depend on:

•energy conservation measures and results of energy waste reduction programs

•weather fluctuations

•Michigan’s economic conditions, including utilization, expansion, or contraction of manufacturing facilities, population trends, and housing activity

Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent of Consumers’ sales, with certain exceptions. At December 31, 2021, electric deliveries under the ROA program were at the ten‑percent limit. Of Consumers’ 1.9 million electric customers, fewer than 300, or 0.02 percent, purchased electric generation service under the ROA program.

The 2016 Energy Law established a path to ensure that forward capacity is secured for all electric customers in Michigan, including customers served by alternative electric suppliers under ROA. The law also authorized the MPSC to ensure that alternative electric suppliers have procured enough capacity to cover their anticipated capacity requirements for the four-year forward period. In 2017, the MPSC issued an order establishing a state reliability mechanism for Consumers. Under this mechanism, if an alternative

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electric supplier does not demonstrate that it has procured its capacity requirements for the four-year forward period, its customers will pay a set charge to the utility for capacity that is not provided by the alternative electric supplier. All alternative electric suppliers have demonstrated that they have procured their capacity requirements through the MISO planning year beginning June 1, 2024.

During 2017, the MPSC issued orders finding that it has statutory authority to determine and implement a local clearing requirement, which requires all electric suppliers to demonstrate that a portion of the capacity procured to serve customers during peak demand times is located in the MISO footprint in Michigan’s Lower Peninsula. In April 2020, the Michigan Supreme Court affirmed the MPSC’s statutory authority to implement a local clearing requirement on individual electric providers.

In September 2020, ABATE and another intervenor filed a complaint against the MPSC in the U.S. District Court for the Eastern District of Michigan challenging the constitutionality of a local clearing requirement. The complaint requests the federal court to issue a permanent injunction prohibiting the MPSC from implementing a local clearing requirement on individual electric providers. In December 2020, Consumers filed a motion to intervene and defend the local clearing requirement in that federal litigation; this motion was granted in January 2021 and this case remains pending.

Electric Rate Matters: Rate matters are critical to Consumers’ electric utility business. For additional details on rate matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

2021 Electric Rate Case: In December 2021, the MPSC approved an annual rate increase of $27 million, based on a 9.9 percent authorized return on equity that will be reflected in rates beginning January 1, 2022. In its order, the MPSC disallowed cost recovery for certain categories of recently completed capital expenditures incurred by Consumers. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

Depreciation Rate Case: In March 2021, Consumers filed a depreciation case related to its electric and common utility property. In this case, Consumers requested to increase depreciation expense, and its recovery of that expense by $43 million annually. In December 2021, the MPSC approved a settlement agreement that decreases depreciation expense by $27 million annually based on December 31, 2019 balances. The new depreciation rates will be reflected in rates beginning January 1, 2022, concurrent with rates to be implemented in accordance with Consumers’ recently approved electric rate case.

PSCR Plan: Consumers submitted its 2022 PSCR plan to the MPSC in September 2021 and, in accordance with its proposed plan, self-implemented the 2022 PSCR charge beginning in January 2022.

Retention Incentive Program: In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs. Consumers expects to recognize $5 million of retention benefit costs in 2022; this expense will be deferred as a regulatory asset. For additional details on this program, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 20, Exit Activities and Discontinued Operations. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC.

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Electric Environmental Outlook: Consumers’ operations are subject to various state and federal environmental laws and regulations. Consumers estimates that it will incur capital expenditures of $255 million from 2022 through 2026 to continue to comply with RCRA, the Clean Water Act, the Clean Air Act, and numerous state and federal environmental regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result. Consumers’ primary environmental compliance focus includes, but is not limited to, the following matters.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers.

CSAPR, which initially became effective in 2015, requires Michigan and many other states to improve air quality by reducing power plant emissions that, according to EPA modeling, contribute to ground-level ozone and fine particle pollution in other downwind states. In 2016, the EPA finalized ozone season standards for CSAPR, which became effective in 2017. In 2020, in response to a court-ordered remand due to litigation, the EPA proposed a revised CSAPR rule to reflect updated emission reductions from electric generating units in 12 states, including Michigan. The EPA finalized this revised rule in March 2021, with continued emission reductions through 2024. Consumers has evaluated its emission compliance strategy for existing units based on the proposed number of allowances allocated to Michigan for 2021 through 2024 and believes the impact of this rule should be minimal.

In 2012, the EPA published emission standards for electric generating units, known as MATS, based on Section 112 of the Clean Air Act. Under MATS, all of Consumers’ existing coal-fueled electric generating units were required to add additional controls for hazardous air pollutants. Consumers met the deadline for five coal-fueled units and two oil/gas-fueled units it continues to operate and retired its seven remaining coal-fueled units. In May 2020, the EPA finalized changes to the supporting analysis used to enact the MATS rule. However, in January 2022, the EPA announced a proposed rule to revoke this 2020 finding and reaffirm that it is appropriate and necessary to regulate emissions of hazardous air pollutants from coal- and oil-fueled power plants. The EPA is also considering whether more stringent protections for hazardous air pollution from power plants are feasible and warranted. Consumers will continue to monitor the MATS rule status and any pending litigation. Consumers does not expect any changes to the MATS rule will have a significant impact on its current MATS compliance strategy.

In 2015, the EPA lowered the NAAQS for ozone. The 2015 ozone NAAQS made it more difficult to construct or modify power plants and other emission sources in areas of the country that have not met the 2015 ozone standard. In 2018, the EPA designated certain areas of Michigan as not meeting the ozone standard. Specifically, seven counties in southeastern Michigan and three counties in western Michigan were not in attainment with the ozone standard by an August 2021 regulatory deadline, and thus may have their nonattainment designations increased from marginal to moderate. None of Consumers’ fossil-fuel-fired generating units are located in these areas. The State of Michigan has convened industry workgroups to seek implementation and control strategy ideas for statewide compliance of the 2015 ozone standard, which will need to be in place by early 2023. In January 2022, EGLE submitted a request to the EPA for redesignation of the seven counties in southeastern Michigan to be in attainment with the 2015 ozone standard based on the most recent data. EGLE is awaiting the EPA’s response to that request. Consumers will continue to stay engaged with EGLE and the workgroups to assess potential impacts to its generating assets.

In August 2020, the EPA proposed to retain the 2015 NAAQS for ozone without revision and finalized this regulatory decision in December 2020. In October 2021, the EPA provided notice that it was going to reconsider the December 2020 ozone NAAQS decision. The EPA believes it will complete this reconsideration by December 2023. Although this action may ultimately result in more ozone nonattainment areas in Michigan, Consumers does not expect that any litigation involving NAAQS for ozone or lowering of the ozone standard will have a material adverse impact on its generating assets.

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Consumers’ strategy to comply with air quality regulations, including CSAPR, MATS, and NAAQS, as well as its legal obligations, involved the installation and operation of emission control equipment at some facilities and the suspension of operations at others; however, Consumers continues to evaluate these rules in conjunction with other EPA and EGLE rulemakings, litigation, executive orders, treaties, and congressional action. This evaluation could result in:

•a change in Consumers’ fuel mix

•changes in the types of generating units Consumers may purchase or build in the future

•changes in how certain units are operated

•the retirement, mothballing, or repowering with an alternative fuel of some of Consumers’ generating units

•changes in Consumers’ environmental compliance costs

Greenhouse Gases: There have been numerous legislative and regulatory initiatives at the state, regional, national, and international levels that involve the potential regulation of greenhouse gases. Consumers continues to monitor and comment on these initiatives and to follow litigation involving greenhouse gases.

In 2015, the EPA finalized new rules pursuant to Section 111(b) of the Clean Air Act to limit carbon dioxide emissions from new electric generating units, as well as modified or reconstructed electric generating units. New coal-fueled units would not be able to meet this limit without installing carbon dioxide control equipment using such methods as carbon capture and sequestration.

In 2018, the EPA proposed a revised Section 111(b) regulation to replace the 2015 standard rule limiting carbon dioxide emissions from new electric generating units, citing limited availability and high costs of carbon capture and sequestration equipment as reasons to change the 2015 rule. The revised Section 111(b) regulation would require new coal-fueled generating units to meet a highly efficient steam cycle performance standard. If finalized, Consumers does not expect this proposal to change its existing environmental strategy. The EPA has not formally indicated whether they intend to finalize this rulemaking or instead pursue a new set of regulations.

In 2019, the EPA finalized the Affordable Clean Energy rule, which required individual states to evaluate coal‑fueled power plants for heat‑rate improvements that could increase overall plant efficiency. In January 2021, the D.C. Circuit Court of Appeals vacated and remanded this rule to the EPA which, in turn, appealed the rule to the U.S. Supreme Court. In October 2021, the U.S. Supreme Court agreed to hear an appeal of this case. A decision is expected by June 2022. Consumers cannot evaluate the potential impact of the rule until any appeals and EPA actions are resolved. It is anticipated that the EPA will propose a new regulation in 2022 addressing greenhouse gas emissions from existing fossil-fueled electric generating units, potentially under the Clean Air Act; however, Consumers cannot predict the form and extent of such potential regulation as it is likely to be impacted by the U.S. Supreme Court’s decision on the Affordable Clean Energy rule.

In 2015, a group of 195 countries, including the U.S., finalized the Paris Agreement, which addresses carbon dioxide reduction measures beginning in 2020. While the U.S. had withdrawn from the Paris Agreement, it rejoined the Paris Agreement in 2021. In April 2021, the U.S. announced it is committing to a nationally determined contribution under the Paris Agreement. Nationally determined contributions are the efforts by each country to reduce national greenhouse gas emissions. The commitment made by the U.S. is to reduce greenhouse gas emissions by 50 to 52 percent from 2005 levels by 2030. In its 2021 IRP, pending MPSC approval, Consumers proposed a 60-percent reduction in its carbon emissions from 2005 levels by 2025. At this time, Consumers does not expect any adverse changes to its environmental strategy as a result of these events, as the nationally determined contribution is not binding without new Congressional legislation.

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In 2020, Michigan’s Governor signed an executive order creating the Michigan Healthy Climate Plan, which outlines goals for Michigan to achieve economy-wide net-zero greenhouse gas emissions and to be carbon neutral by 2050. The executive order aims for a 28-percent reduction below 2005 levels of greenhouse gas emissions by 2025. Consumers has already surpassed the 28-percent reduction milestone for its owned electric generation and previously announced a goal of achieving net-zero carbon emissions from its electric business by 2040. The order directs EGLE to develop and oversee an action plan for achieving these goals. In addition, the Governor established the Council on Climate Solutions, an advisory group of key stakeholders to be appointed by the Governor that will assist EGLE in implementing the plan. These goals are aspirational in nature and any changes in law or regulation to achieve these goals would need to be approved by Michigan Legislature or the relevant regulatory agency. The MPSC has requested comments from utilities and other stakeholders on how the Governor’s goal should be incorporated into future IRP filings. Consumers does not expect any adverse changes to its environmental strategy as a result of these events.

While Consumers cannot predict the outcome of changes in U.S. policy or of other legislative or regulatory initiatives involving the potential regulation of greenhouse gases, it intends to continue to move forward with its Clean Energy Plan, its present net-zero carbon reduction goal, and its emphasis on reliable and resilient supply. Consumers will continue to monitor regulatory and legislative activity and related litigation regarding greenhouse gas emissions standards that may affect electric generating units.

Increased frequency of severe weather events, including those due to climate change, could materially impact Consumers’ facilities, energy sales, and results of operations. Consumers is unable to predict these events or their financial impact; however, Consumers evaluates the potential physical impacts of climate change on its operations, including increased temperature, increased storm activity, increased rainfall, and higher lake and river levels. Consumers is taking steps to mitigate these risks as appropriate.

Litigation, international treaties, executive orders, federal laws and regulations (including regulations by the EPA), and state laws and regulations, if enacted or ratified, could ultimately impact Consumers. Consumers may be required to replace equipment; install additional emission control equipment; purchase emission allowances or credits; curtail operations; arrange for alternative sources of supply; purchase facilities that generate fewer emissions; mothball or retire facilities that generate certain emissions; pursue energy efficiency or demand response measures more swiftly; or take other steps to manage or lower the emission of greenhouse gases. Although associated capital or operating costs relating to greenhouse gas regulation or legislation could be material and cost recovery cannot be assured, Consumers expects to recover these costs in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.

CCRs: In 2015, the EPA published a rule regulating CCRs under RCRA. This 2015 rule adopts minimum standards for beneficially reusing and disposing of non‑hazardous CCRs. The rule establishes new minimum requirements for CCR unit location, design, structural stability, groundwater monitoring and correction action, flood protection, fugitive dust control, recordkeeping, and public disclosure of certain records, including any groundwater protection standard exceedances. The 2015 rule also sets out conditions under which some CCR units would be forced to cease receiving CCR and non‑CCR wastewater and initiate closure based on the inability to achieve minimum safety standards, meet a location standard, or meet minimum groundwater standards. Due to litigation, many aspects of the 2015 CCR rule have been remanded to the EPA, which has resulted in numerous proposed rules and three final rules. One of the final rules is in litigation. Anticipated litigation related to remanded aspects that have not been addressed will add uncertainty around requirements for compliance and state permit programs.

The EPA amended the conditions of forced closure in a rule published in August 2020. The August 2020 rule required all unlined CCR units to initiate closure by mid-April 2021, unless conditions that satisfied an alternate closure schedule were approved by the EPA. Consumers, with agreement from EGLE,

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completed the work necessary to initiate closure by excavating CCRs or placing a final cover over each of its relevant CCR units prior to the April 2021 closure initiation deadline.

Separate from the 2015 or 2020 rules, Congress passed legislation in 2016 allowing participating states to develop permitting programs for CCRs under RCRA Subtitle D. In 2018, the Michigan Legislature adopted standards for a permitting program, which requires the EPA’s authorization. This program should reduce costly, duplicative oversight over CCRs and provide local oversight to CCR issues unique to Michigan. In April 2020, EGLE submitted a regulatory package for Michigan’s permit program to the EPA for its review, which is still pending. Federal rulemaking challenges may delay EPA approval of the Michigan permitting program.

Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.

Water: Multiple water-related regulations apply, or may apply, to Consumers.

The EPA regulates cooling water intake systems of existing electric generating plants under Section 316(b) of the Clean Water Act and the corresponding rules that were revised in 2014. The rules seek to reduce alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers submitted to EGLE for approval all required studies and recommended plans to comply with Section 316(b), but has not yet received final approval.

In 2015, the EPA released its final effluent limitation guidelines for steam electric generating plants. These guidelines, which are presently being litigated, set stringent new requirements for the discharge from electric generating units into surface waters. The EPA published a final rule in October 2020, with an effective date of December 2020, revising the 2015 guidelines related to the discharge of certain wastewater streams from electric generating units. The rule also allows for extension of the compliance deadline from the end of 2023 to the end of 2025, upon approval by EGLE through the NPDES permitting process. Consumers received such an extension to 2025 for its Campbell generating facility in 2021. Consumers does not expect any adverse changes to its environmental strategy as a result of these revisions to the rule or any litigation of the guidelines.

In January 2020, the EPA and the U.S. Army Corps of Engineers finalized a rule under the Clean Water Act that repealed a 2015 definition of “Waters of the United States,” narrowed the scope of federal jurisdiction, and reduced the frequency of dual jurisdiction in states with authority to regulate the same waters; Michigan is one such state. In November 2021, the EPA and the U.S. Army Corps of Engineers proposed to revise the 2020 “Waters of the United States” definition to revert to the 2015 “Waters of the United States” definition, with changes reflecting the EPA’s interpretation of intervening U.S. Supreme Court decisions. The proposed November 2021 rulemaking may change how Consumers interacts with federal jurisdictional waters within Michigan, which may add additional requirements to existing compliance programs, or may require additional permitting for infrastructure projects. However, Consumers does not expect adverse changes to its environmental strategy as a result of the current interpretations. The “Waters of the United States” definition continues to be litigated in multiple jurisdictions.

Many of Consumers’ facilities maintain NPDES permits, which are renewed every five years and are vital to the facilities’ operations. Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.

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Protected Wildlife: Multiple regulations apply, or may apply, to Consumers relating to protected species and habitats.

Statutes like the Endangered Species Act, the Migratory Bird Treaty Act, and the Bald and Golden Eagle Protection Act may impact operations at Consumers’ facilities. In May 2021, the U.S. Fish and Wildlife Service proposed to repeal a January 2021 rule related to incidental take of migratory birds. In November 2021, the U.S. Fish and Wildlife Service published an advanced notice of proposed rulemaking outlining its intent to regulate incidental take under the Migratory Bird Treaty Act. Permitting and monitoring fees and restrictions on operations associated with the rules could impact Consumers’ existing and future operations, including wind and solar generation facilities.

Additionally, Consumers is monitoring proposed changes to the listing status of several species within its operational area due to an increase in wildlife-related regulatory activity. A change in species listed under the Endangered Species Act may impact Consumers’ costs to mitigate its impact on protected species and habitats at certain existing facilities as well as siting choices for new facilities.

Other Matters: Other electric environmental matters could have a material impact on Consumers’ outlook. For additional details on other electric environmental matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Electric Utility Contingencies—Electric Environmental Matters.

Consumers Gas Utility Outlook and Uncertainties

Gas Deliveries: Consumers’ gas customer deliveries are seasonal. The peak demand for natural gas typically occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.

Over the next five years, Consumers expects weather-normalized gas deliveries to remain stable relative to 2021. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in gas demand. Actual delivery levels will depend on:

•weather fluctuations

•use by power producers

•availability and development of renewable energy sources

•gas price changes

•Michigan’s economic conditions, including population trends and housing activity

•the price or demand of competing energy sources or fuels

•energy efficiency and conservation impacts

Gas Rate Matters: Rate matters are critical to Consumers’ gas utility business. For additional details on rate matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

Gas Rate Case: In December 2021, Consumers filed an application with the MPSC seeking an annual rate increase of $278 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending September 30, 2023. The filing requests authority to recover new infrastructure investment and related costs that are expected to allow Consumers to improve system safety and

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reliability and reduce fugitive methane emissions. Presented in the following table are the components of the requested increase in revenue:

In Millions
Projected Twelve-Month Period Ending September 30	2022
Components of the requested rate increase
Investment in rate base	$	247
Operating and maintenance costs	(4)
Cost of capital	22
Sales	13
Total	$	278

The filing also seeks approval of a revenue decoupling mechanism that would annually reconcile Consumers’ actual weather-normalized non-fuel revenues with the revenues approved by the MPSC.

Depreciation Rate Case: In December 2021, Consumers filed a depreciation case related to its gas utility plant property. In this case, Consumers requested a decrease in depreciation expense of $1 million annually based on December 31, 2020 balances.

GCR Plan: Consumers submitted its 2022-2023 GCR plan to the MPSC in December 2021 and, in accordance with its proposed plan, expects to self-implement the 2022-2023 GCR charge beginning in April 2022.

Gas Pipeline and Storage Integrity and Safety: The PHMSA has published various rules that expand federal safety standards for gas transmission pipelines and underground storage facilities. To comply with these rules, Consumers will incur increased capital and operating and maintenance costs to install and remediate pipelines and to expand inspections, maintenance, and monitoring of its existing pipelines and storage facilities. The initial requirements in the regulation took effect in July 2020, with future regulation phases to be released over numerous years.

Although associated capital or operating and maintenance costs relating to these regulations could be material and cost recovery cannot be assured, Consumers expects to recover such costs in rates consistent with the recovery of other reasonable costs of complying with laws and regulations. Consumers will continue to monitor gas safety regulations and continue implementation of the American Petroleum Institute’s Recommended Practice 1173, Pipeline Safety Management Systems. This program minimizes gas system asset- and performance-related risks by ensuring that there are policies, procedures, work instructions, forms, and records in place to streamline adoption and deployment of any existing or future regulations.

Gas Environmental Outlook: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies—Gas Environmental Matters.

Air Quality: In 2015, the EPA lowered the NAAQS for ozone. The 2015 ozone NAAQS made it more difficult to construct or modify power plants and other emission sources in areas of the country that have not met the 2015 ozone standard. In 2018, the EPA designated certain areas of Michigan as not meeting the ozone standard. Specifically, seven counties in southeastern Michigan and three counties in western Michigan were not in attainment with the ozone standard by an August 2021 regulatory deadline, and thus may have their nonattainment designations increased from marginal to moderate. Some of Consumers’ compressor stations are located in these areas. The State of Michigan has convened industry workgroups

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to seek implementation and control strategy ideas for statewide compliance of the 2015 ozone standard, which will need to be in place by early 2023. In January 2022, EGLE submitted a request to the EPA for redesignation of the seven counties in southeastern Michigan to be in attainment with the 2015 ozone standard based on the most recent data. EGLE is awaiting the EPA’s response to that request.

In August 2020, the EPA proposed to retain the 2015 NAAQS for ozone without revision and finalized this regulatory decision in December 2020. In October 2021, the EPA provided notice that it was going to reconsider the December 2020 ozone NAAQS decision. The EPA believes it will complete this reconsideration by December 2023. Consumers will continue to stay engaged with EGLE and the workgroups to assess potential impacts to its compressor stations.

Greenhouse Gases: Consumers is making voluntary efforts to reduce its gas utility’s methane emissions. In 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. Under its Methane Reduction Plan, Consumers plans to reduce methane emissions from its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be offset by purchasing and/or producing renewable natural gas.

In November 2021, the EPA released a proposed rule to regulate methane for the oil and gas sector. This proposed rule is not expected to have a material adverse impact on Consumers’ natural gas storage, compressor stations, and distribution systems, as it applies upstream of Consumers’ facilities.

In 2020, Michigan’s Governor signed an executive order creating the Michigan Healthy Climate Plan, which outlines goals for Michigan to achieve economy-wide net-zero greenhouse gas emissions and to be carbon neutral by 2050. The executive order aims for a 28-percent reduction below 2005 levels of greenhouse gas emissions by 2025. These new goals could impact Consumers’ gas business over the long term. Consumers is evaluating decarbonization options for its gas business including energy efficiency, renewable natural gas, carbon offsets, and other decarbonization methods. As one strategy, Consumers recently requested the MPSC’s approval of a proposed program that would allow gas customers to purchase carbon offset credits on a voluntary basis. Similarly, in December 2021, Consumers announced plans to begin development of a renewable natural gas facility that will capture methane from manure generated at a neighboring farm and convert it into renewable natural gas. For additional details on the executive order, see Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook.

In 2015, a group of 195 countries, including the U.S., finalized the Paris Agreement, which addresses carbon dioxide reduction measures beginning in 2020. While the U.S. had withdrawn from the Paris Agreement, it rejoined the Paris Agreement in 2021. In April 2021, the U.S. announced it is committing to a nationally determined contribution under the Paris Agreement. Nationally determined contributions are the efforts by each country to reduce national greenhouse gas emissions. The commitment made by the U.S. is to reduce greenhouse gas emissions by 50 to 52 percent from 2005 levels by 2030. In its 2021 IRP, pending MPSC approval, Consumers proposed a 60-percent reduction in its carbon emissions from 2005 levels by 2025. At this time, Consumers does not expect any adverse changes to its environmental strategy as a result of these events, as the nationally determined contribution is not binding without new Congressional legislation.

There is increasing interest at the federal, state, and local levels involving potential regulation of greenhouse gases or its sources. Such regulation, if adopted, may involve requirements to reduce methane emissions from Consumers’ gas utility operations and carbon dioxide emissions from natural gas customer use. No such measures apply to Consumers at this time. Consumers continues to monitor these initiatives and comment as appropriate. Consumers cannot predict the impact of any potential future legislation or regulation on its gas utility.

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Consumers Electric Utility and Gas Utility Outlook and Uncertainties

Energy Waste Reduction Plan: The 2016 Energy Law authorized incentives for demand response programs and energy efficiency programs, referring to the combined initiatives as energy waste reduction programs. The law also set a requirement to achieve annual reductions of 1.0 percent in customers’ electricity use through 2021 and 0.75 percent in customers’ natural gas use indefinitely and established a goal of 35 percent combined renewable energy and energy waste reduction by 2025. Consumers achieved 30 percent combined renewable energy and energy waste reduction through 2021.

Additionally, the MPSC has approved the recovery of demand response costs and an associated financial incentive based on demand response target performance.

Under its energy waste reduction plan, Consumers provides its customers with incentives to reduce usage by offering energy audits; rebates and discounts on purchases of highly efficient appliances; and other incentives and programs.

Enterprises Outlook and Uncertainties

CMS Energy’s primary focus with respect to its enterprises businesses is to maximize the value of generating assets, its share of which represents 1,483 MW of capacity, and to pursue opportunities for the development of renewable generation projects.

In June 2021, DIG, CMS Generation Michigan Power, and CMS ERM entered into an agreement with Consumers to sell, for $515 million, subject to certain adjustments, the enterprises segment’s three natural gas-fueled generating units, totaling 1,001 MW of nameplate capacity:

•the 770-MW DIG plant located in Dearborn, Michigan

•a 156-MW peaking generating unit located in Gaylord, Michigan

•a 75-MW peaking generating unit located in Comstock, Michigan

The parties plan to close the sale, which is dependent upon regulatory approvals, in 2025.

The enterprises segment’s assets may be affected by environmental laws and regulations. The 2015 ozone NAAQS made it more difficult to construct or modify power plants and other emission sources in areas of the country that have not met the 2015 ozone standard. In 2018, the EPA designated certain areas of Michigan as not meeting the ozone standard. The DIG plant is in one such area and, as a result, would be subject to additional permitting restrictions in the event of any future modifications. For additional details regarding the new ozone NAAQS, see Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook.

Trends, uncertainties, and other matters related to the enterprises segment that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include:

•investment in and financial benefits received from renewable energy and energy storage projects

•changes in energy and capacity prices

•severe weather events and climate change associated with increasing levels of greenhouse gases

•changes in commodity prices and interest rates on certain derivative contracts that do not qualify for hedge accounting and must be marked to market through earnings

•changes in various environmental laws, regulations, principles, or practices, or in their interpretation

•indemnity and environmental remediation obligations at Bay Harbor

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•indemnity obligations assumed in connection with the purchase or ownership of an interest in one or more facilities that involve tax equity financing

•representations, warranties, and indemnities provided by CMS Energy in connection with previous sales of assets

For additional details regarding the enterprises segment’s uncertainties, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments.

Other Outlook and Uncertainties

Litigation: CMS Energy, Consumers, and certain of their subsidiaries are named as parties in various litigation matters, as well as in administrative proceedings before various courts and governmental agencies, arising in the ordinary course of business. For additional details regarding these and other legal matters, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

Critical Accounting Policies and Estimates

The following information is important to understand CMS Energy’s and Consumers’ results of operations and financial condition. For additional accounting policies, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 1, Significant Accounting Policies.

In the preparation of CMS Energy’s and Consumers’ consolidated financial statements, estimates and assumptions are used that may affect reported amounts and disclosures. CMS Energy and Consumers use accounting estimates for asset valuations, unbilled revenue, depreciation, amortization, financial and derivative instruments, employee benefits, stock-based compensation, the effects of regulation, indemnities, contingencies, and AROs. Actual results may differ from estimated results due to changes in the regulatory environment, regulatory decisions, lawsuits, competition, and other factors. CMS Energy and Consumers consider all relevant factors in making these assessments.

Accounting for the Effects of Industry Regulation: Because Consumers has regulated operations, it uses regulatory accounting to recognize the effects of the regulators’ decisions on its financial statements. Consumers continually assesses whether future recovery of its regulatory assets is probable by considering communications and experience with its regulators and changes in the regulatory environment. If Consumers determined that recovery of a regulatory asset were not probable, Consumers would be required to write off the asset and immediately recognize the expense in earnings.

Contingencies: CMS Energy and Consumers make judgments regarding the future outcome of various matters that give rise to contingent liabilities. For such matters, they record liabilities when they are considered probable and reasonably estimable, based on all available information. In particular, CMS Energy and Consumers are participating in various environmental remediation projects for which they have recorded liabilities. The recorded amounts represent estimates that may take into account such considerations as the number of sites, the anticipated scope, cost, and timing of remediation work, the available technology, applicable regulations, and the requirements of governmental authorities. For remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. The amount recorded for any contingency may differ from actual costs incurred when the contingency is resolved. For additional details, see Item 8. Financial Statements and

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Supplementary Data—Notes to the Consolidated Financial Statements—Note 3, Contingencies and Commitments.

Derivative Instruments: CMS Energy and Consumers account for certain contracts as derivative instruments. If a contract is a derivative and does not qualify for the normal purchases and sales exception, it is recorded on the consolidated balance sheets at its fair value. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities.

The criteria used to determine if an instrument qualifies for derivative accounting or for an exception from derivative accounting are complex and often require judgment in application. Changes in business strategies or market conditions, as well as a requirement to apply different interpretations of the derivative accounting literature, could result in changes in accounting for a single contract or groups of contracts, which could have a material impact on CMS Energy’s and Consumers’ financial statements. For additional details on CMS Energy’s and Consumers’ derivatives and how the fair values of derivatives are determined, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 5, Fair Value Measurements.

Income Taxes: The amount of income taxes paid by CMS Energy is subject to ongoing audits by federal, state, and foreign tax authorities, which can result in proposed assessments. An estimate of the potential outcome of any uncertain tax issue is highly judgmental. CMS Energy believes adequate reserves have been provided for these exposures; however, future results may include favorable or unfavorable adjustments to the estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. Additionally, CMS Energy’s judgment as to the ability to recover its deferred tax assets may change. CMS Energy believes the valuation allowances related to its deferred tax assets are adequate, but future results may include favorable or unfavorable adjustments. As a result, CMS Energy’s effective tax rate may fluctuate significantly over time. For additional details, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 12, Income Taxes.

Pension and OPEB: CMS Energy and Consumers provide retirement pension benefits to certain employees under non‑contributory DB Pension Plans, and they provide postretirement health and life benefits to qualifying retired employees under an OPEB Plan.

CMS Energy and Consumers record liabilities for pension and OPEB on their consolidated balance sheets at the present value of the future obligations, net of any plan assets. The calculation of the liabilities and associated expenses requires the expertise of actuaries, and requires many assumptions, including:

•life expectancies

•discount rates

•expected long-term rate of return on plan assets

•rate of compensation increases

•expected health care costs

A change in these assumptions could change significantly CMS Energy’s and Consumers’ recorded liabilities and associated expenses.

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Presented in the following table are estimates of credits and cash contributions through 2024 for the DB Pension Plans and OPEB Plan. Actual future costs, credits, and contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB Pension Plans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

In Millions
	DB Pension Plans						OPEB Plan
	Credit			Contribution			Credit			Contribution
CMS Energy, including Consumers
2022		$	(10)		$	—		$	(120)		$	—
2023		(31)			—			(114)			—
2024		(52)			—			(104)			—
Consumers1
2022		$	(7)		$	—		$	(113)		$	—
2023		(27)			—			(107)			—
2024		(47)			—			(97)			—

1Consumers’ pension and OPEB costs are recoverable through its general ratemaking process.

Lowering the expected long-term rate of return on the assets of the DB Pension Plans by 25 basis points would increase estimated pension cost for 2022 by $8 million for both CMS Energy and Consumers. Lowering the PBO discount rates by 25 basis points would increase estimated pension cost for 2022 by $5 million for both CMS Energy and Consumers.

Pension and OPEB plan assets are accounted for and disclosed at fair value. Fair value measurements incorporate assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Development of these assumptions may require judgment.

For additional details on postretirement benefits, including the fair value measurements for the assets of the DB Pension Plans and OPEB Plan, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 10, Retirement Benefits.

Unbilled Revenues: Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Consumers records unbilled revenues as accounts receivable and accrued revenue on its consolidated balance sheet. For additional information on unbilled revenues, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 14, Revenue.

New Accounting Standards

There are no new accounting standards issued but not yet effective that are expected to have a material impact on CMS Energy’s or Consumers’ consolidated financial statements.

85

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

CMS Energy and Consumers are exposed to market risks including, but not limited to, changes in interest rates, commodity prices, and investment security prices. They may enter into various risk management contracts to mitigate exposure to these risks, including swaps, options, futures, and forward contracts. CMS Energy and Consumers enter into these contracts using established policies and procedures, under the direction of an executive oversight committee consisting of certain officers and a risk committee consisting of those and other officers and business managers.

The following risk sensitivities illustrate the potential loss in fair value, cash flows, or future earnings from financial instruments, assuming a hypothetical adverse change in market rates or prices of ten percent. Potential losses could exceed the amounts shown in the sensitivity analyses if changes in market rates or prices were to exceed ten percent.

Long-Term Debt: CMS Energy and Consumers are exposed to interest-rate risk resulting from issuing fixed-rate and variable-rate debt instruments. CMS Energy and Consumers use a combination of these instruments, and may also enter into interest-rate swap agreements, in order to manage this risk and to achieve a reasonable cost of capital.

Presented in the following table is a sensitivity analysis of interest-rate risk on CMS Energy’s and Consumers’ debt instruments, which includes the effects of interest-rate swaps (assuming an adverse change in market interest rates of ten percent):

In Millions
December 31	2021			2020
Fixed-rate financing—potential loss in fair value
CMS Energy, including Consumers		$	639		$	612
Consumers		402			372

The fair value losses in the above table could be realized only if CMS Energy and Consumers transferred all of their fixed-rate financing to other creditors. The annual earnings exposure related to variable-rate financing was immaterial for both CMS Energy and Consumers at December 31, 2021 and 2020, assuming an adverse change in market interest rates of ten percent. For additional details on financial instruments see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 6, Financial Instruments.

86

Item 8.    Financial Statements and Supplementary Data

Index to Financial Statements

CMS Energy Consolidated Financial Statements		88
Consolidated Statements of Income		88
Consolidated Statements of Comprehensive Income		90
Consolidated Statements of Cash Flows		92
Consolidated Balance Sheets		94
Consolidated Statements of Changes in Equity		96
Consumers Consolidated Financial Statements		98
Consolidated Statements of Income		98
Consolidated Statements of Comprehensive Income		99
Consolidated Statements of Cash Flows		100
Consolidated Balance Sheets		102
Consolidated Statements of Changes in Equity		104
Notes to the Consolidated Financial Statements		105
1:	Significant Accounting Policies	105
2:	Regulatory Matters	108
3:	Contingencies and Commitments	114
4:	Financings and Capitalization	120
5:	Fair Value Measurements	125
6:	Financial Instruments	128
7:	Plant, Property, and Equipment	129
8:	Leases and Palisades Financing	133
9:	Asset Retirement Obligations	138
10:	Retirement Benefits	140
11:	Stock-Based Compensation	151
12:	Income Taxes	154
13:	Earnings Per Share—CMS Energy	158
14:	Revenue	160
15:	Other Income and Other Expense	164
16:	Cash and Cash Equivalents	164
17:	Reportable Segments	165
18:	Related-Party Transactions—Consumers	170
19:	Variable Interest Entities	170
20:	Exit Activities and Discontinued Operations	172
21:	Quarterly Financial and Common Stock Information (Unaudited)	175
Reports of Independent Registered Public Accounting Firm (PCAOB ID 238)		178
CMS Energy		178
Consumers		182

87

CMS Energy Corporation

Consolidated Statements of Income

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			2019
Operating Revenue		$	7,329		$	6,418		$	6,624
Operating Expenses
Fuel for electric generation		593			375			493
Purchased and interchange power		1,665			1,492			1,496
Purchased power – related parties		77			64			75
Cost of gas sold		735			577			769
Maintenance and other operating expenses		1,610			1,280			1,356
Depreciation and amortization		1,114			1,043			989
General taxes		389			357			331
Total operating expenses		6,183			5,188			5,509
Operating Income		1,146			1,230			1,115
Other Income (Expense)
Interest income		3			4			7
Interest income – related parties		—			7			—
Allowance for equity funds used during construction		8			6			10
Income from equity method investees		10			5			10
Non-operating retirement benefits, net		165			118			91
Other income		9			6			4
Other expense		(18)			(62)			(13)
Total other income		177			84			109
Interest Charges
Interest on long-term debt		481			483			439
Interest expense – related parties		12			12			9
Other interest expense		10			12			16
Allowance for borrowed funds used during construction		(3)			(2)			(4)
Total interest charges		500			505			460
Income Before Income Taxes		823			809			764
Income Tax Expense		95			115			131
Income From Continuing Operations		728			694			633
Income From Discontinued Operations, Net of Tax of $170, $18, and $16		602			58			49
Net Income		1,330			752			682
Income (Loss) Attributable to Noncontrolling Interests		(23)			(3)			2
Net Income Attributable to CMS Energy		1,353			755			680
Preferred Stock Dividends		5			—			—
Net Income Available to Common Stockholders		$	1,348		$	755		$	680

88

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			2019
Basic Earnings Per Average Common Share
Income from continuing operations per average common share available to common stockholders		$	2.58		$	2.45		$	2.23
Income from discontinued operations per average common share available to common stockholders		2.08			0.20			0.17
Basic earnings per average common share		$	4.66		$	2.65		2.40
Diluted Earnings Per Average Common Share
Income from continuing operations per average common share available to common stockholders		$	2.58		$	2.44		2.22
Income from discontinued operations per average common share available to common stockholders		2.08			0.20			0.17
Diluted earnings per average common share		$	4.66		$	2.64		2.39

The accompanying notes are an integral part of these statements.

89

CMS Energy Corporation

Consolidated Statements of Comprehensive Income

In Millions
Years Ended December 31	2021			2020			2019
Net Income		$	1,330		$	752		$	682
Retirement Benefits Liability
Net gain (loss) arising during the period, net of tax of $6, $(4), and $(3)		19			(15)			(7)
Settlement arising during the period, net of tax of $— for all periods		1			1			—
Prior service credit adjustment, net of tax of $— for all periods		—			(1)			—
Amortization of net actuarial loss, net of tax of $2, $1, and $1		5			5			3
Amortization of prior service credit, net of tax of $— for all periods		(1)			(1)			(2)
Derivatives
Unrealized gain (loss) on derivative instruments, net of tax of $—, $(2), and $(1)		2			(4)			(3)
Reclassification adjustments included in net income, net of tax of $1, $—, and $—		1			2			1
Other Comprehensive Income (Loss)		27			(13)			(8)
Comprehensive Income		1,357			739			674
Comprehensive Income (Loss) Attributable to Noncontrolling Interests		(23)			(3)			2
Comprehensive Income Attributable to CMS Energy		$	1,380		$	742		$	672

The accompanying notes are an integral part of these statements.

90

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91

CMS Energy Corporation

Consolidated Statements of Cash Flows

In Millions
Years Ended December 31	2021			2020			2019
Cash Flows from Operating Activities
Net income		$	1,330		$	752		$	682
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,114			1,043			989
Deferred income taxes and investment tax credits		249			170			150
Bad debt expense		22			30			30
Postretirement benefits contributions		(12)			(712)			(10)
Gain from sale of EnerBank		(657)			—			—
Other non‑cash operating activities and reconciling adjustments		(70)			(15)			(55)
Net cash provided by (used in) discontinued operations		(111)			33			39
Changes in assets and liabilities
Accounts receivable and accrued revenue		(103)			(5)			48
Inventories		(93)			28			44
Accounts payable and accrued rate refunds		153			56			(71)
Other current assets and liabilities		13			(68)			(93)
Other non‑current assets and liabilities		(16)			(36)			37
Net cash provided by operating activities		1,819			1,276			1,790
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)		(2,076)			(2,311)			(2,097)
Net proceeds from sale of EnerBank		898			—			—
Proceeds from sale of transmission equipment		—			58			97
Net cash provided by (used in) discontinued operations		78			(485)			(689)
Cost to retire property and other investing activities		(133)			(129)			(127)
Net cash used in investing activities		(1,233)			(2,867)			(2,816)
Cash Flows from Financing Activities
Proceeds from issuance of debt		335			3,179			2,151
Retirement of debt		(235)			(2,010)			(1,285)
Decrease in notes payable		—			(90)			(7)
Issuance of common stock, net of issuance costs		26			253			12
Issuance of preferred stock, net of issuance costs		224			—			—
Payment of dividends on common and preferred stock		(509)			(467)			(436)
Debt prepayment costs		—			(59)			(8)
Proceeds from the sale of membership interest in VIE to tax equity investor		—			417			—
Contribution from noncontrolling interest		1			31			—
Net cash provided by (used in) discontinued operations		(84)			416			631
Other financing costs		(53)			(51)			(50)
Net cash provided by (used in) financing activities		(295)			1,619			1,008
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts		291			28			(18)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period		185			157			175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period		$	476		$	185		$	157

92

In Millions
Years Ended December 31	2021			2020			2019
Other Cash Flow Activities and Non‑cash Investing and Financing Activities
Cash transactions
Interest paid (net of amounts capitalized)		$	489		$	549		$	498
Income taxes paid (refunds received), net		16			(58)			(58)
Non‑cash transactions
Capital expenditures not paid		$	196		$	141		$	170

The accompanying notes are an integral part of these statements.

93

CMS Energy Corporation

Consolidated Balance Sheets

ASSETS
In Millions
December 31	2021			2020
Current Assets
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Accounts receivable and accrued revenue, less allowance of $20 in 2021 and $29 in 2020		931			853
Accounts receivable – related parties		12			19
Inventories at average cost
Gas in underground storage		462			353
Materials and supplies		168			155
Generating plant fuel stock		37			68
Deferred property taxes		356			332
Regulatory assets		46			42
Assets held for sale		19			429
Prepayments and other current assets		120			104
Total current assets		2,627			2,404
Plant, Property, and Equipment
Plant, property, and equipment, gross		29,893			27,870
Less accumulated depreciation and amortization		8,502			7,938
Plant, property, and equipment, net		21,391			19,932
Construction work in progress		961			1,085
Total plant, property, and equipment		22,352			21,017
Other Non‑current Assets
Regulatory assets		2,259			2,653
Accounts receivable		30			19
Investments		71			70
Assets held for sale		—			2,680
Other		1,414			823
Total other non‑current assets		3,774			6,245
Total Assets		$	28,753		$	29,666

94

LIABILITIES AND EQUITY
In Millions
December 31	2021			2020
Current Liabilities
Current portion of long-term debt, finance leases, and other financing		$	382		$	591
Accounts payable		875			661
Accounts payable – related parties		11			7
Accrued rate refunds		12			20
Accrued interest		107			104
Accrued taxes		515			454
Regulatory liabilities		146			151
Liabilities held for sale		—			953
Other current liabilities		156			133
Total current liabilities		2,204			3,074
Non‑current Liabilities
Long-term debt		12,046			11,744
Non-current portion of finance leases and other financing		46			56
Regulatory liabilities		3,802			3,744
Postretirement benefits		142			152
Asset retirement obligations		628			553
Deferred investment tax credit		112			115
Deferred income taxes		2,210			1,863
Liabilities held for sale		—			1,894
Other non‑current liabilities		375			394
Total non‑current liabilities		19,361			20,515
Commitments and Contingencies (Notes 2, 3, and 20)
Equity
Common stockholders’ equity
Common stock, authorized 350.0 shares; outstanding 289.8 shares in 2021 and 288.9 shares in 2020		3			3
Other paid-in capital		5,406			5,365
Accumulated other comprehensive loss		(59)			(86)
Retained earnings		1,057			214
Total common stockholders’ equity		6,407			5,496
Cumulative preferred stock, Series C, authorized 9.2 depositary shares in 2021; outstanding 9.2 depositary shares in 2021		224			—
Total stockholders’ equity		6,631			5,496
Noncontrolling interests		557			581
Total equity		7,188			6,077
Total Liabilities and Equity		$	28,753		$	29,666

The accompanying notes are an integral part of these statements.

95

CMS Energy Corporation

Consolidated Statements of Changes in Equity

In Millions, Except Number of Shares in Thousands and Per Share Amounts
	Number of Shares
Years Ended December 31	2021	2020	2019	2021			2020			2019
Total Equity at Beginning of Period					$	6,077		$	5,055		$	4,792
Common Stock
At beginning and end of period					3			3			3
Other Paid-in Capital
At beginning of period	288,940	283,864	283,374		5,365			5,113			5,088
Common stock issued	997	5,609	710		50			265			35
Common stock repurchased	(157)	(216)	(181)		(9)			(13)			(10)
Common stock reissued	—	12	8		—			1			—
Common stock reacquired	(22)	(329)	(47)		—			(1)			—
At end of period	289,758	288,940	283,864		5,406			5,365			5,113
Accumulated Other Comprehensive Loss
At beginning of period					(86)			(73)			(65)
Retirement benefits liability
At beginning of period					(80)			(69)			(63)
Net gain (loss) arising during the period					19			(15)			(7)
Settlement arising during the period					1			1			—
Prior service credit adjustment					—			(1)			—
Amortization of net actuarial loss					5			5			3
Amortization of prior service credit					(1)			(1)			(2)
At end of period					(56)			(80)			(69)
Derivative instruments
At beginning of period					(6)			(4)			(2)
Unrealized gain (loss) on derivative instruments					2			(4)			(3)
Reclassification adjustments included in net income					1			2			1
At end of period					(3)			(6)			(4)
At end of period					(59)			(86)			(73)
Retained Earnings (Accumulated Deficit)
At beginning of period					214			(25)			(271)
Cumulative effect of change in accounting principle					—			(51)			—
Net income attributable to CMS Energy					1,353			755			680
Dividends declared on common stock					(505)			(465)			(434)
Dividends declared on preferred stock					(5)			—			—
At end of period					1,057			214			(25)

96

In Millions, Except Number of Shares in Thousands and Per Share Amounts
	Number of Shares
Years Ended December 31	2021	2020	2019	2021			2020			2019
Cumulative Preferred Stock
At beginning of period					—			—			—
Preferred stock issued, net of issuance costs					224			—			—
At end of period					224			—			—
Noncontrolling Interests
At beginning of period					581			37			37
Impact of purchase and consolidation of VIE					—			101			—
Sale of membership interest in VIE to tax equity investor					—			417			—
Contribution from noncontrolling interest					1			31			—
Income (loss) attributable to noncontrolling interests					(23)			(3)			2
Distributions and other changes in noncontrolling interests					(2)			(2)			(2)
At end of period					557			581			37
Total Equity at End of Period					$	7,188		$	6,077		$	5,055
Dividends declared per common share					$	1.7400		$	1.6300		$	1.5300
Dividends declared per preferred stock Series C depositary share					$	0.5688		$	—		$	—

The accompanying notes are an integral part of these statements.

97

Consumers Energy Company

Consolidated Statements of Income

In Millions
Years Ended December 31	2021			2020			2019
Operating Revenue		$	7,021		$	6,189		$	6,376
Operating Expenses
Fuel for electric generation		463			286			375
Purchased and interchange power		1,599			1,454			1,470
Purchased power – related parties		77			64			75
Cost of gas sold		726			568			754
Maintenance and other operating expenses		1,531			1,224			1,275
Depreciation and amortization		1,077			1,023			975
General taxes		373			349			322
Total operating expenses		5,846			4,968			5,246
Operating Income		1,175			1,221			1,130
Other Income (Expense)
Interest income		2			3			5
Interest and dividend income – related parties		5			5			5
Allowance for equity funds used during construction		8			6			10
Non-operating retirement benefits, net		155			112			85
Other income		8			5			3
Other expense		(18)			(43)			(13)
Total other income		160			88			95
Interest Charges
Interest on long-term debt		294			299			277
Interest expense – related parties		12			12			9
Other interest expense		8			11			15
Allowance for borrowed funds used during construction		(3)			(2)			(4)
Total interest charges		311			320			297
Income Before Income Taxes		1,024			989			928
Income Tax Expense		156			173			185
Net Income		868			816			743
Preferred Stock Dividends		2			2			2
Net Income Available to Common Stockholder		$	866		$	814		$	741

The accompanying notes are an integral part of these statements.

98

Consumers Energy Company

Consolidated Statements of Comprehensive Income

In Millions
Years Ended December 31	2021			2020			2019
Net Income		$	868		$	816		$	743
Retirement Benefits Liability
Net gain (loss) arising during the period, net of tax of $1, $(3), and $(3)		2			(9)			(8)
Amortization of net actuarial loss, net of tax of $1, $1, and $—		2			1			1
Other Comprehensive Income (Loss)		4			(8)			(7)
Comprehensive Income		$	872		$	808		$	736

The accompanying notes are an integral part of these statements.

99

Consumers Energy Company

Consolidated Statements of Cash Flows

In Millions
Years Ended December 31	2021			2020			2019
Cash Flows from Operating Activities
Net income		$	868		$	816		$	743
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		1,077			1,023			975
Deferred income taxes and investment tax credits		154			177			37
Bad debt expense		22			33			29
Postretirement benefits contributions		(9)			(690)			(7)
Other non‑cash operating activities and reconciling adjustments		(64)			(30)			(32)
Changes in assets and liabilities
Accounts and notes receivable and accrued revenue		(103)			(46)			8
Inventories		(90)			26			40
Accounts payable and accrued rate refunds		140			45			(63)
Other current assets and liabilities		27			(78)			(136)
Other non-current assets and liabilities		(40)			(58)			7
Net cash provided by operating activities		1,982			1,218			1,601
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)		(2,052)			(2,170)			(2,085)
DB SERP investment in note receivable – related party		—			(5)			—
Proceeds from sale of transmission equipment		—			58			77
Cost to retire property and other investing activities		(133)			(129)			(129)
Net cash used in investing activities		(2,185)			(2,246)			(2,137)
Cash Flows from Financing Activities
Proceeds from issuance of debt		335			1,954			993
Retirement of debt		(27)			(1,086)			(541)
Decrease in notes payable		—			(90)			(7)
Increase in notes payable – related parties		85			307			—
Stockholder contribution		575			650			675
Payment of dividends on common and preferred stock		(724)			(639)			(594)
Debt prepayment costs		—			(43)			(8)
Other financing costs		(32)			(18)			(10)
Net cash provided by financing activities		212			1,035			508
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts		9			7			(28)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period		35			28			56
Cash and Cash Equivalents, Including Restricted Amounts, End of Period		$	44		$	35		$	28

100

In Millions
Years Ended December 31	2021			2020			2019
Other Cash Flow Activities and Non‑cash Investing and Financing Activities
Cash transactions
Interest paid (net of amounts capitalized)		$	298		$	305		$	279
Income taxes paid (refunds received), net		(10)			51			132
Non‑cash transactions
Capital expenditures not paid		$	192		$	130		$	160

The accompanying notes are an integral part of these statements.

101

Consumers Energy Company

Consolidated Balance Sheets

ASSETS
In Millions
December 31	2021			2020
Current Assets
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Accounts receivable and accrued revenue, less allowance of $20 in 2021 and $29 in 2020		905			828
Assets held for sale		19			—
Accounts and notes receivable – related parties		9			18
Inventories at average cost
Gas in underground storage		462			353
Materials and supplies		163			149
Generating plant fuel stock		33			67
Deferred property taxes		356			332
Regulatory assets		46			42
Prepayments and other current assets		84			68
Total current assets		2,121			1,892
Plant, Property, and Equipment
Plant, property, and equipment, gross		28,771			26,757
Less accumulated depreciation and amortization		8,371			7,844
Plant, property, and equipment, net		20,400			18,913
Construction work in progress		915			1,058
Total plant, property, and equipment		21,315			19,971
Other Non-current Assets
Regulatory assets		2,259			2,653
Accounts receivable		36			25
Accounts and notes receivable – related parties		102			105
Other		1,307			753
Total other non-current assets		3,704			3,536
Total Assets		$	27,140		$	25,399

102

LIABILITIES AND EQUITY
In Millions
December 31	2021			2020
Current Liabilities
Current portion of long-term debt, finance leases, and other financing		$	374		$	384
Notes payable – related parties		392			307
Accounts payable		835			636
Accounts payable – related parties		16			7
Accrued rate refunds		12			20
Accrued interest		75			72
Accrued taxes		529			458
Regulatory liabilities		146			151
Other current liabilities		109			104
Total current liabilities		2,488			2,139
Non-current Liabilities
Long-term debt		8,050			7,742
Non-current portion of finance leases and other financing		46			56
Regulatory liabilities		3,802			3,744
Postretirement benefits		104			112
Asset retirement obligations		605			530
Deferred investment tax credit		112			115
Deferred income taxes		2,340			2,094
Other non-current liabilities		314			311
Total non-current liabilities		15,373			14,704
Commitments and Contingencies (Notes 2 and 3)
Equity
Common stockholder’s equity
Common stock, authorized 125.0 shares; outstanding 84.1 shares in both periods		841			841
Other paid-in capital		6,599			6,024
Accumulated other comprehensive loss		(32)			(36)
Retained earnings		1,834			1,690
Total common stockholder’s equity		9,242			8,519
Cumulative preferred stock, $4.50 series, authorized 7.5 shares; outstanding 0.4 shares in both periods		37			37
Total equity		9,279			8,556
Total Liabilities and Equity		$	27,140		$	25,399

The accompanying notes are an integral part of these statements.

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Consumers Energy Company

Consolidated Statements of Changes in Equity

In Millions
Years Ended December 31	2021			2020			2019
Total Equity at Beginning of Period		$	8,556		$	7,737		$	6,920
Common Stock
At beginning and end of period		841			841			841
Other Paid-in Capital
At beginning of period		6,024			5,374			4,699
Stockholder contribution		575			650			675
At end of period		6,599			6,024			5,374
Accumulated Other Comprehensive Loss
At beginning of period		(36)			(28)			(21)
Retirement benefits liability
At beginning of period		(36)			(28)			(21)
Net gain (loss) arising during the period		2			(9)			(8)
Amortization of net actuarial loss		2			1			1
At end of period		(32)			(36)			(28)
At end of period		(32)			(36)			(28)
Retained Earnings
At beginning of period		1,690			1,513			1,364
Net income		868			816			743
Dividends declared on common stock		(722)			(637)			(592)
Dividends declared on preferred stock		(2)			(2)			(2)
At end of period		1,834			1,690			1,513
Cumulative Preferred Stock
At beginning and end of period		37			37			37
Total Equity at End of Period		$	9,279		$	8,556		$	7,737

The accompanying notes are an integral part of these statements.

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CMS Energy Corporation

Consumers Energy Company

Notes to the Consolidated Financial Statements

1:    Significant Accounting Policies

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, CMS Enterprises, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

•they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas)

•they qualify for the normal purchases and sales exception

•they cannot be net settled due in part to the absence of an active market for the commodity

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Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives.

Additionally, CMS Energy uses interest rate swaps to manage its interest rate risk on certain long-term debt transactions.

CMS Energy and Consumers record derivative contracts that do not qualify for the normal purchases and sales exception at fair value on their consolidated balance sheets. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

EPS: CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted EPS, includes the effects of nonvested stock awards and forward equity sales. CMS Energy computes the effect on potential common stock using the treasury stock method. Diluted EPS excludes the impact of antidilutive securities, which are those securities resulting in an increase in EPS or a decrease in loss per share. For EPS computations, see Note 13, Earnings Per Share—CMS Energy.

Impairment of Long-Lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

CMS Energy also assesses equity method investments for impairment whenever there has been a decline in value that is other than temporary. This assessment requires CMS Energy to determine the fair value of the equity method investment. CMS Energy determines fair value using valuation methodologies, including discounted cash flows, and assesses the ability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment. CMS Energy records an impairment if the fair value is less than the carrying amount and the decline in value is considered to be other than temporary.

Investment Tax Credits: Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment. CMS Energy’s non‑regulated businesses use the deferral method of accounting for investment tax credits. Under the deferral method, the book basis of the associated assets is reduced by the amount of the credit, resulting in lower depreciation expense over the life of the assets. Furthermore, the tax basis of the assets is reduced by 50 percent of the related credit, resulting in a net deferred tax asset. CMS Energy recognizes the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.

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Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and emission allowances are used to satisfy compliance obligations related to the generation of power. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions: MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

Property Taxes: Property taxes are based on the taxable value of Consumers’ real and personal property assessed by local taxing authorities. Consumers records property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Reclassifications: CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the present period. The most significant of these reclassifications is related to CMS Energy’s sale of EnerBank to Regions Bank in October 2021. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. Additionally, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Renewable Energy Grant: In 2013, Consumers received a renewable energy cash grant for Lake Winds® Energy Park under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Upon receipt of the grant, Consumers recorded a regulatory liability, which Consumers is amortizing over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income. Consumers recorded the deferred income taxes related to the grant as a reduction of the book basis of Lake Winds® Energy Park.

Other: For additional accounting policies, see:

•Note 7, Plant, Property, and Equipment

•Note 8, Leases and Palisades Financing

•Note 9, Asset Retirement Obligations

•Note 10, Retirement Benefits

•Note 12, Income Taxes

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•Note 13, Earnings Per Share—CMS Energy

•Note 14, Revenue

•Note 16, Cash and Cash Equivalents

•Note 19, Variable Interest Entities

2:    Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost recovery from customers, the MPSC’s authority to approve voluntary revenue refunds, and other matters. Consumers is unable to predict the outcome of these appeals.

Regulatory Assets and Liabilities

Consumers is subject to the actions of the MPSC and FERC and therefore prepares its consolidated financial statements in accordance with the provisions of regulatory accounting. A utility must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, Consumers records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by non‑regulated businesses.

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Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31	End of Recovery or Refund Period		2021			2020
Regulatory assets
Current
Energy waste reduction plan incentive1		2022		$	42		$	34
Deferred capital spending2		2021		—			6
Other		2022		4			2
Total current regulatory assets				$	46		$	42
Non-current
Postretirement benefits3		various		$	837		$	1,231
Costs of coal-fueled electric generating units to be retired2		various		678			678
ARO4		various		247			216
Securitized costs2		2029		193			221
MGP sites4		various		112			120
Unamortized loss on reacquired debt4		various		104			108
Energy waste reduction plan incentive1		2023		46			42
Energy waste reduction plan4		various		13			16
Demand response program4		various		10			10
Other		various		19			11
Total non-current regulatory assets				$	2,259		$	2,653
Total regulatory assets				$	2,305		$	2,695
Regulatory liabilities
Current
Income taxes, net		2022		$	138		$	105
Reserve for customer refunds		2022		2			28
Voluntary transmission asset sale gain share		2021		—			14
Other		2022		6			4
Total current regulatory liabilities				$	146		$	151
Non-current
Cost of removal		various		$	2,375		$	2,245
Income taxes, net		various		1,297			1,419
Postretirement benefits		various		54			—
Renewable energy grant		2043		47			49
Renewable energy plan		2028		13			9
ARO		various		—			11
Other		various		16			11
Total non-current regulatory liabilities				$	3,802		$	3,744
Total regulatory liabilities				$	3,948		$	3,895

1These regulatory assets have arisen from an alternative revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2The MPSC has provided, or Consumers expects, a specific return on these regulatory assets.

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3This regulatory asset is included in rate base, thereby providing a return.

4These regulatory assets represent incurred costs for which the MPSC has provided, or Consumers expects, recovery without a return on investment.

Regulatory Assets

Energy Waste Reduction Plan Incentive: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

In October 2021, the MPSC approved a settlement agreement authorizing Consumers to collect $42 million during 2022 as an incentive for exceeding its statutory savings targets in 2020. Consumers recognized incentive revenue under this program of $42 million in 2020.

Consumers also exceeded its statutory savings targets in 2021, achieved certain other goals, and will request the MPSC’s approval to collect $46 million, the maximum performance incentive, in the energy waste reduction reconciliation to be filed in May 2022. Consumers recognized incentive revenue under this program of $46 million in 2021.

Deferred Capital Spending: In 2019, the MPSC approved a settlement agreement in Consumers’ 2018 electric rate case, which provided deferred accounting treatment for distribution-related capital investments exceeding certain threshold amounts. Thus, for actual capital spending above the threshold amounts detailed in the settlement agreement, Consumers had deferred as a regulatory asset the associated depreciation and property tax expense as well as the debt component of the overall rate of return on such spending.

Postretirement Benefits: As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits. Accordingly, Consumers defers the net impact of actuarial losses and gains, prior service costs and credits, and settlements associated with postretirement benefits as a regulatory asset or liability. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. For details about settlements and the amortization periods, see Note 10, Retirement Benefits.

Costs of Coal-fueled Electric Generating Units to be Retired: In 2019, the MPSC approved the settlement agreement reached in Consumers’ 2018 IRP, under which Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. Under Michigan law, electric utilities have been permitted to use highly rated, low-cost securitization bonds to finance the recovery of qualified costs. In 2019, Consumers removed from total plant, property, and equipment an amount representing the projected remaining book value of the two coal-fueled electric generating units upon their retirement, and recorded it as a regulatory asset. Until securitization, the book value of the generating units will remain in rate base and receive full regulatory returns in general rate cases.

In December 2020, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of the two coal-fueled electric generating units upon their retirement. An intervenor appealed the order, contending that it should not have to pay the securitization surcharge. In November 2021, the Michigan Court of Appeals affirmed the MPSC’s determination that the intervenor must pay the securitization charge.

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ARO: The recovery of the underlying asset investments and related removal and monitoring costs of recorded AROs is approved by the MPSC in depreciation rate cases. Consumers records a regulatory asset and a regulatory liability for timing differences between the recognition of AROs for financial reporting purposes and the recovery of these costs from customers. The recovery period approximates the useful life of the assets to be removed.

Securitized Costs: In 2013, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of seven smaller coal-fueled electric generating units that Consumers retired in 2016 and three smaller natural gas-fueled electric generating units that Consumers retired in 2015. Upon receipt of the MPSC’s order, Consumers removed the book value of the ten units from plant, property, and equipment and recorded this amount as a regulatory asset. Consumers is amortizing the regulatory asset over the life of the related securitization bonds, which it issued through a subsidiary in 2014. For additional details regarding the securitization bonds, see Note 4, Financings and Capitalization.

MGP Sites: Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities. The MPSC allows Consumers to recover from its natural gas customers over a ten-year period the costs incurred to remediate the MGP sites.

Unamortized Loss on Reacquired Debt: Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is capitalized and amortized over the life of the new debt.

Energy Waste Reduction Plan: The MPSC allows Consumers to collect surcharges from customers to fund its energy waste reduction plan. The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period. The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Demand Response Program: In Consumers’ 2018 IRP and general rate cases, the MPSC has approved the recovery of demand response costs. Consumers annually files a reconciliation with the MPSC to review actual demand response costs against amounts approved.

Regulatory Liabilities

Income Taxes, Net: Consumers records regulatory assets and liabilities to reflect the difference between deferred income taxes recognized for financial reporting purposes and amounts previously reflected in Consumers’ rates. This net balance will decrease over the remaining life of the related temporary differences and flow through income tax expense. The majority of the net regulatory liability recorded related to income taxes is associated with plant assets that are subject to normalization, which is governed by the Internal Revenue Code, and will be returned to customers over the remaining book life of the related plant assets, the average of which is 44 years for gas plant assets and 27 years for electric plant assets. For additional details on deferred income taxes, see Note 12, Income Taxes.

Reserve for Customer Refunds: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. In May 2021, the MPSC approved a filing submitted by Consumers that proposed the refund take the form of incremental spending in 2021 and 2022 above amounts included in rates on various programs, including electric service restoration and gas and electric technology expenses. If Consumers does not achieve the incremental spending, the remaining balance will be provided to electric or gas utility customers through a bill credit.

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Voluntary Transmission Asset Sale Gain Share: In October 2020, Consumers completed a sale of the electric utility’s remaining transmission equipment to METC. In December 2020, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with electric utility customers through incremental service restoration spending in 2021; this application was approved by the MPSC in February 2021. As a result, the $14 million gain was recorded on Consumers’ consolidated balance sheets as a current regulatory liability at December 31, 2020 and was shared with customers in 2021.

Cost of Removal: The MPSC allows Consumers to collect amounts from customers to fund future asset removal activities. This regulatory liability is reduced as costs of removal are incurred. The refund period of this regulatory liability approximates the useful life of the assets to be removed.

Renewable Energy Grant: In 2013, Consumers received a $69 million renewable energy grant for Lake Winds® Energy Park, which began operations in 2012. This grant reduces Consumers’ cost of complying with Michigan’s renewable portfolio standard and, accordingly, reduces the overall renewable energy surcharge to be collected from customers. The regulatory liability recorded for the grant will be amortized over the life of Lake Winds® Energy Park.

Renewable Energy Plan: Consumers has collected surcharges to fund its renewable energy plan. Amounts not yet spent under the plan are recorded as a regulatory liability, which is amortized as incremental costs are incurred to operate and depreciate Consumers’ renewable generation facilities and to purchase RECs under renewable energy purchase agreements. Incremental costs represent costs incurred in excess of amounts recovered through the PSCR process.

Consumers Electric Utility

2021 Electric Rate Case: In March 2021, Consumers filed an application with the MPSC seeking an annual rate increase of $225 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending December 31, 2022. In July 2021, Consumers reduced its requested annual rate increase to $201 million. In December 2021, the MPSC approved an annual rate increase of $27 million, based on a 9.9 percent authorized return on equity. This increase reflects the net impact of the approved settlement agreement in Consumers’ electric depreciation rate case, which reduced annual depreciation expense by $27 million.

In its final order, the MPSC disallowed cost recovery for fleet assets and certain other categories of recently completed capital expenditures incurred by Consumers. As a result of this disallowance, Consumers recorded an impairment charge of $41 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. This charge includes an assessment of probable loss of $11 million on similar categories of gas utility capital expenditures that are pending recovery in Consumers’ 2021 gas rate case. Though Consumers plans to pursue full recovery of certain of these electric and gas capital expenditures, the position taken by the MPSC in this electric rate case provides significant uncertainty around whether Consumers will ultimately succeed.

In January 2022, Consumers filed a petition for rehearing requesting the MPSC reconsider its disallowance of $11 million in capital expenditures for which the MPSC had already approved recovery in a previous electric rate order; this amount was not included in the impairment charge based on Consumers’ assessment of the merits of the petition for rehearing. The order disallowed recovery of other categories of capital expenditures, requiring that Consumers provide additional cost/benefit analysis and other information in its next electric rate case to support cost recovery. Consumers has incurred approximately $23 million related to these programs as of December 31, 2021 and, for certain ongoing projects, expects to incur additional capital expenditures in 2022 and beyond. While Consumers intends to

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support fully the prudency of such capital expenditures, it is reasonably possible that the MPSC will disallow some or all of these capital expenditures. An additional material disallowance of incurred capital costs could negatively affect CMS Energy’s and Consumers’ future results of operations. Consumers cannot predict the outcome of these proceedings.

Finally, the order disallowed various other categories of capital expenditures in the projected test year, primarily challenging the accuracy of Consumers’ projection of these expenditures through 2022. While these are presently excluded from rate base, Consumers believes it will be successful in recovering the actual capital expenditures incurred for these programs in future rate cases.

As a result of the order, in December 2021, Consumers committed to a plan to sell fleet assets with a fair value of $15 million. To reflect these held-for-sale assets at their fair value, less expected selling costs, Consumers recorded an additional impairment charge of $4 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021.

Power Supply Cost Recovery and Gas Cost Recovery

The PSCR and GCR ratemaking processes are designed to allow Consumers to recover all of its power supply and purchased natural gas costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its PSCR and GCR billing charges monthly in order to minimize the underrecovery or overrecovery amount in the annual reconciliations. Underrecoveries represent probable future revenues that will be recovered from customers; overrecoveries represent previously collected revenues that will be refunded to customers.

Presented in the following table are the assets and liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
Assets
GCR underrecoveries		$	25		$	—
Accounts receivable and accrued revenue		$	25		$	—
Liabilities
PSCR overrecoveries		$	12		$	5
GCR overrecoveries		—			15
Accrued rate refunds		$	12		$	20

PSCR Plans and Reconciliations: In October 2021, the MPSC issued an order in Consumers’ 2019 PSCR reconciliation, authorizing recovery of $1.9 billion of power costs and authorizing Consumers to reflect in its 2020 PSCR reconciliation the overrecovery of $18 million.

In April 2021, the MPSC issued an order in Consumers’ 2020 PSCR plan authorizing the 2020 PSCR charge that Consumers self-implemented beginning in January 2020. In March 2021, Consumers filed its 2020 PSCR reconciliation, requesting full recovery of $1.8 billion of power costs and authorization to reflect in its 2021 PSCR reconciliation the underrecovery of $4 million.

In January 2022, the MPSC issued an order in Consumers’ amended 2021 PSCR plan authorizing the 2021 PSCR charge that Consumers self-implemented beginning in January 2021.

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GCR Plans and Reconciliations: In May 2021, the MPSC approved a settlement agreement in Consumers’ 2019-2020 GCR reconciliation, authorizing recovery of $0.5 billion of gas costs and authorizing Consumers to reflect in its 2020-2021 GCR reconciliation the overrecovery of $6 million.

In June 2021, Consumers filed its 2020-2021 GCR reconciliation, requesting full recovery of $0.4 billion of gas costs and authorization to reflect in its 2021-2022 GCR reconciliation the overrecovery of $1 million.

Consumers submitted its 2021-2022 GCR plan to the MPSC in December 2020 and self-implemented its proposed 2021-2022 GCR charge in April 2021. The MPSC approved a settlement agreement in this proceeding in September 2021, authorizing the GCR charge that Consumers had self-implemented.

3:    Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities. Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made. Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Bay Harbor: CMS Land retained environmental remediation obligations for the collection and treatment of leachate at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and EGLE finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit, which was renewed in January 2022 and is valid through 2025.

At December 31, 2021, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $57 million. CMS Energy expects to pay the following amounts for long-term leachate disposal and operating and maintenance costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy
Long-term leachate disposal and operating and maintenance costs		$	4		$	4		$	4		$	4		$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

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Equatorial Guinea Tax Claim: In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea. The government of Equatorial Guinea claims that, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating with CMS Energy. CMS Energy has concluded that the government’s tax claim is without merit and believes the likelihood of material loss to be remote, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $2 million and $4 million. At December 31, 2021, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA. CERCLA liability is joint and several. In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site. The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. In 2011, Consumers received a follow-up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River. All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million. Various factors, including the number and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At December 31, 2021, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability, as no amount in the range was considered a better estimate than any other amount.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB: In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed part of the PCB material and replaced it with non‑PCB material. Consumers has had several communications with the EPA regarding this matter, but cannot predict the financial impact or outcome.

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MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. In 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with a claim against Consumers that was related to the Clean Air Act. In November 2020, the MCV Partnership and Consumers signed a settlement agreement resolving all remaining disputes between the parties, and filed the settlement and associated agreements with the MPSC for approval. In March 2021, the MPSC approved the settlement and associated agreements.

Consumers Gas Utility Contingencies

Gas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At December 31, 2021, Consumers had a recorded liability of $57 million for its remaining obligations for these sites. This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent. The undiscounted amount of the remaining obligation is $61 million. Consumers expects to pay the following amounts for remediation and other response activity costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
Consumers
Remediation and other response activity costs		$	3		$	9		$	24		$	11		$	1

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period. At December 31, 2021, Consumers had a regulatory asset of $112 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million. At December 31, 2021, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of

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the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages.

In September 2020, the MPSC disallowed the recovery of $7 million in incremental gas purchases related to the fire. In January 2021, the MPSC denied Consumers’ petition for a rehearing challenging this disallowance. In February 2021, Consumers filed an appeal of the MPSC’s denial with the Michigan Court of Appeals. Consumers could also be subject to disallowances of costs associated with the repair and modification of the Ray Compressor Station. At December 31, 2021, Consumers had incurred capital expenditures of $17 million to restore and modify the compressor station.

As of December 31, 2021, Consumers had recorded an insurance recovery of $13 million related to the compressor station. During 2021, Consumers recognized $6 million of the insurance recovery as a reduction to plant, property, and equipment, $3 million as a reduction of maintenance and other operating expenses, and $4 million as operating revenue, which represented recovery of incremental gas purchases related to the fire.

At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on CMS Energy’s and Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2021:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from purchase of VIE1	September 2020	indefinite		$	314		$	—
Indemnity obligations from stock and asset sale agreements2	various	indefinite		225			4
Guarantee3	July 2011	indefinite		30			—
Consumers
Guarantee3	July 2011	indefinite		$	30		$	—

1In conjunction with the purchase of its interest in Aviator Wind Equity Holdings, CMS Enterprises assumed certain indemnity obligations that protect the associated tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest in Aviator Wind. CMS Enterprises would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on CMS Enterprises’ ownership interest in Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

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2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes and breaches of representations and warranties. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note and an indemnity provided in connection with the sale of EnerBank to Regions Bank. For further details on the sale, see Note 20, Exit Activities and Discontinued Operations. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

3This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. At December 31, 2021, the carrying value of these indemnity obligations was $1 million. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

In addition to the matters disclosed in this Note, Note 2, Regulatory Matters, and Note 20, Exit Activities and Discontinued Operations, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Contractual Commitments

Purchase Obligations: Purchase obligations arise from long-term contracts for the purchase of commodities and related services, plant purchase commitments, and construction and service agreements. The commodities and related services include long-term PPAs, natural gas and associated transportation, and coal and associated transportation. Related-party PPAs are between Consumers and certain affiliates

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of CMS Enterprises. Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2021 for each of the periods shown:

In Millions
	Payments Due
	Total			2022			2023			2024			2025			2026			Beyond 2026
CMS Energy, including Consumers
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		4,445			1,489			1,657			412			639			36			212
Total purchase obligations		$	12,473		$	2,317		$	2,404		$	1,174		$	1,348		$	642		$	4,588
Consumers
PPAs
MCV PPA		$	2,204		$	349		$	348		$	346		$	306		$	231		$	624
Palisades PPA		116			116			—			—			—			—			—
Related-party PPAs		342			65			65			65			47			29			71
Other PPAs		5,366			298			334			351			356			346			3,681
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		3,950			1,381			1,596			364			594			12			3
Total purchase obligations		$	11,978		$	2,209		$	2,343		$	1,126		$	1,303		$	618		$	4,379

MCV PPA: Consumers has a PPA with the MCV Partnership giving Consumers the right to purchase up to 1,240 MW of capacity and energy produced by the MCV Facility. The PPA was amended during 2020 and was approved by the MPSC in 2021. The amended and restated MCV PPA provides for:

•an extension of the termination date from March 2025 to May 2030

•a capacity charge of $10.14 per MWh of available capacity through March 2025 and $5.00 per MWh of available capacity from March 2025 through the termination date of the PPA

•a fixed energy charge of $6.30 per MWh for on-peak hours and $6.00 for off-peak hours

•a variable energy charge based on the MCV Partnership’s cost of production for energy delivered to Consumers

•a $5 million annual contribution by the MCV Partnership to a renewable resources program through March 2025

Capacity and energy charges under the MCV PPA were $348 million in 2021, $298 million in 2020, and $318 million in 2019.

Palisades PPA: Consumers has a PPA expiring in May 2022 with Entergy to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. For all delivered energy, the Palisades PPA has escalating capacity and variable energy charges. Total capacity and energy charges under the Palisades PPA were $413 million in 2021, $403 million in 2020, and $395 million in 2019. For further details about Palisades, see Note 8, Leases and Palisades Financing.

Other PPAs: Consumers has PPAs expiring through 2048 with various counterparties. The majority of the PPAs have capacity and energy charges for delivered energy. In addition, CMS Energy and Consumers account for several of their PPAs as leases. Capacity and energy charges under these PPAs were $338 million in 2021, $327 million in 2020, and $336 million in 2019. See Note 8, Leases and Palisades Financing for more information about CMS Energy’s and Consumers’ lease obligations.

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4:    Financings and Capitalization

Presented in the following table is CMS Energy’s long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity	2021			2020
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Term loan facility	variable		2021		—			200
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	4,185
Consumers					8,505			8,197
CMS Enterprises, including subsidiaries
Term loan facility	variable	4	2025		78			85
Total principal amount outstanding					$	12,568		$	12,467
Current amounts					(373)			(571)
Unamortized discounts					(31)			(33)
Unamortized issuance costs					(118)			(119)
Total long-term debt					$	12,046		$	11,744

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent.

4A subsidiary of CMS Enterprises issued non‑recourse debt to finance the acquisition of a wind generation project in Northwest Ohio. The interest rate for the debt is three-month LIBOR plus 1.500 percent through October 2022 and three-month LIBOR plus 1.750 percent thereafter. At December 31, 2021 and 2020, the interest rate was 1.724 percent and 1.754 percent, respectively. The same subsidiary of CMS Enterprises entered into interest rate swaps with the lending banks to fix the interest charges associated with the debt, at a rate of 4.702 percent through October 2022 and 4.952 percent thereafter. Principal and interest payments are made quarterly. For information about the interest rate swaps, see Note 5, Fair Value Measurements.

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Presented in the following table is Consumers’ long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity		2021			2020
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,197		$	7,897
Tax-exempt revenue bonds	0.875	2	2035			35			—
	1.800	3	2049			75			75
						$	110		$	75
Securitization bonds	3.290	4	2025-2029	5		198			225
Total principal amount outstanding						$	8,505		$	8,197
Current amounts						(365)			(364)
Unamortized discounts						(28)			(29)
Unamortized issuance costs						(62)			(62)
Total long-term debt						$	8,050		$	7,742

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor (zero percent at December 31, 2021) and (zero percent at December 31, 2020). The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2021.

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2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.290 percent at December 31, 2021 and 3.250 percent at December 31, 2020.

5Principal and interest payments are made semiannually.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2021:

	Principal (In Millions)			Interest Rate	Issuance Date	Maturity Date
Consumers
First mortgage bonds		$	300	2.650%	August 2021	August 2052
Tax-exempt revenue bonds1		35		0.875%	October 2021	April 2035

1    These bonds were repurchased, in lieu of redemption, in July 2020. In October 2021, the bonds were remarketed to the public and the interest rate on the bonds will reset in October 2026.

Presented in the following table is a summary of major long-term debt retirements during year ended December 31, 2021:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
CMS Energy, parent only
Term Loan facility		$	200	variable	October 2021	November 2021

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Its current authorization terminates on July 31, 2022. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In December 2021, Consumers filed an application for authority to issue securities between April 1, 2022 and March 31, 2024, replacing the current authorization.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

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Debt Maturities: At December 31, 2021, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	—		$	250		$	250		$	300
Consumers		365			654			332			31			32
CMS Enterprises, including subsidiaries		8			9			10			51			—
Total CMS Energy		$	373		$	663		$	592		$	332		$	332
Consumers
Long-term debt		$	365		$	654		$	332		$	31		$	32

Credit Facilities: The following credit facilities with banks were available at December 31, 2021:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20241		$	550		$	—		$	24		$	526
September 23, 20222		31			—			31			—
CMS Enterprises, including subsidiaries
September 25, 20253		$	39		$	—		$	39		$	—
September 30, 20254		18			—			8			10
Consumers5
June 5, 2024		$	850		$	—		$	12		$	838
November 19, 2023		250			—			8			242
April 18, 2022		30			—			30			—

1There were no borrowings under this facility during the year ended December 31, 2021.

2The maximum aggregate of letters of credit that may be issued under this facility is $50 million. The amount remaining under the facility is uncommitted.

3This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

4Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2021.

5Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2021.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers

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does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2021, there were no commercial paper notes outstanding under this program.

In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of one month LIBOR minus 0.100 percent. At December 31, 2021, outstanding borrowings under the agreement were $392 million bearing an interest rate of zero percent. In January 2022, Consumers repaid $392 million of its loan outstanding with CMS Energy.

Dividend Restrictions: At December 31, 2021, payment of dividends by CMS Energy on its common stock was limited to $6.4 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2021, Consumers had $1.8 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

During the year ended December 31, 2021, Consumers paid $722 million in dividends on its common stock to CMS Energy.

Capitalization: The authorized capital stock of CMS Energy consists of:

•350 million shares of CMS Energy Common Stock, par value $0.01 per share

•10 million shares of CMS Energy Preferred Stock, par value $0.01 per share

Issuance of Common Stock: In 2020, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock. Under the program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise.

CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2021:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			December 31, 2021
September 15, 2020	June 30, 2022	846,759		$	61.04		$	58.51
December 22, 2020	June 22, 2022	115,595		61.81			59.73

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded

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on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of December 31, 2021, CMS Energy would have been required to deliver 94,588 shares.

Issuance of Preferred Stock: In 2021, CMS Energy issued 9.2 million depositary shares, each representing a 1/1,000th interest in a share of its cumulative Series C preferred stock, traded on the New York Stock Exchange under the symbol CMS PRC, at a price of $25.00 per depositary share. The transaction resulted in net proceeds of $224 million, which was used for general corporate purposes. Dividends on the preferred stock accumulate at an annual rate of 4.200 percent and are payable quarterly.

The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at a price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus accumulated and unpaid dividends, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation.

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2021 and 2020:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

5:    Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

•Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

•Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
December 31	2021			2020			2021			2020
Assets1
Restricted cash equivalents		$	24		$	17		$	22		$	15
Nonqualified deferred compensation plan assets		27			23			21			18
Derivative instruments		2			1			2			1
Total assets		$	53		$	41		$	45		$	34
Liabilities1
Nonqualified deferred compensation plan liabilities		$	27		$	23		$	21		$	18
Derivative instruments		7			11			—			—
Total liabilities		$	34		$	34		21			$	18

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Restricted Cash Equivalents: Restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 16, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. CMS Energy’s and Consumers’ derivatives are classified as Level 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market-based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $78 million at December 31, 2021 and $85 million at December 31, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within interest on long-term debt on CMS Energy’s consolidated statements of income. CMS Energy recorded gains (losses) of $2 million in 2021, $(6) million in 2020, and $(4) million in 2019. There were no material impacts on

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interest on long-term debt associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $4 million at December 31, 2021 and $9 million at December 31, 2020. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the periods presented.

The majority of derivatives classified as Level 3 are FTRs held by Consumers. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Presented in the following table are Consumers’ assets, by level within the fair value hierarchy, reported at fair value on a nonrecurring basis during the year ended December 31, 2021:

In Millions
	Level 1			Level 2			Level 3			Gains (Losses)
Assets held for sale		$	—		$	15		$	—	$	(4)

In 2021, Consumers wrote down fleet assets held for sale from their carrying amount of $19 million to their fair value, less selling costs, of $15 million, resulting in an impairment charge of $4 million, which was recorded within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. The fair value was determined based on the market prices of similar fleet vehicles. For additional information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

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6:    Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value. The table excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	December 31, 2021															December 31, 2020
	Carrying Amount			Fair Value												Carrying Amount			Fair Value
				Total			Level												Total			Level
							1			2			3									1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Liabilities
Long-term debt2		12,419			13,800			1,189			10,656			1,955			12,315			14,601			1,249			11,267			2,085
Long-term payables3		31			32			—			—			32			33			35			—			—			35
Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Notes receivable – related party4		104			104			—			—			104			107			107			—			—			107
Liabilities
Long-term debt5		8,415			9,410			—			7,455			1,955			8,106			9,801			—			7,716			2,085

1Includes current portion of long-term accounts receivable of $9 million at December 31, 2021 and $12 million at December 31, 2020.

2Includes current portion of long-term debt of $373 million at December 31, 2021 and $571 million at December 31, 2020.

3Includes current portion of long-term payables of $23 million at December 31, 2021 and $6 million at December 31, 2020.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2021 and 2020.

5Includes current portion of long-term debt of $365 million at December 31, 2021 and $364 million at December 31, 2020.

The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

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7:    Plant, Property, and Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions
December 31	Estimated Depreciable Life in Years	2021			2020
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers	3 - 125		$	28,771		$	26,757
Enterprises
Independent power production1	2 - 40		1,121			1,112
Other	3 - 5		1			1
Plant, property, and equipment, gross			$	29,893		$	27,870
Construction work in progress			961			1,085
Accumulated depreciation and amortization			(8,502)			(7,938)
Total plant, property, and equipment2			$	22,352		$	21,017
Consumers
Plant, property, and equipment, gross
Electric
Generation	22 - 125		$	6,704		$	6,376
Distribution	20 - 75		9,815			9,130
Other	5 - 50		1,309			1,326
Assets under finance leases and other financing3			319			323
Gas
Distribution	20 - 85		6,338			5,702
Transmission	17 - 75		2,319			2,003
Underground storage facilities4	27 - 75		1,117			1,046
Other	5 - 50		814			817
Assets under finance leases3			13			13
Other non-utility property	3 - 51		23			21
Plant, property, and equipment, gross			$	28,771		$	26,757
Construction work in progress			915			1,058
Accumulated depreciation and amortization			(8,371)			(7,844)
Total plant, property, and equipment2			$	21,315		$	19,971

1A significant portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 8, Leases and Palisades Financing.

2Consumers’ plant additions were $2.4 billion for the year ended December 31, 2021 and $2.0 billion for the year ended December 31, 2020. Consumers’ plant retirements, which include the impact of disallowances and transfers to held for sale, were $361 million for the year ended December 31, 2021, and $220 million for the year ended December 31, 2020.

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3For information regarding the amortization terms of Consumers’ assets under finance leases and other financing, see Note 8, Leases and Palisades Financing.

4Underground storage includes base natural gas of $26 million at December 31, 2021 and 2020. Base natural gas is not subject to depreciation.

Intangible Assets: Included in net plant, property, and equipment are intangible assets. Presented in the following table are details about CMS Energy’s and Consumers’ intangible assets:

In Millions
Description	Amortization Life in Years	December 31, 2021						December 31, 2020
		Gross Cost1			Accumulated Amortization			Gross Cost1			Accumulated Amortization
CMS Energy, including Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			26			16
Total			$	1,102		$	684		$	1,105		$	658
Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			25			16
Total			$	1,102		$	684		$	1,104		$	658

1Consumers’ intangible asset additions were $88 million for the year ended December 31, 2021 and $69 million for the year ended December 31, 2020. Consumers’ intangible asset retirements were $91 million for the year ended December 31, 2021 and $65 million for the year ended December 31, 2020.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use

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computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects, except pollution control facilities on its fossil-fuel-fired power plants. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset. Presented in the following table are Consumers’ average AFUDC capitalization rates:

Years Ended December 31	2021		2020		2019
Electric	6.2	%	6.9	%	6.4	%
Gas	5.6		5.7		5.8

Assets Under Finance Leases and Other Financing: Presented in the following table are further details about changes in Consumers’ assets under finance leases and other financing:

In Millions
Years Ended December 31	2021			2020
Consumers
Balance at beginning of period		$	336		$	340
Additions		—			—
Net retirements and other adjustments		(4)			(4)
Balance at end of period		$	332		$	336

Assets under finance leases and other financing are presented as gross amounts. Consumers’ accumulated amortization of assets under finance leases and other financing was $272 million at December 31, 2021 and $254 million at December 31, 2020.

Depreciation and Amortization: Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		136			97
Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		5			3

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and

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gas segments. Consumers performs depreciation studies periodically to determine appropriate group lives. Presented in the following table are the composite depreciation rates for Consumers’ segment properties:

Years Ended December 31	2021		2020		2019
Electric utility property	3.9	%	3.9	%	3.9	%
Gas utility property	2.9		2.9		2.9
Other property	9.4		9.8		10.0

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment		$	975		$	901		$	841
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,114		$	1,043		$	989
Consumers
Depreciation expense – plant, property, and equipment		$	938		$	881		$	827
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,077		$	1,023		$	975

Presented in the following table is CMS Energy’s and Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84
Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84

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Jointly Owned Regulated Utility Facilities

Presented in the following table are Consumers’ investments in jointly owned regulated utility facilities at December 31, 2021:

In Millions, Except Ownership Share
	J.H. Campbell Unit 3				Ludington				Other
Ownership share		93.3		%		51.0		%		various
Utility plant in service		$	1,751			$	499			$	395
Accumulated depreciation		(897)				(198)				(112)
Construction work in progress		21				92				13
Net investment		$	875			$	393			$	296

Consumers includes its share of the direct expenses of the jointly owned plants in operating expenses. Consumers shares operation, maintenance, and other expenses of these jointly owned utility facilities in proportion to each participant’s undivided ownership interest. Consumers is required to provide only its share of financing for the jointly owned utility facilities.

8:    Leases and Palisades Financing

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

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Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2021 and 2020.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

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CMS Energy and Consumers report operating, variable, and short-term lease costs as operating expenses on their consolidated statements of income, except for certain amounts that may be capitalized to other assets. Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

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Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

Lessor

CMS Energy and Consumers are the lessor under power sales and natural gas delivery agreements that are accounted for as leases.

CMS Energy has power sales agreements that are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. For the year ended December 31, 2021, lease revenue from these power sales agreements was $194 million, which included variable lease payments of $138 million. For the year ended December 31, 2020, lease revenue from these power sales agreements was $148 million, which included variable lease payments of $93 million.

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Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2021
2022	$	48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	196

Consumers has an agreement to build, own, operate, and maintain a compressed natural gas fueling station through December 2038. This agreement is accounted for as a direct finance lease, under which the lessee has the option to purchase the natural gas fueling station at the end of the lease term. Fixed monthly payments escalate annually with inflation.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. This agreement is accounted for as a direct finance lease and will automatically extend annually unless terminated by either party. The effects of the lease are eliminated on CMS Energy’s consolidated financial statements.

Minimum rental payments to be received under Consumers’ direct financing leases are $1 million for each of the next five years and $17 million for the years thereafter. The lease receivable was $10 million as of December 31, 2021, which does not include unearned income of $12 million.

Minimum rental payments to be received under CMS Energy’s direct finance lease are less than $1 million for each of the next five years and $6 million for the years thereafter. The lease receivable was $5 million as of December 31, 2021, which does not include unearned income of $4 million.

Palisades Financing

In 2007, Consumers sold Palisades to Entergy and entered into a 15-year PPA to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. Consumers accounted for this transaction as a financing because of its continuing involvement with Palisades through security provided to Entergy for the PPA obligation and other arrangements. Palisades has therefore remained on Consumers’ consolidated balance sheets and Consumers has continued to depreciate it. At the time of the sale, Consumers recorded the sales proceeds as a financing obligation, and has subsequently recorded a portion of the payments under the PPA as interest expense and as a reduction of the financing obligation.

Total amortization and interest charges under the financing were $14 million for the years ended December 31, 2021 and 2020, and $15 million for the year ended December 31, 2019. At December 31, 2021, the Palisades asset and financing obligation both had a balance of $3 million. The finance obligation reflects Consumers’ remaining minimum Palisades PPA payments.

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9:    Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life. CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

Company and ARO Description	In-Service Date	Long-Lived Assets
CMS Energy, including Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage
Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage

No assets have been restricted for purposes of settling AROs.

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Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2020			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2021
CMS Energy, including Consumers
Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605
Renewable generation assets		23			—			—			—			—			23
Total CMS Energy		$	553		$	71		$	(53)		$	24		$	33		$	628
Consumers
Coal ash disposal areas		$	148		$	—		$	(34)		$	5		$	38		$	157
Gas distribution cut, purge, and cap		240			39			(10)			13			—			282
Asbestos abatement		36			—			—			2			—			38
Renewable generation assets		74			16			—			3			—			93
Gas wells plug and abandon		32			16			(9)			1			(5)			35
Total Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605

In Millions
Company and ARO Description	ARO Liability 12/31/2019			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2020
CMS Energy, including Consumers
Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530
Renewable generation assets		3			19			—			1			—			23
Total CMS Energy		$	477		$	65		$	(41)		$	24		$	28		$	553
Consumers
Coal ash disposal areas		$	166		$	—		$	(24)		$	6		$	—		$	148
Gas distribution cut, purge, and cap		231			1			(5)			13			—			240
Asbestos abatement		34			—			—			2			—			36
Renewable generation assets		21			24			—			1			28			74
Gas wells plug and abandon		22			16			(7)			1			—			32
Cable under Straits of Mackinac		—			5			(5)			—			—			—
Total Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530

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10:    Retirement Benefits

Benefit Plans: CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans. These plans include:

•non‑contributory, qualified DB Pension Plans (closed to new non‑union participants as of July 1, 2003 and closed to new union participants as of September 1, 2005)

•a non‑contributory, qualified DCCP for employees hired on or after July 1, 2003

•benefits to certain management employees under a non‑contributory, nonqualified DB SERP (closed to new participants as of March 31, 2006)

•a non‑contributory, nonqualified DC SERP for certain management employees hired or promoted on or after April 1, 2006

•a contributory, qualified defined contribution 401(k) plan

•health care and life insurance benefits under an OPEB Plan

DB Pension Plans: Participants in the pension plans include present and former employees of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries. Pension plan trust assets are not distinguishable by company. Effective December 31, 2017, CMS Energy’s and Consumers’ then-existing pension plan was amended to include only retired and former employees already covered; this amended plan is referred to as DB Pension Plan B. Also effective December 31, 2017, active employees were moved to a newly created pension plan, referred to as DB Pension Plan A, whose benefits mirror those provided under DB Pension Plan B. Maintaining separate plans for the two groups allows CMS Energy and Consumers to employ a more targeted investment strategy and provides additional opportunities to mitigate risk and volatility.

In November 2021, CMS Energy and Consumers determined that 2021 lump-sum payments to retired employees under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once such settlements meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of October 31, 2021 and recognized a settlement loss of $18 million; $18 million of this amount was recognized by Consumers and deferred as a regulatory asset. At December 31, 2021, CMS Energy, including Consumers, recognized an additional settlement loss of $4 million for the period November 1, 2021 to December 31, 2021; $3 million of this amount was recognized by Consumers and deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

DCCP: CMS Energy and Consumers provide an employer contribution to the DCCP 401(k) plan for employees hired on or after July 1, 2003. The contribution ranges from five percent to ten percent of base pay, depending on years of service and employee class. Employees are not required to contribute in order to receive the plan’s employer contribution. DCCP expense for CMS Energy, including Consumers, was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019. DCCP expense for Consumers was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019.

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DB SERP: The DB SERP is a nonqualified plan as defined by the Internal Revenue Code. DB SERP benefits are paid from a rabbi trust established in 1988. The trust assets are not considered plan assets under ASC 715. DB SERP rabbi trust earnings are taxable. Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Trust assets		$	142		$	146
ABO		149			159
Contributions		—			8
Consumers
Trust assets		$	104		$	107
ABO		108			115
Contributions		—			5

DC SERP: On April 1, 2006, CMS Energy and Consumers implemented a DC SERP and froze further new participation in the DB SERP. The DC SERP provides participants benefits ranging from five percent to 15 percent of total compensation. The DC SERP requires a minimum of five years of participation before vesting. CMS Energy’s and Consumers’ contributions to the plan, if any, are placed in a grantor trust. For CMS Energy and Consumers, trust assets were $13 million at December 31, 2021 and $11 million at December 31, 2020. DC SERP assets are included in other non‑current assets on CMS Energy’s and Consumers’ consolidated balance sheets. CMS Energy’s and Consumers’ DC SERP expense was $2 million for the years ended December 31, 2021, 2020, and 2019.

401(k) Plan: The 401(k) plan employer match equals 100 percent of eligible contributions up to the first three percent of an employee’s wages and 50 percent of eligible contributions up to the next two percent of an employee’s wages. The total 401(k) plan cost for CMS Energy, including Consumers, was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019. The total 401(k) plan cost for Consumers was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $27 million for the year ended December 31, 2019.

OPEB Plan: Participants in the OPEB Plan include all regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least ten full years of applicable continuous service. Regular full-time employees who qualify for disability retirement under the DB Pension Plans or are disabled and covered by the DCCP and who have 15 years of applicable continuous service may also participate in the OPEB Plan. Retiree health care costs were based on the assumption that costs would increase 6.25 percent in 2022 and 6.50 percent in 2021 for those under 65 and would increase 6.75 percent in 2022 and 7.00 percent in 2021 for those over 65. The rate of increase was assumed to decline to 4.75 percent by 2028 and thereafter for all retirees.

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Assumptions: Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31	2021		2020		2019
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	3.02	%	2.73	%	3.37	%
DB Pension Plan B	2.79		2.41		3.17
DB SERP	2.78		2.40		3.15
OPEB Plan	2.99		2.69		3.32
Rate of compensation increase
DB Pension Plan A	3.60		3.70		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	2.83	%	3.44	%	4.55	%
DB SERP	2.84		3.46		4.58
OPEB Plan	3.03		3.57		4.63
Interest cost discount rate2,3
DB Pension Plan A	1.97		2.92		4.08
DB Pension Plan B	1.70		2.74		3.93
DB SERP	1.72		2.74		3.94
OPEB Plan	1.99		2.88		4.03
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		6.75		7.00
OPEB Plan	6.75		6.75		7.00
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

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expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2021			2020			2019			2021			2020			2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	53		$	50		$	41		$	18		$	16		$	14
Interest cost		63			83			103			23			33			41
Settlement loss		1			1			—			—			—			—
Expected return on plan assets		(208)			(191)			(162)			(109)			(100)			(88)
Amortization of:
Net loss		100			95			50			8			15			26
Prior service cost (credit)		4			1			1			(53)			(56)			(62)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	41		$	33		$	(113)		$	(92)		$	(69)
Consumers
Net periodic cost (credit)
Service cost		$	51		$	49		$	40		$	17		$	15		$	13
Interest cost		59			78			97			23			31			40
Expected return on plan assets		(197)			(181)			(153)			(102)			(93)			(82)
Amortization of:
Net loss		96			90			47			8			15			26
Prior service cost (credit)		4			1			1			(51)			(54)			(61)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	39		$	32		$	(105)		$	(86)		$	(64)

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

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(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

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Reconciliations: Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2021			2020				2021			2020			2021			2020
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Service cost		53			50				—			—			18			16
Interest cost		60			79				3			4			23			33
Plan amendments		—			24				—			—			5			—
Actuarial loss (gain)		(108)		1	355		1		(4)			16			(32)		1	39		1
Benefits paid		(201)			(215)				(10)			(10)			(53)			(48)
Benefit obligation at end of period		$	3,070		$	3,266			$	149		$	160		$	1,166		$	1,205
Plan assets at fair value at beginning of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Actual return on plan assets		398			371				—			—			194			182
Company contribution		—			700				10			10			—			1
Actual benefits paid		(201)			(215)				(10)			(10)			(52)			(47)
Plan assets at fair value at end of period		$	3,599		$	3,402			$	—		$	—		$	1,787		$	1,645
Funded status		$	529	2	$	136	2		$	(149)		$	(160)		$	621		$	440
Consumers
Benefit obligation at beginning of period									$	117		$	109		$	1,158		$	1,120
Service cost									—			—			17			15
Interest cost									2			3			23			31
Plan amendments									—			—			5			—
Actuarial loss (gain)									(3)			12			(30)		1	37		1
Benefits paid									(7)			(7)			(51)			(45)
Benefit obligation at end of period									$	109		$	117		$	1,122		$	1,158
Plan assets at fair value at beginning of period									$	—		$	—		$	1,535		$	1,410
Actual return on plan assets									—			—			182			169
Company contribution									7			7			—			1
Actual benefits paid									(7)			(7)			(49)			(45)
Plan assets at fair value at end of period									$	—		$	—		$	1,668		$	1,535
Funded status									$	(109)		$	(117)		$	546		$	377

1The actuarial gains for 2021 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates. The actuarial loss for 2020 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $510 million at December 31, 2021 and $138 million at December 31, 2020.

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Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	529		$	136
OPEB Plan		621			440
Current liabilities
DB SERP		10			10
Non-current liabilities
DB SERP		139			150
Consumers
Non-current assets
DB Pension Plans		$	510		$	138
OPEB Plan		546			377
Current liabilities
DB SERP		7			7
Non-current liabilities
DB SERP		102			110

The ABO for the DB Pension Plans was $2.7 billion at December 31, 2021 and $2.9 billion at December 31, 2020. At December 31, 2021 and 2020, the PBO and ABO did not exceed plan assets for any of the defined benefit pension plans.

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Items Not Yet Recognized as a Component of Net Periodic Benefit Cost: Presented in the following table are the amounts recognized in regulatory assets, regulatory liabilities, and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets and regulatory liabilities, see Note 2, Regulatory Matters.

In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2021			2020			2021			2020
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss (gain)		94			120			(17)			(10)
Prior service cost (credit)		—			1			(5)			(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	931		$	1,344		$	(76)		$	(8)
Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss		41			47			—			—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	878		$	1,270		$	(54)		$	8

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Plan Assets: Presented in the following tables are the fair values of the assets of CMS Energy’s DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy. For additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	DB Pension Plans
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	30		$	30		$	—		$	115		$	115		$	—
U.S. government and agencies securities		209			—			209			150			—			150
Corporate debt		595			—			595			540			—			540
State and municipal bonds		13			—			13			11			—			11
Foreign corporate bonds		66			—			66			41			—			41
Mutual funds		785			785			—			971			971			—
		$	1,698		$	815		$	883		$	1,828		$	1,086		$	742
Pooled funds		1,901									1,574
Total		$	3,599								$	3,402

In Millions
	OPEB Plan
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	21		$	21		$	—		$	33		$	33		$	—
U.S. government and agencies securities		25			—			25			18			—			18
Corporate debt		73			—			73			64			—			64
State and municipal bonds		2			—			2			2			—			2
Foreign corporate bonds		8			—			8			5			—			5
Common stocks		85			85			—			66			66			—
Mutual funds		941			941			—			807			807			—
		$	1,155		$	1,047		$	108		$	995		$	906		$	89
Pooled funds		632									650
Total		$	1,787								$	1,645

Cash and Short-Term Investments: Cash and short-term investments consist of money market funds with daily liquidity.

U.S. Government and Agencies Securities: U.S. government and agencies securities consist of U.S. Treasury notes and other debt securities backed by the U.S. government and related agencies. These securities are valued based on quoted market prices.

Corporate Debt: Corporate debt investments consist of investment grade bonds of U.S. issuers from diverse industries. These securities are valued based on quoted market prices, when available, or yields available on comparable securities of issuers with similar credit ratings.

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State and Municipal Bonds: State and municipal bonds are valued using a matrix-pricing model that incorporates Level 2 market-based information. The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported securities trades, broker/dealer quotes, bond ratings, and general information on market movements for investment grade state and municipal securities normally considered by market participants when pricing such debt securities.

Foreign Corporate Bonds: Foreign corporate debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Common Stocks: Common stocks in the OPEB Plan consist of equity securities that are actively managed and tracked to the S&P 500 Index. These securities are valued at their quoted closing prices.

Mutual Funds: Mutual funds represent shares in registered investment companies that are priced based on the daily quoted net asset values that are publicly available and are the basis for transactions to buy or sell shares in the funds.

Pooled Funds: Pooled funds include both common and collective trust funds as well as special funds that contain only employee benefit plan assets from two or more unrelated benefit plans. These funds primarily consist of U.S. and foreign equity securities, but also include U.S. and foreign fixed-income securities and multi-asset investments. Since these investments are valued at their net asset value as a practical expedient, they are not classified in the fair value hierarchy.

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2021:

	DB Pension Plans			OPEB Plan
Equity securities		54.0	%		55.0	%
Fixed-income securities		28.0			28.0
Real asset investments		12.0			12.0
Multi-asset investments		5.0			4.0
Cash and Cash Equivalents		1.0			1.0
		100.0	%		100.0	%

CMS Energy’s target 2021 asset allocation for the assets of the DB Pension Plans was 54 percent equity, 29 percent fixed income, 12 percent real assets, and five percent multi-asset investments.

CMS Energy established union and non‑union VEBA trusts to fund future retiree health and life insurance benefits. These trusts are funded through the ratemaking process for Consumers and through direct contributions from the non‑utility subsidiaries. CMS Energy’s target 2021 asset allocation for the health trusts was 55 percent equity, 30 percent fixed income, 12 percent real assets, and three percent multi-asset investments. CMS Energy’s target asset allocation for the life trusts was 53 percent equity, 32 percent fixed income, and 15 percent multi-asset investments.

The goal of these target allocations was to maximize the long-term return on plan assets, while maintaining a prudent level of risk. The level of acceptable risk is a function of the liabilities of the plans. Equity investments are diversified mostly across the S&P 500 Index, with lesser allocations to the S&P MidCap and SmallCap Indexes and Foreign Equity Funds. Fixed-income investments are diversified across investment grade instruments of government and corporate issuers, as well as high-yield and global bond funds. Real asset investments are diversified across real estate investment trusts, public infrastructure, and public resource equity. Multi-asset investments are global tactical asset allocations.

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CMS Energy uses annual liability measurements, quarterly portfolio reviews, and periodic asset/liability studies to evaluate the need for adjustments to the portfolio allocations.

Contributions: Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
DB Pension Plans		$	—		$	700
OPEB Plan		—			1
Consumers
DB Pension Plans		$	—		$	682
OPEB Plan		—			1

Contributions comprise required amounts and discretionary contributions. Neither CMS Energy nor Consumers plans to contribute to the DB Pension Plans or OPEB Plan in 2022. Actual future contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB Pension Plans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

Benefit Payments: Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:

In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2022		$	185		$	10		$	52
2023		181			10			54
2024		178			10			56
2025		180			10			58
2026		178			9			59
2027-2031		876			45			308
Consumers
2022		$	175		$	7		$	49
2023		171			7			52
2024		169			7			54
2025		170			7			55
2026		169			6			56
2027-2031		830			31			294

Collective Bargaining Agreements: At December 31, 2021, unions represented 41 percent of CMS Energy’s employees and 42 percent of Consumers’ employees. The UWUA represents Consumers’ operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. The UWUA and USW agreements expired and new agreements were ratified in 2020. These union contracts expire in 2025.

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11:    Stock-Based Compensation

CMS Energy and Consumers provide a PISP to officers, employees, and non‑employee directors based on their contributions to the successful management of the company. The PISP has a ten-year term, expiring in May 2030.

In 2021, all awards were in the form of restricted stock or restricted stock units. The PISP also allows for unrestricted common stock, stock options, stock appreciation rights, phantom shares, performance units, and incentive options, none of which was granted in 2021, 2020, or 2019.

Shares awarded or subject to stock options, phantom shares, or performance units may not exceed 6.5 million shares from June 2020 through May 2030. CMS Energy and Consumers may issue awards of up to 5,927,297 shares of common stock under the PISP as of December 31, 2021. Shares for which payment or exercise is in cash, as well as shares that expire, terminate, or are canceled or forfeited, may be awarded or granted again under the PISP.

All awards under the PISP vest fully upon death. Upon a change of control of CMS Energy or termination under an officer separation agreement, the awards will vest in accordance with specific officer agreements. If stated in the award, for restricted stock recipients who terminate employment due to retirement or disability, a pro-rata portion of the award will vest upon termination, with any market-based award also contingent upon the outcome of the market condition and any performance-based award contingent upon the outcome of the performance condition. The pro-rata portion is equal to the portion of the service period served between the award grant date and the employee’s termination date. The remaining portion of the awards will be forfeited. All awards for directors vest fully upon retirement. Restricted shares may be forfeited if employment terminates for any other reason or if the minimum service requirements are not met, as described in the award document.

Restricted Stock Awards: Restricted stock awards for employees under the PISP are in the form of performance-based, market-based, and time-lapse restricted stock. Award recipients receive shares of CMS Energy common stock that have dividend and voting rights. The dividends on time-lapse restricted stock are paid in cash or in CMS Energy common stock. The dividends on performance-based and market-based restricted stock are paid in restricted shares equal to the value of the dividends. These additional restricted shares are subject to the same vesting conditions as the underlying restricted stock shares.

Performance-based restricted stock vesting is contingent on meeting at least a 36-month service requirement and a performance condition. The performance condition is based on an adjusted measure of CMS Energy’s EPS growth relative to a peer group over a three-year period. The awards granted in 2021, 2020, and 2019 require a 38-month service period. Market-based restricted stock vesting is generally contingent on meeting a three-year service requirement and a market condition. The market condition is based on a comparison of CMS Energy’s total shareholder return with the median total shareholder return of a peer group over the same three-year period. Depending on the outcome of the performance condition or the market condition, a recipient may earn a total award ranging from zero to 200 percent of the initial grant. Time-lapse restricted stock generally vests after a service period of three years.

Restricted Stock Units: In 2021, 2020, and 2019, CMS Energy and Consumers granted restricted stock units to certain non‑employee directors who elected to defer their restricted stock awards. The restricted stock units generally vest after a service period of one year or, if earlier, at the next annual meeting. The restricted stock units will be distributed to the recipients as shares in accordance with the directors’ deferral agreements. Restricted stock units do not have voting rights, but do have dividend rights. In lieu of cash dividend payments, the dividends on restricted stock units are paid in additional units equal to the value of the dividends. These additional restricted stock units are subject to the same vesting and

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distribution conditions as the underlying restricted stock units. No restricted stock units were forfeited during 2021.

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

	CMS Energy, including Consumers				Consumers
Year Ended December 31, 2021	Number of Shares	Weighted-Average Grant Date Fair Value per Share			Number of Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	817,357		$	51.68	781,531		$	51.73
Granted
Restricted stock	547,201		43.52		517,141		42.85
Restricted stock units	13,867		54.11		13,093		53.93
Vested
Restricted stock	(408,011)		29.46		(388,009)		29.55
Restricted stock units	(15,577)		48.15		(14,891)		48.09
Forfeited – restricted stock	(22,264)		57.90		(21,780)		58.01
Nonvested at end of period	932,573		$	56.56	887,085		$	56.19

Year Ended December 31, 2021	CMS Energy, including Consumers	Consumers
Granted
Time-lapse awards	118,290	112,128
Market-based awards	143,843	135,638
Performance-based awards	143,843	135,638
Restricted stock units	11,725	11,035
Dividends on market-based awards	15,661	14,890
Dividends on performance-based awards	15,964	15,175
Dividends on restricted stock units	2,142	2,058
Additional market-based shares based on achievement of condition	59,736	56,505
Additional performance-based shares based on achievement of condition	49,864	47,167
Total granted	561,068	530,234

CMS Energy and Consumers charge the fair value of the restricted stock awards to expense over the required service period and charge the fair value of the restricted stock units to expense immediately. For performance-based awards, CMS Energy and Consumers estimate the number of shares expected to vest at the end of the performance period based on the probable achievement of the performance objective. Performance-based and market-based restricted stock awards have graded vesting features for retirement-eligible employees, and CMS Energy and Consumers recognize expense for those awards on a graded vesting schedule over the required service period. Expense for performance-based and market-based restricted stock awards for non‑retirement-eligible employees and time-lapse awards is recognized on a straight-line basis over the required service period.

The fair value of performance-based and time-lapse restricted stock and restricted stock units is based on the price of CMS Energy’s common stock on the grant date. The fair value of market-based restricted stock awards is calculated on the grant date using a Monte Carlo simulation. CMS Energy and Consumers

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base expected volatilities on the historical volatility of the price of CMS Energy common stock. The risk-free rate for valuation of the market-based restricted stock awards was based on the three-year U.S. Treasury yield at the award grant date.

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31	2021		2020		2019
Expected volatility	27.6	%	14.2	%	14.9	%
Expected dividend yield	2.8		2.4		2.8
Risk-free rate	0.2		1.6		2.5

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	43.52		$	45.56		$	43.57
Restricted stock units granted		54.11			49.76			50.35
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	42.85		$	45.53		$	43.57
Restricted stock units granted		53.93			49.70			51.15

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Fair value of shares that vested during the year		$	25		$	22		$	26
Compensation expense recognized		22			11			22
Income tax benefit recognized		1			3			1
Consumers
Fair value of shares that vested during the year		$	24		$	21		$	25
Compensation expense recognized		21			10			21
Income tax benefit recognized		1			3			1

At December 31, 2021, $24.1 million of total unrecognized compensation cost was related to restricted stock for CMS Energy, including Consumers, and $22.9 million of total unrecognized compensation cost was related to restricted stock for Consumers. CMS Energy and Consumers expect to recognize this cost over a weighted-average period of two years.

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12:    Income Taxes

CMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
Years Ended December 31	2021				2020				2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823			$	809			$	764
Income tax expense at statutory rate		173				170				160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39				44				46
TCJA excess deferred taxes1		(50)				(35)				(31)
Production tax credits		(40)				(28)				(20)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Research and development tax credits, net3		(3)				(11)				(2)
Refund of alternative minimum tax sequestration4		—				(9)				—
Other, net		4				(3)				(9)
Income tax expense		$	95			$	115			$	131
Effective tax rate		11.5		%		14.2		%		17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024			$	989			$	928
Income tax expense at statutory rate		215				208				195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54				47				53
TCJA excess deferred taxes1		(50)				(35)				(31)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Production tax credits		(33)				(19)				(12)
Research and development tax credits, net3		(3)				(11)				(2)
Other, net		1				(4)				(5)
Income tax expense		$	156			$	173			$	185
Effective tax rate		15.2		%		17.5		%		19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

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3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

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Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24
Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts on CMS Energy’s and Consumers’ consolidated financial statements.

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Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041
Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030
General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

CMS Energy has provided a valuation allowance of $2 million for the local tax loss carryforward. CMS Energy and Consumers expect to utilize fully their tax loss and credit carryforwards for which no valuation allowance has been provided. It is reasonably possible that further adjustments will be made to the valuation allowances within one year.

In 2021, the sale of EnerBank to Regions Bank resulted in utilization of most of the federal net operating loss carryforwards. EnerBank is not included in CMS Energy’s Michigan tax filing, therefore state net operating loss carryforwards were not impacted by the sale of EnerBank.

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—
Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—
Balance at end of period		$	34		$	31		$	34

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If recognized, all of these uncertain tax benefits would affect CMS Energy’s and Consumers’ annual effective tax rates in future years. A trial is anticipated in 2022 with the Michigan Tax Tribunal related to the methodology of state apportionment for Consumers’ electricity sales to MISO; however, a final conclusion is not anticipated in the next 12 months.

CMS Energy and Consumers recognize accrued interest and penalties, where applicable, as part of income tax expense. CMS Energy, including Consumers, recognized no interest or penalties for each of the years ended December 31, 2021, 2020, or 2019.

The amount of income taxes paid is subject to ongoing audits by federal, state, local, and foreign tax authorities, which can result in proposed assessments. CMS Energy’s federal income tax returns for 2018 and subsequent years remain subject to examination by the IRS. CMS Energy’s Michigan Corporate Income Tax returns for 2013 and subsequent years remain subject to examination by the State of Michigan. CMS Energy’s and Consumers’ estimate of the potential outcome for any uncertain tax issue is highly judgmental. CMS Energy and Consumers believe that their accrued tax liabilities at December 31, 2021 were adequate for all years.

13:    Earnings Per Share—CMS Energy

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on income from continuing operations:

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			2019
Income available to common stockholders
Income from continuing operations		$	728		$	694		$	633
Less income (loss) attributable to noncontrolling interests		(23)			(3)			2
Less preferred stock dividends		5			—			—
Income from continuing operations available to common stockholders – basic and diluted		$	746		$	697		$	631
Average common shares outstanding
Weighted-average shares – basic		289.0			285.0			283.0
Add dilutive nonvested stock awards		0.5			0.7			0.7
Add dilutive forward equity sale contracts		—			0.6			0.6
Weighted-average shares – diluted		289.5			286.3			284.3
Income from continuing operations per average common share available to common stockholders
Basic		$	2.58		$	2.45		$	2.23
Diluted		2.58			2.44			2.22

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non‑participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS. The non‑participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non‑participating securities are also forfeited. Accordingly, the non‑participating

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awards and stock dividends were included in the computation of diluted EPS, but not in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non‑participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS. For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

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14:    Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

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In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

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In Millions
Year Ended December 31, 2019	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,407		$	1,922		$	—		$	6,329
Other		—			—			74			74
Revenue recognized from contracts with customers		$	4,407		$	1,922		$	74		$	6,403
Leasing income		—			—			174			174
Financing income		9			5			—			14
Consumers alternative-revenue programs		23			10			—			33
Total operating revenue – CMS Energy		$	4,439		$	1,937		$	248		$	6,624
Consumers
Consumers utility revenue
Residential		$	1,988		$	1,316					$	3,304
Commercial		1,502			372						1,874
Industrial		669			51						720
Other		248			183						431
Revenue recognized from contracts with customers		$	4,407		$	1,922					$	6,329
Financing income		9			5						14
Alternative-revenue programs		23			10						33
Total operating revenue – Consumers		$	4,439		$	1,937					$	6,376

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

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In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $22 million for the year ended December 31, 2021, $33 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $486 million at December 31, 2021 and $437 million at December 31, 2020.

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Revenues to Be Refunded: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. For additional information, see Note 2, Regulatory Matters.

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15:    Other Income and Other Expense

Other income was not significant for any of the periods presented. Presented in the following table are the components of other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Other expense
Donations		$	(6)		$	(35)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
Loss on reacquired and extinguished debt		—			(16)			—
All other		(7)			(6)			(4)
Total other expense – CMS Energy		$	(18)		$	(62)		$	(13)
Consumers
Other expense
Donations		$	(6)		$	(33)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
All other		(7)			(5)			(4)
Total other expense – Consumers		$	(18)		$	(43)		$	(13)

16:    Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Current assets held for sale		—			136
Cash and cash equivalents, including restricted amounts – CMS Energy		$	476		$	185
Consumers
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Cash and cash equivalents, including restricted amounts – Consumers		$	44		$	35

Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

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Current Assets Held for Sale: On October 1, 2021, EnerBank was acquired by Regions Bank. EnerBank’s cash and cash equivalents are presented as assets held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

17:    Reportable Segments

Reportable segments consist of business units defined by the products and services they offer. CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

Accounting policies for CMS Energy’s and Consumers’ segments are as described in Note 1, Significant Accounting Policies. The consolidated financial statements reflect the assets, liabilities, revenues, and expenses of the individual segments when appropriate. Accounts are allocated among the segments when common accounts are attributable to more than one segment. The allocations are based on certain measures of business activities, such as revenue, labor dollars, customers, other operating and maintenance expense, construction expense, leased property, taxes, or functional surveys. For example, customer receivables are allocated based on revenue, and pension provisions are allocated based on labor dollars.

Inter-segment sales and transfers are accounted for at current market prices and are eliminated in consolidated net income available to common stockholders by segment. Inter-segment sales and transfers were immaterial for all periods presented.

CMS Energy

The segments reported for CMS Energy are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

•enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

On October 1, 2021, EnerBank was acquired by Regions Bank. As a result, EnerBank is no longer included in the composition of CMS Energy’s reportable segments. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

CMS Energy presents corporate interest and other expenses, discontinued operations, and Consumers’ other consolidated entities within other reconciling items. Beginning in 2021, CMS Land, which holds the environmental remediation obligations at Bay Harbor, will be included within other reconciling items rather than within the enterprises segment. This change was not material and was made to align segment reporting with the legal organization and internal reporting of CMS Energy.

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Consumers

The segments reported for Consumers are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by segment:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Enterprises		308			229			248
Total operating revenue – CMS Energy		$	7,329		$	6,418		$	6,624
Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Total operating revenue – Consumers		$	7,021		$	6,189		$	6,376
CMS Energy, including Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Enterprises		37			20			14
Other reconciling items		1			1			1
Total depreciation and amortization – CMS Energy		$	1,114		$	1,043		$	989
Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Other reconciling items		1			1			1
Total depreciation and amortization – Consumers		$	1,077		$	1,023		$	975

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In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Income from equity method investees1
Enterprises		$	10		$	5		$	10
Total income from equity method investees – CMS Energy		$	10		$	5		$	10
CMS Energy, including Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Enterprises		6			7			7
Other reconciling items		183			179			157
Total interest charges – CMS Energy		$	500		$	505		$	460
Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Other reconciling items		—			1			1
Total interest charges – Consumers		$	311		$	320		$	297
CMS Energy, including Consumers
Income tax expense (benefit)
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Enterprises		(2)			(4)			2
Other reconciling items		(59)			(54)			(56)
Total income tax expense – CMS Energy		$	95		$	115		$	131
Consumers
Income tax expense
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Total income tax expense – Consumers		$	156		$	173		$	185

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In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Enterprises		23			36			33
Other reconciling items		458			(96)			(95)
Total net income available to common stockholders – CMS Energy		$	1,348		$	755		$	680
Consumers
Net income (loss) available to common stockholder
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Other reconciling items		(1)			(1)			(1)
Total net income available to common stockholder – Consumers		$	866		$	814		$	741
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Enterprises		1,122			1,113			405
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – CMS Energy		$	29,893		$	27,870		$	25,368
Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – Consumers		$	28,771		$	26,757		$	24,963
CMS Energy, including Consumers
Investments in equity method investees1
Enterprises		$	71		$	70		$	71
Total investments in equity method investees – CMS Energy		$	71		$	70		$	71

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In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Total assets
Electric utility2		$	16,493		$	15,829		$	14,911
Gas utility2		10,517			9,429			8,659
Enterprises		1,312			1,276			527
Other reconciling items		431			3,132			2,740
Total assets – CMS Energy		$	28,753		$	29,666		$	26,837
Consumers
Total assets
Electric utility2		$	16,555		$	15,893		$	14,973
Gas utility2		10,564			9,477			8,706
Other reconciling items		21			29			20
Total assets – Consumers		$	27,140		$	25,399		$	23,699
CMS Energy, including Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Enterprises		17			108			5
Other reconciling items		2			1			1
Total capital expenditures – CMS Energy		$	2,161		$	2,275		$	2,139
Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Other reconciling items		2			1			1
Total capital expenditures – Consumers		$	2,144		$	2,167		$	2,134

1Consumers had no significant equity method investments.

2Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

3Amounts include assets placed under finance lease.

4Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

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18:    Related-Party Transactions—Consumers

Consumers enters into a number of transactions with related parties in the normal course of business. These transactions include but are not limited to:

•purchases of electricity from affiliates of CMS Enterprises

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

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	2021			2020			2019
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	77		$	64		$	75

Amounts payable to related parties for purchased power and other services were $22 million at December 31, 2021 and $13 million at December 31, 2020. Accounts receivable from related parties were $7 million at December 31, 2021 and $16 million at December 31, 2020.

CMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.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, 2021 and 2020.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. For additional details about the agreement, see Note 8, Leases and Palisades Financing.

In June 2021, Consumers entered into an agreement with DIG, CMS Generation Michigan Power, and CMS ERM to purchase the enterprises segment’s three natural gas-fueled generating units, totaling 1,001 MW of nameplate capacity for $515 million, subject to certain adjustments. The parties plan to close the sale, which is dependent upon regulatory approvals, in 2025.

In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million. For additional details about the agreement, see Note 4, Financings and Capitalization.

19:    Variable Interest Entities

CMS Enterprises has a 51-percent ownership interest in Aviator Wind Equity Holdings, which holds a Class B membership interest in Aviator Wind, a 525-MW wind generation project in Coke County, Texas. The Class A membership interest in Aviator Wind is held by a tax equity investor, BHE Renewables, LLC, a subsidiary of Berkshire Hathaway Energy Company. Earnings, tax attributes, and cash flows generated by Aviator Wind are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company operating agreement;

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these ratios change over time and are not representative of the ownership interest percentages of each membership class.

Aviator Wind Equity Holdings and Aviator Wind represent VIEs. In accordance with the associated limited liability company operating agreement, the tax equity investor is guaranteed preferred returns from Aviator Wind. However, CMS Enterprises manages and controls the operating activities of Aviator Wind Equity Holdings and, ultimately, Aviator Wind. As a result, CMS Enterprises is the primary beneficiary of Aviator Wind Equity Holdings and Aviator Wind, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. CMS Enterprises consolidates Aviator Wind Equity Holdings and Aviator Wind and presents the Class A membership interest and 49 percent of the Class B membership interest in Aviator Wind as noncontrolling interests.

Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:

In Millions
December 31	2021			2020
Current
Cash and cash equivalents		$	20		$	7
Accounts receivable		3			5
Prepayments and other current assets		1			1
Non-current
Plant, property, and equipment, net		671			692
Total assets1		$	695		$	705
Current
Accounts payable		$	15		$	3
Non-current
Asset retirement obligations		20			19
Total liabilities		$	35		$	22

1Assets may be used only to meet VIEs’ obligations and commitments.

CMS Enterprises is obligated under certain indemnities that protect the tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. For additional details on these indemnity obligations, see Note 3, Contingencies and Commitments—Guarantees.

Since Aviator Wind’s income and cash flows are not distributed among its investors based on ownership interest percentages, CMS Enterprises allocates Aviator Wind’s income (loss) among its investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of Aviator Wind at the net book value of its underlying net assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance. CMS Enterprises then receives 51 percent of the earnings, tax attributes, and cash flows that were allocated to Aviator Wind Equity Holdings.

Other VIEs: CMS Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While CMS Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability

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to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships.

Presented in the following table is information about these partnerships:

Name	Nature of the Entity	Nature of CMS Energy’s Involvement
T.E.S. Filer City	Coal-fueled power generator	Long-term PPA between partnership and Consumers
		Employee assignment agreement
Grayling	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Genesee	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Craven	Wood waste-fueled power generator	Operating and management contract

1Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers.

The creditors of these partnerships do not have recourse to the general credit of CMS Energy or Consumers. CMS Energy and Consumers have not provided any financial or other support during the periods presented that was not previously contractually required.

CMS Energy’s investment in these partnerships is included in investments on its consolidated balance sheets in the amount of $71 million at December 31, 2021 and $70 million at December 31, 2020.

20:    Exit Activities and Discontinued Operations

Exit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC.

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As of December 31, 2021, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $7 million has been deferred as a regulatory asset. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
Years Ended December 31	2021			2020
Retention benefit liability at beginning of period		$	11		$	4
Costs incurred and charged to maintenance and other operating expenses		—			13
Costs deferred as a regulatory asset		7			—
Costs incurred and capitalized		1			2
Costs paid or settled		(5)			(8)
Retention benefit liability at the end of the period1		$	14		$	11

1Includes current portion of other liabilities of $5 million at December 31, 2021 and $3 million at December 31, 2020.

Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million. CMS Energy intends to use the proceeds from the sale to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation.

In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believes is inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment will be submitted to a mutually agreed upon independent accounting firm for final determination. While CMS Energy does not believe material loss is probable, it cannot predict the outcome of this matter.

EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020.

The table below presents the financial results of EnerBank included in income from discontinued operations:

In Millions
Years Ended December 31	2021			2020			2019
Operating revenue		$	209		$	262		$	221
Expenses
Operating expenses		60			130			97
Interest expense		34			56			59
Income before income taxes		$	115		$	76		$	65
Gain on sale		657			—			—
Income from discontinued operations before income taxes		$	772		$	76		$	65
Income tax expense		170			18			16
Income from discontinued operations, net of tax		$	602		$	58		$	49

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The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:

In Millions
December 31	2020
Assets
Current
Cash and cash equivalents		$	136
Accounts receivable and other current assets		18
Notes receivable, less allowance of $32		275
Total current assets		$	429
Non‑current
Plant, property, and equipment, net		$	22
Notes receivable, less allowance of $91		2,612
Other non‑current assets		46
Total non‑current assets		$	2,680
Total assets		$	3,109
Liabilities
Current
Current portion of long-term debt		$	915
Accounts payable and other current liabilities		38
Total current liabilities		$	953
Non‑current
Long-term debt		$	1,890
Other non‑current liabilities		4
Total non‑current liabilities		$	1,894
Total liabilities		$	2,847

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21:    Quarterly Financial and Common Stock Information (Unaudited)

Presented in the table below are CMS Energy’s quarterly financial and common stock information. CMS Energy has reclassified certain prior period amounts to conform to the presentation in the present period. The most significant reclassification is related to the sale of EnerBank to Regions Bank. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021 and 2020.

In Millions, Except Per Share Amounts
	2021
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	2,013		$	1,558		$	1,725		$	2,033
Operating income		430			252			260			204
Income From Continuing Operations		308			153			153			114
Income From Discontinued Operations, Net of Tax		34			18			30			520
Net income		342			171			183			634
Loss attributable to noncontrolling interests		(7)			(5)			(6)			(5)
Net Income Attributable to CMS Energy		349			176			189			639
Preferred Stock Dividends		—			—			3			2
Net income available to common stockholders		349			176			186			637
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Basic earnings per average common share1		1.21			0.61			0.64			2.20
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Diluted earnings per average common share1		1.21			0.61			0.64			2.20

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

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In Millions, Except Per Share Amounts
	2020
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	1,802		$	1,382		$	1,507		$	1,727
Operating income		335			248			340			307
Income From Continuing Operations		229			129			198			138
Income From Discontinued Operations, Net of Tax		14			8			12			24
Net income		243			137			210			162
Income (loss) attributable to noncontrolling interests		—			1			(8)			4
Net income available to common stockholders		243			136			218			158
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.81			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Basic earnings per average common share1		0.86			0.48			0.76			0.55
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.80			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Diluted earnings per average common share1		0.85			0.48			0.76			0.55

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of CMS Energy Corporation

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of CMS Energy Corporation and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedules listed in the index appearing after Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

178

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of New Regulatory Matters

As described in Note 2 to the consolidated financial statements, the Company is a utility and must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non-regulated business. As of December 31, 2021, the Company has recognized a total of $2,305 million of regulatory assets, $3,948 million of regulatory liabilities, $25 million of accrued revenue, and $12 million of accrued rate refunds. As described by management, there are multiple participants to rate case proceedings who often challenge various aspects of those proceedings, including the prudence of the Company’s policies and practices. These participants often seek cost disallowances and other relief and have appealed significant decisions reached by the regulators. The recovery of regulatory assets and the settlement of regulatory liabilities are contingent upon the outcomes of rate cases and regulatory proceedings.

The principal considerations for our determination that performing procedures relating to management’s accounting for the effects of new regulatory matters is a critical audit matter are (i) the high degree of auditor judgment and subjectivity applied to evaluate management’s assessment of the potential outcomes and related accounting impacts associated with pending rate case proceedings, (ii) in some cases, the significant audit effort necessary to assess contrary evidence from various parties involved in rate case proceedings, and (iii) the significant audit effort necessary to evaluate audit evidence related to the recovery of regulatory assets and the settlement of regulatory liabilities.

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Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts. These procedures also included, among others, obtaining and evaluating the Company’s correspondence with regulators, evaluating the reasonableness of management’s assessment regarding whether recovery of regulatory assets and settlement of regulatory liabilities is probable and evaluating the sufficiency of the disclosures in the consolidated financial statements. Procedures were performed to evaluate the regulatory assets and liabilities, including those subject to pending rate cases, based on provisions and formulas outlined in rate orders, other regulatory correspondence, or application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2022

We have served as the Company’s auditor since 2007.

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181

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholder of Consumers Energy Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Consumers Energy Company and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2021, including the related notes and financial statement schedule listed in the index appearing after Item 15 (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control — Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

182

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Accounting for the Effects of New Regulatory Matters

As described in Note 2 to the consolidated financial statements, the Company is a utility and must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, the Company records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by a non-regulated business. As of December 31, 2021, the Company has recognized a total of $2,305 million of regulatory assets, $3,948 million of regulatory liabilities, $25 million of accrued revenue, and $12 million of accrued rate refunds. As described by management, there are multiple participants to rate case proceedings who often challenge various aspects of those proceedings, including the prudence of the Company’s policies and practices. These participants often seek cost disallowances and other relief and have appealed significant decisions reached by the regulators. The recovery of regulatory assets and the settlement of regulatory liabilities are contingent upon the outcomes of rate cases and regulatory proceedings.

The principal considerations for our determination that performing procedures relating to management’s accounting for the effects of new regulatory matters is a critical audit matter are (i) the high degree of auditor judgment and subjectivity applied to evaluate management’s assessment of the potential outcomes and related accounting impacts associated with pending rate case proceedings, (ii) in some cases, the significant audit effort necessary to assess contrary evidence from various parties involved in rate case proceedings, and (iii) the significant audit effort necessary to evaluate audit evidence related to the recovery of regulatory assets and the settlement of regulatory liabilities.

183

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of regulatory proceedings, including the probability of recovering incurred costs and the related accounting and disclosure impacts. These procedures also included, among others, obtaining and evaluating the Company’s correspondence with regulators, evaluating the reasonableness of management’s assessment regarding whether recovery of regulatory assets and settlement of regulatory liabilities is probable and evaluating the sufficiency of the disclosures in the consolidated financial statements. Procedures were performed to evaluate the regulatory assets and liabilities, including those subject to pending rate cases, based on provisions and formulas outlined in rate orders, other regulatory correspondence, or application of relevant regulatory precedents.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2022

We have served as the Company’s auditor since 2007.

184

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.    Controls and Procedures

CMS Energy

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures: Under the supervision and with the participation of management, including its CEO and CFO, CMS Energy conducted an evaluation of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, CMS Energy’s CEO and CFO have concluded that its disclosure controls and procedures were effective as of December 31, 2021.

Management’s Annual Report on Internal Control Over Financial Reporting: CMS Energy’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). CMS Energy’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of CMS Energy

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of CMS Energy are being made only in accordance with authorizations of management and directors of CMS Energy

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of CMS Energy’s assets that could have a material effect on its financial statements

Management, including its CEO and CFO, does not expect that its internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. In addition, any evaluation of the effectiveness of controls is subject to risks that those internal controls may become inadequate in future periods because of changes in business conditions, or that the degree of compliance with the policies or procedures deteriorates.

Under the supervision and with the participation of management, including its CEO and CFO, CMS Energy conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2021. In making this evaluation, management used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, CMS Energy’s management concluded that its internal control over financial reporting was effective as of December 31, 2021. The effectiveness of CMS Energy’s internal control over financial reporting as of December 31, 2021 has

185

been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8. Financial Statements and Supplementary Data.

Changes in Internal Control Over Financial Reporting: There have not been any changes in CMS Energy’s internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to affect materially, its internal control over financial reporting.

Consumers

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures: Under the supervision and with the participation of management, including its CEO and CFO, Consumers conducted an evaluation of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on such evaluation, Consumers’ CEO and CFO have concluded that its disclosure controls and procedures were effective as of December 31, 2021.

Management’s Annual Report on Internal Control Over Financial Reporting: Consumers’ management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Consumers’ internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes policies and procedures that:

•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Consumers

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of Consumers are being made only in accordance with authorizations of management and directors of Consumers

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Consumers’ assets that could have a material effect on its financial statements

Management, including its CEO and CFO, does not expect that its internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. In addition, any evaluation of the effectiveness of controls is subject to risks that those internal controls may become inadequate in future periods because of changes in business conditions, or that the degree of compliance with the policies or procedures deteriorates.

Under the supervision and with the participation of management, including its CEO and CFO, Consumers conducted an evaluation of the effectiveness of its internal control over financial reporting as of December 31, 2021. In making this evaluation, management used the criteria set forth in the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, Consumers’ management concluded that its internal control over financial reporting was effective as of December 31, 2021. The effectiveness of Consumers’ internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8. Financial Statements and Supplementary Data.

186

Changes in Internal Control Over Financial Reporting: There have not been any changes in Consumers’ internal control over financial reporting during the last fiscal quarter that have materially affected, or are reasonably likely to affect materially, its internal control over financial reporting.

Item 9B.    Other Information

None.

Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

Part III

Item 10.    Directors, Executive Officers and Corporate Governance

CMS Energy

Information that is required in Item 10 of this Form 10‑K regarding executive officers is included in the Item 1. Business—Information About CMS Energy’s and Consumers’ Executive Officers section, which is incorporated by reference herein.

Information that is required in Item 10 of this Form 10‑K regarding directors, executive officers, and corporate governance is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their 2022 Annual Meetings of Shareholders to be held May 6, 2022. The proxy statement will be filed with the SEC, pursuant to Regulation 14A under the Exchange Act, within 120 days after the end of the fiscal year covered by this Form 10‑K, all of which information is hereby incorporated by reference in, and made part of, this Form 10‑K.

Code of Ethics

CMS Energy has adopted an employee code of ethics, entitled “CMS Energy 2022 Code of Conduct and Guide to Ethical Business Behavior” (“Employee Code”) that applies to its CEO, CFO, and CAO, as well as all other officers and employees of CMS Energy and its affiliates. The Employee Code is administered by the Chief Compliance Officer of CMS Energy, who reports directly to the Audit Committee of the Board of Directors of CMS Energy. CMS Energy has also adopted a director code of ethics entitled “2022 Board of Directors Code of Conduct and Guide to Ethical Business Behavior” (“Director Code”) that applies to its directors. The Director Code is administered by the Audit Committee of the Board of Directors of CMS Energy. Any alleged violation of the Director Code by a director will be investigated by disinterested members of the Audit Committee of the Board of Directors of CMS Energy, or if none, by disinterested members of the entire Board of Directors of CMS Energy. The Employee Code and Director Code and any waivers of, or amendments or exceptions to, a provision of the Employee Code that applies to CMS Energy’s CEO, CFO, CAO or persons performing similar functions and any waivers of, or amendments or exceptions to, a provision of CMS Energy’s Director Code will be disclosed on CMS Energy’s website at www.cmsenergy.com/corporate-governance/compliance-and-ethics.

187

Consumers

Information that is required in Item 10 of this Form 10‑K regarding executive officers is included in the Item 1. Business—Information About CMS Energy’s and Consumers’ Executive Officers section, which is incorporated by reference herein.

Information that is required in Item 10 of this Form 10‑K regarding directors, executive officers, and corporate governance is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their 2022 Annual Meetings of Shareholders to be held May 6, 2022. The proxy statement will be filed with the SEC, pursuant to Regulation 14A under the Exchange Act, within 120 days after the end of the fiscal year covered by this Form 10‑K, all of which information is hereby incorporated by reference in, and made part of, this Form 10‑K.

Code of Ethics

Consumers has adopted an employee code of ethics, entitled “CMS Energy 2022 Code of Conduct and Guide to Ethical Business Behavior” (“Employee Code”) that applies to its CEO, CFO, and CAO, as well as all other officers and employees of Consumers and its affiliates. The Employee Code is administered by the Chief Compliance Officer of Consumers, who reports directly to the Audit Committee of the Board of Directors of Consumers. Consumers has also adopted a director code of ethics entitled “2022 Board of Directors Code of Conduct and Guide to Ethical Business Behavior” (“Director Code”) that applies to its directors. The Director Code is administered by the Audit Committee of the Board of Directors of Consumers. Any alleged violation of the Director Code by a director will be investigated by disinterested members of the Audit Committee of the Board of Directors of Consumers, or if none, by disinterested members of the entire Board of Directors of Consumers. The Employee Code and Director Code and any waivers of, or amendments or exceptions to, a provision of the Employee Code that applies to Consumers’ CEO, CFO, CAO or persons performing similar functions and any waivers of, or amendments or exceptions to, a provision of Consumers’ Director Code will be disclosed on Consumers’ website at www.cmsenergy.com/corporate-governance/compliance-and-ethics.

Item 11.    Executive Compensation

See the note below.

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Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Securities Authorized for Issuance Under Equity Compensation Plans

Presented in the following table is information regarding CMS Energy’s equity compensation plans as of December 31, 2021:

	(a)	(b)			(c)
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants, and rights	Weighted-average exercise price of outstanding options, warrants, and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plan approved by shareholders	—		$	—	5,927,297

Also see the note below.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

See the note below.

Item 14.    Principal Accountant Fees and Services

See the note below.

NOTE: Information that is required by Part III—Items 11, 12, 13, and 14 of this Form 10‑K is incorporated by reference from CMS Energy’s and Consumers’ definitive proxy statement for their 2022 Annual Meetings of Shareholders to be held May 6, 2022. The proxy statement will be filed with the SEC, pursuant to Regulation 14A under the Exchange Act, within 120 days after the end of the fiscal year covered by this Form 10‑K, all of which information is hereby incorporated by reference in, and made part of, this Form 10‑K.

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Part IV

Item 15.    Exhibits and Financial Statement Schedules

The following financial statements are filed as part of this report under Item 8. Financial Statements and Supplementary Data:

•Consolidated Statements of Income of CMS Energy for the years ended December 31, 2021, 2020, and 2019

•Consolidated Statements of Comprehensive Income of CMS Energy for the years ended December 31, 2021, 2020, and 2019

•Consolidated Statements of Cash Flows of CMS Energy for the years ended December 31, 2021, 2020, and 2019

•Consolidated Balance Sheets of CMS Energy at December 31, 2021 and 2020

•Consolidated Statements of Changes in Equity of CMS Energy for the years ended December 31, 2021, 2020, and 2019

•Consolidated Statements of Income of Consumers for the years ended December 31, 2021, 2020, and 2019

•Consolidated Statements of Comprehensive Income of Consumers for the years ended December 31, 2021, 2020, and 2019

•Consolidated Statements of Cash Flows of Consumers for the years ended December 31, 2021, 2020, and 2019

•Consolidated Balance Sheets of Consumers at December 31, 2021 and 2020

•Consolidated Statements of Changes in Equity of Consumers for the years ended December 31, 2021, 2020, and 2019

•Notes to the Consolidated Financial Statements

•Report of Independent Registered Public Accounting Firm for CMS Energy

•Report of Independent Registered Public Accounting Firm for Consumers

The following financial statement schedules are included below:

•Schedule I — Condensed Financial Information of Registrant, CMS Energy—Parent Company at December 31, 2021 and 2020 and for the years ended December 31, 2021, 2020, and 2019

•Schedule II — Valuation and Qualifying Accounts and Reserves of CMS Energy for the years ended December 31, 2021, 2020, and 2019

•Schedule II — Valuation and Qualifying Accounts and Reserves of Consumers for the years ended December 31, 2021, 2020, and 2019

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Schedule I — Condensed Financial Information of Registrant

CMS Energy—Parent Company

Condensed Statements of Income

In Millions
Years Ended December 31	2021			2020			2019
Operating Expenses
Other operating expenses		$	(7)		$	(6)		$	(38)
Total operating expenses		(7)			(6)			(38)
Operating Loss		(7)			(6)			(38)
Other Income (Expense)
Equity earnings of subsidiaries		1,482			909			826
Nonoperating retirement benefits, net		(1)			(1)			(1)
Interest income		1			1			1
Other income		1			1			1
Other expense		—			(19)			—
Total other income		1,483			891			827
Interest Charges
Interest on long-term debt		183			178			156
Intercompany interest expense and other		7			7			10
Total interest charges		190			185			166
Income Before Income Taxes		1,286			700			623
Income Tax Benefit		(60)			(55)			(57)
Income From Continuing Operations		1,346			755			680
Income From Discontinued Operations, Net of Tax of $(5), $—, and $—		7			—			—
Net Income Attributable to CMS Energy		1,353			755			680
Preferred Stock Dividends		5			—			—
Net Income Available to Common Stockholders		$	1,348		$	755		$	680

The accompanying notes are an integral part of these statements.

192

Schedule I — Condensed Financial Information of Registrant (Continued)

CMS Energy—Parent Company

Condensed Statements of Cash Flows

In Millions
Years Ended December 31	2021			2020			2019
Cash Flows from Operating Activities
Net cash provided by operating activities		$	1,549		$	507		$	697
Cash Flows from Investing Activities
Investment in subsidiaries		(581)			(657)			(683)
Increase in notes receivable – intercompany		(83)			(307)			—
Net cash used in investing activities		(664)			(964)			(683)
Cash Flows from Financing Activities
Proceeds from issuance of debt		—			1,225			1,158
Issuance of common stock		26			253			12
Issuance of preferred stock		224			—			—
Retirement of long-term debt		(200)			(425)			(738)
Debt prepayment costs		—			(16)			—
Payment of dividends on common and preferred stock		(507)			(465)			(434)
Debt issuance costs and financing fees		(10)			(10)			(18)
Change in notes payable – intercompany		(28)			(105)			6
Net cash provided by (used in) financing activities		(495)			457			(14)
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts		390			—			—
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period		—			—			—
Cash and Cash Equivalents, Including Restricted Amounts, End of Period		$	390		$	—		$	—

The accompanying notes are an integral part of these statements.

193

Schedule I — Condensed Financial Information of Registrant (Continued)

CMS Energy—Parent Company

Condensed Balance Sheets

ASSETS
In Millions
December 31	2021			2020
Current Assets
Cash and cash equivalents		$	390		$	—
Notes and accrued interest receivable – intercompany		463			358
Accounts receivable – intercompany and related parties		5			3
Accrued taxes		—			48
Prepayments and other current assets		1			1
Total current assets		859			410
Other Non‑current Assets
Deferred income taxes		147			91
Investments in subsidiaries		9,870			9,372
Other investments		6			5
Other		8			5
Total other non‑current assets		10,031			9,473
Total Assets		$	10,890		$	9,883

194

LIABILITIES AND EQUITY
In Millions
December 31	2021			2020
Current Liabilities
Current portion of long-term debt		$	—		$	200
Accounts and notes payable – intercompany		61			69
Accrued interest, including intercompany		33			33
Accrued taxes		83			—
Other current liabilities		8			9
Total current liabilities		185			311
Non‑current Liabilities
Long-term debt		3,928			3,926
Notes payable – intercompany		112			116
Postretirement benefits		19			21
Other non‑current liabilities		15			13
Total non‑current liabilities		4,074			4,076
Equity
Common stockholders’ equity		6,407			5,496
Preferred stock		224			—
Total equity		6,631			5,496
Total Liabilities and Equity		$	10,890		$	9,883

The accompanying notes are an integral part of these statements.

195

Schedule I — Condensed Financial Information of Registrant (Continued)

CMS Energy—Parent Company

Notes to the Condensed Financial Statements

1:    Basis of Presentation

CMS Energy’s condensed financial statements have been prepared on a parent-only basis. In accordance with Rule 12-04 of Regulation S-X, these parent-only financial statements do not include all of the information and notes required by GAAP for annual financial statements, and therefore these parent-only financial statements and other information included should be read in conjunction with CMS Energy’s audited consolidated financial statements contained within Item 8. Financial Statements and Supplementary Data.

2:    Guarantees

CMS Energy has issued guarantees with a maximum potential obligation of $633 million on behalf of some of its wholly owned subsidiaries and related parties. CMS Energy’s maximum potential obligation consists primarily of potential payments:

•to third parties under certain commodity purchase and swap agreements entered into with CMS ERM

•to third parties under certain agreements entered into with Grand River Wind, LLC, a wholly owned subsidiary of CMS Enterprises

•to EGLE on behalf of CMS Land and CMS Capital, for environmental remediation obligations at Bay Harbor

•to the U.S. Department of Energy on behalf of Consumers, in connection with Consumers’ 2011 settlement agreement with the U.S. Department of Energy regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers

•to a tax equity investor under certain agreements in connection with the purchase of a VIE

•to Regions Bank related to the sale of EnerBank

The expiry dates of these guarantees vary, depending upon contractual provisions or upon the statute of limitations under the relevant governing law.

3:    Note Payable—Intercompany

CMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028. This note payable is not recorded at fair value; however, its carrying value approximates fair value at December 31, 2021. This fair value measurement is classified in Level 3 within the fair value hierarchy.

196

4:    Preferred Stock

In 2021, CMS Energy issued 9.2 million depositary shares, each representing a 1/1,000th interest in a share of its cumulative Series C preferred stock, traded on the New York Stock Exchange under the symbol CMS PRC, at a price of $25.00 per depositary share. The transaction resulted in net proceeds of $224 million, which was used for general corporate purposes. Dividends on the preferred stock accumulate at an annual rate of 4.200 percent and are payable quarterly.

The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at a price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus accumulated and unpaid dividends, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation.

197

Schedule II — Valuation and Qualifying Accounts and Reserves

CMS Energy Corporation

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20
Deferred tax valuation allowance
2021		$	1		$	1		$	—		$	—		$	2
2020		2			—			—			1			1
2019		8			—			—			6			2

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

Consumers Energy Company

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

198

Exhibit Index

The agreements included as exhibits to this Form 10-K filing are included solely to provide information regarding the terms of the agreements and are not intended to provide any other factual or disclosure information about CMS Energy, Consumers, or other parties to the agreements. The agreements may contain representations and warranties made by each of the parties to each of the agreements that were made exclusively for the benefit of the parties involved in each of the agreements and should not be treated as statements of fact. The representations and warranties were made as a way to allocate risk if one or more of those statements prove to be incorrect. The statements were qualified by disclosures of the parties to each of the agreements that may not be reflected in each of the agreements. The agreements may apply standards of materiality that are different than standards applied to other investors. Additionally, the statements were made as of the date of the agreements or as specified in the agreements and have not been updated. The representations and warranties may not describe the actual state of affairs of the parties to each agreement.

Additional information about CMS Energy and Consumers may be found in this filing, at www.cmsenergy.com, at www.consumersenergy.com, and through the SEC’s website at www.sec.gov.

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
3.11	1-9513	3.1	—	Restated Articles of Incorporation of CMS Energy, effective June 1, 2004, as amended May 22, 2009, together with the Certificate of Designation of 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C, effective June 29, 2021 (Form 10‑Q for the quarterly period ended June 30, 2021)
3.21	1-9513	3.2	—	CMS Energy Bylaws, amended and restated effective February 8, 2016 (Form 8‑K filed February 8, 2016)
3.3	1-5611	3(c)	—	Restated Articles of Incorporation of Consumers effective June 7, 2000 (Form 10‑K for the fiscal year ended December 31, 2000)
3.4	1-5611	3.2	—	Consumers Bylaws, amended and restated as of January 24, 2013 (Form 8-K filed January 29, 2013)
4.1	2-65973	(b)(1)–4	—	Indenture dated as of September 1, 1945 between Consumers and Chemical Bank (successor to Manufacturers Hanover Trust Company), as Trustee, including therein indentures supplemental thereto through the Forty-third Supplemental Indenture dated as of May 1, 1979 (Form S-16 filed November 13, 1979)
				Indentures Supplemental thereto:
4.1.a	1-5611	4.2	—	104th dated as of 8/11/05 (Form 8-K filed August 11, 2005)
4.1.b	1-5611	4.1	—	112th dated as of 9/1/10 (Form 8-K filed September 7, 2010)
4.1.c	1-5611	4.1	—	113th dated as of 10/15/10 (Form 8-K filed October 20, 2010)
4.1.d	1-5611	4.1	—	114th dated as of 3/31/11 (Form 8-K filed April 6, 2011)
4.1.e	1-5611	4.1	—	116th dated as of 9/1/11 (Form 10-Q for the quarterly period ended September 30, 2011)
4.1.f	1-5611	4.1	—	120th dated as of 12/17/12 (Form 8-K filed December 20, 2012)
4.1.g	1-5611	4.1	—	121st dated as of 5/17/13 (Form 8-K filed May 17, 2013)

199

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
4.1.h	1-5611	4.1	—	122nd dated as of 8/9/13 (Form 8-K filed August 9, 2013)
4.1.i	1-5611	4.1	—	123rd dated as of 12/20/13 (Form 8-K filed December 27, 2013)
4.1.j	1-5611	4.1	—	124th dated as of 8/18/2014 (Form 8-K filed August 18, 2014)
4.1.k	1-5611	4.1	—	125th dated as of 11/6/2015 (Form 8-K filed November 6, 2015)
4.1.l	1-5611	4.1	—	126th dated as of 11/23/2015 (Form 8-K filed November 25, 2015)
4.1.m	1-5611	4.1	—	127th dated as of 8/10/16 (Form 8-K filed August 10, 2016)
4.1.n	1-5611	4.1	—	128th dated as of 2/22/17 (Form 8-K filed February 22, 2017)
4.1.o	1-5611	4.1	—	129th dated as of 9/28/17 (Form 8-K filed September 28, 2017)
4.1.p	1-5611	4.1	—	130th dated as of 11/15/17 (Form 8-K filed November 15, 2017)
4.1.q	1-5611	4.1	—	131st dated as of 5/14/18 (Form 8‑K filed May 14, 2018)
4.1.r	1-5611	4.1	—	132nd dated as of 6/5/18 (Form 8‑K filed June 5, 2018)
4.1.s	1-5611	4.1	—	133rd dated as of 10/1/18 (Form 8-K filed October 1, 2018)
4.1.t	1-5611	4.1	—	134th dated as of 11/13/18 (Form 8-K filed November 13, 2018)
4.1.u	1-5611	4.1	—	135th dated as of 5/28/19 (Form 8-K filed May 28, 2019)
4.1.v	1-5611	4.1	—	136th dated as of 9/3/19 (Form 8-K filed September 3, 2019)
4.1.w	1-5611	4.1	—	137th dated as of 9/19/19 (Form 8-K filed September 19, 2019)
4.1.x	1-5611	4.3	—	138th dated as of 10/1/19 (Form 10-Q for the quarterly period ended September 30, 2019)
4.1.y	1-5611	4.1	—	139th dated as of 3/26/20 (Form 8-K filed March 26, 2020)
4.1.z	1-5611	4.1	—	140th dated as of 5/13/20 (Form 8-K filed May 13, 2020)
4.1.aa	1-5611	4.1	—	141st dated as of 5/20/20 (Form 8-K filed May 20, 2020)
4.1.bb	1-5611	4.1	—	142nd dated as of 10/7/20 (Form 8-K filed October 7, 2020)
4.1.cc	1-5611	4.1	—	143rd dated as of 12/14/20 (Form 8-K filed December 14, 2020)
4.1.dd	1-5611	4.1	—	144th dated as of 8/12/21 (Form 8-K filed August 12, 2021)
4.2	1-5611	(4)(b)	—	Indenture dated as of January 1, 1996 between Consumers and The Bank of New York Mellon, as Trustee (Form 10-K for the fiscal year ended December 31, 1995)
4.3	1-5611	(4)(c)	—	Indenture dated as of February 1, 1998 between Consumers and The Bank of New York Mellon (formerly The Chase Manhattan Bank), as Trustee (Form 10-K for the fiscal year ended December 31, 1997)
4.41	33-47629	(4)(a)	—	Indenture dated as of September 15, 1992 between CMS Energy and NBD Bank, as Trustee (Form S-3 filed May 1, 1992)
				Indentures Supplemental thereto:
4.4.a1	1-9513	4.1	—	29th dated as of 3/22/13 (Form 8-K filed March 22, 2013)
4.4.b1	1-9513	4.1	—	30th dated as of 2/27/14 (Form 8-K filed February 27, 2014)
4.4.c1	1-9513	4.2	—	31st dated as of 2/27/14 (Form 8-K filed February 27, 2014)
4.4.d1	1-9513	4.1	—	32nd dated as of 11/9/15 (Form 8-K filed November 9, 2015)
4.4.e1	1-9513	4.1	—	33rd dated as of 5/5/16 (Form 8-K filed May 5, 2016)
4.4.f1	1-9513	4.1	—	34th dated as of 11/3/16 (Form 8-K filed November 3, 2016)

200

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
4.4.g1	1-9513	4.1	—	35th dated as of 2/13/17 (Form 8-K filed February 13, 2017)
4.51	1-9513	(4a)	—	Indenture dated as of June 1, 1997 between CMS Energy and The Bank of New York Mellon, as Trustee (Form 8-K filed July 1, 1997)
				Indentures Supplemental thereto:
4.5.a1	1-9513	4.5.a	—	5th dated as of 2/13/18 (Form 10‑K for the fiscal year ended December 31, 2017)
4.5.b1	1-9513	4.1	—	6th dated as of 3/8/18 (Form 8-K filed March 8, 2018)
4.5.c1	1-9513	4.1	—	7th dated as of 9/26/18 (Form 8-K filed September 26, 2018)
4.5.d1	1-9513	4.1	—	8th dated as of 2/20/19 (Form 8-K filed February 20, 2019)
4.5.e1	1-9513	4.1	—	9th dated as of 5/28/20 (Form 8-K filed May 28, 2020)
4.5.f1	1-9513	4.1	—	10th dated as of 11/25/20 (Form 8-K filed November 25, 2020)
4.61			—	Description of CMS Energy Securities
4.7	1-5611	4.7	—	Description of Consumers Securities (Form 10-K for the fiscal year ended December 31, 2019)
4.81	1-9513	4.2	—	Deposit Agreement, dated as of July 1, 2021, among CMS Energy, Equiniti Trust Company, and the holders from time to time of the depositary receipts described therein, including Form of Depositary Receipt (Form 8-K filed July 1, 2021)
10.12	1-9513	10.1	—	CMS Energy 2020 Performance Incentive Stock Plan, effective June 1, 2020 (Form 8-K filed May 5, 2020)
10.22	1-9513	10.3	—	CMS Energy’s Deferred Salary Savings Plan, as amended and restated, effective January 1, 2019 (Form 10‑K for the fiscal year ended December 31, 2018)
10.32	1-9513	10.5	—	CMS Energy and Consumers Director’s Deferred Compensation Plan, effective as of November 30, 2007 (Form 10-K for the fiscal year ended December 31, 2014)
10.42	1-9513	10.6	—	Supplemental Executive Retirement Plan for Employees of CMS Energy/Consumers effective on January 1, 1982 and as amended effective April 1, 2011 (Form 10-Q for the quarterly period ended March 31, 2011)
10.52	1-9513	10.7	—	Defined Contribution Supplemental Executive Retirement Plan, as amended and restated, effective May 1, 2019 (Form 10-K for the fiscal year ended December 31, 2018)
10.62	1-9513	10.6	—	Form of Officer Separation Agreement as of January 2020 (Form 10-K for the fiscal year ended December 31, 2019)
10.71	1-9513	(10)(y)	—	Environmental Agreement dated as of June 1, 1990 made by CMS Energy to The Connecticut National Bank and Others (Form 10-K for the fiscal year ended December 31, 1990)
10.81,2	1-9513	(10)(a)	—	Form of Indemnification Agreement between CMS Energy and its Directors, effective as of November 1, 2007 (Form 10-Q for the quarterly period ended September 30, 2007)

201

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
10.92	1-5611	(10)(b)	—	Form of Indemnification Agreement between Consumers and its Directors, effective as of November 1, 2007 (Form 10-Q for the quarterly period ended September 30, 2007)
10.102			—	CMS Incentive Compensation Plan for CMS Energy and Consumers Officers as amended, effective as of January 27, 2022
10.112	1-9513	10.1	—	2016 Form of Change in Control Agreement (Form 8-K filed June 23, 2016)
10.122			—	Annual Employee Incentive Compensation Plan for Consumers as amended, effective as of January 27, 2022
10.131,2			—	Annual CMS Enterprises Employee Incentive Compensation Plan as amended, effective as of January 27, 2022
10.141	1-9513	10.1	—	$550 million Fourth Amended and Restated Revolving Credit Agreement dated as of June 5, 2018 among CMS Energy, the Banks, as defined therein, and Barclays, as Agent (Form 8‑K filed June 5, 2018)
10.14.a1	1-9513	10.2	—	Amendment No. 1, dated as of April 29, 2020, to $550 million Fourth Amended and Restated Revolving Credit Agreement dated as of June 5, 2018 among CMS Energy, the Banks, as defined therein, and Barclays, as Agent (Form 10-Q for the quarterly period ended June 30, 2020)
10.14.b1	1-9513	10.1	—	Description of the $550 million Fourth Amended and Restated Revolving Credit Agreement Extension (Form 8-K filed July 2, 2021)
10.15	1-5611	10.2	—	$850 million Fifth Amended and Restated Revolving Credit Agreement dated as of June 5, 2018 among Consumers, the Banks, as defined therein, and JPMorgan, as Agent (Form 8-K filed June 5, 2018)
10.15.a	1-5611	10.2	—	Description of the $850 million Fifth Amended and Restated Revolving Credit Agreement Extension (Form 8-K filed July 2, 2021)
10.16	1-5611	10.1	—	$250 million Amended and Restated Revolving Credit Agreement dated as of November 19, 2018 among Consumers, the Banks, as defined therein, and The Bank of Nova Scotia, as Agent (Form 8‑K filed November 20, 2018)
10.16.a	1-5611	10.1	—	Description of the Extension to the Amended and Restated $250 million Secured Revolving Credit Agreement (Form 8‑K filed November 19, 2019)
10.16.b	1-5611	10.1	—	Description of the Second Extension to the Amended and Restated $250 million Secured Revolving Credit Agreement (Form 8‑K filed November 19, 2020)
10.16.c	1-5611	10.1	—	Description of the Third Extension to the Amended and Restated $250 million Secured Revolving Credit Agreement (Form 8-K filed November 22, 2021)

202

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
10.172	1-9513	10.1	—	Consumers and other CMS Energy Companies Retired Executives Survivor Benefit Plan for Management/ Executive Employees, distributed July 1, 2011 (Form 10-Q for the quarterly period ended September 30, 2011)
10.18	1-5611	10.1	—	Form of Commercial Paper Dealer Agreement between Consumers, as Issuer, and the Dealer party thereto (Form 10-Q for the quarterly period ended September 30, 2014)
10.191	1-9513	10.1	—	Agreement and Plan of Merger dated June 7, 2021 by and among CMS Energy Corporation, EnerBank USA, and Regions Bank (Form 8-K filed June 8, 2021)
10.19.a1	1-9513	10.1	—	Amendment No. 1 dated as of August 9, 2021 to the Agreement and Plan of Merger, dated June 7, 2021, by and among CMS Energy, EnerBank USA and Regions Bank (Form 10-Q for the quarterly period ended September 30, 2021)
10.20	1-5611	10.1	—	Purchase and Sale Agreement dated June 21, 2021 by and among Consumers and New Covert Generating Company, LLC (Form 8-K filed June 23, 2021)
10.21	1-5611	10.2	—	Purchase and Sale Agreement dated June 21, 2021 by and among Consumers and Dearborn Industrial Generation, LLC, CMS Generation Michigan Power, LLC, and CMS Energy Resource Management Company (Form 8-K filed June 23, 2021)
21.1			—	Subsidiaries of CMS Energy and Consumers
23.1			—	Consent of PricewaterhouseCoopers LLP for CMS Energy
23.2			—	Consent of PricewaterhouseCoopers LLP for Consumers
31.1			—	CMS Energy’s certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2			—	CMS Energy’s certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3			—	Consumers’ certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4			—	Consumers’ certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1			—	CMS Energy’s certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2			—	Consumers’ certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.11	333-249643	99.1	—	CMS Energy Stock Purchase Plan, as amended and restated October 23, 2020 (Form S-3ASR filed October 23, 2020)

203

	Previously Filed
Exhibits	With File Number	As Exhibit Number		Description
101.INS			—	Inline XBRL Instance Document
101.SCH			—	Inline XBRL Taxonomy Extension Schema
101.CAL			—	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF			—	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB			—	Inline XBRL Taxonomy Extension Labels Linkbase
101.PRE			—	Inline XBRL Taxonomy Extension Presentation Linkbase
104			—	Cover Page Interactive Data File (the cover page XBRL tags are embedded in the Inline XBRL document)

1Obligations of CMS Energy or its subsidiaries, but not of Consumers.

2Management contract or compensatory plan or arrangement.

Exhibits that have been previously filed with the SEC, designated above, are incorporated herein by reference and made a part hereof.

Item 16.    Form 10-K Summary

None.

204

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, CMS Energy Corporation has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ Garrick J. Rochow
Name:	Garrick J. Rochow
Title:	President and Chief Executive Officer
Date:	February 10, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of CMS Energy Corporation and in the capacities indicated and on February 10, 2022.

/s/ Garrick J. Rochow	/s/ William D. Harvey
Garrick J. Rochow	William D. Harvey, Director
President, Chief Executive Officer, and Director
(Principal Executive Officer)
	/s/ John G. Russell
	John G. Russell, Director
/s/ Rejji P. Hayes
Rejji P. Hayes
Executive Vice President and Chief Financial Officer	/s/ Suzanne F. Shank
	Suzanne F. Shank, Director
(Principal Financial Officer)
	/s/ Myrna M. Soto
/s/ Scott B. McIntosh	Myrna M. Soto, Director
Scott B. McIntosh
Vice President, Controller, and Chief Accounting Officer
	/s/ John G. Sznewajs
(Controller)	John G. Sznewajs, Director
/s/ Jon E. Barfield	/s/ Ronald J. Tanski
Jon E. Barfield, Director	Ronald J. Tanski, Director
/s/ Deborah H. Butler	/s/ Laura H. Wright
Deborah H. Butler, Director	Laura H. Wright, Director
/s/ Kurt L. Darrow
Kurt L. Darrow, Director

205

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Consumers Energy Company has duly caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

/s/ Garrick J. Rochow
Name:	Garrick J. Rochow
Title:	President and Chief Executive Officer
Date:	February 10, 2022

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of Consumers Energy Company and in the capacities indicated and on February 10, 2022.

/s/ Garrick J. Rochow	/s/ William D. Harvey
Garrick J. Rochow	William D. Harvey, Director
President, Chief Executive Officer, and Director
(Principal Executive Officer)
	/s/ John G. Russell
	John G. Russell, Director
/s/ Rejji P. Hayes
Rejji P. Hayes
Executive Vice President and Chief Financial Officer	/s/ Suzanne F. Shank
	Suzanne F. Shank, Director
(Principal Financial Officer)
	/s/ Myrna M. Soto
/s/ Scott B. McIntosh	Myrna M. Soto, Director
Scott B. McIntosh
Vice President, Controller, and Chief Accounting Officer
	/s/ John G. Sznewajs
(Controller)	John G. Sznewajs, Director
/s/ Jon E. Barfield	/s/ Ronald J. Tanski
Jon E. Barfield, Director	Ronald J. Tanski, Director
/s/ Deborah H. Butler	/s/ Laura H. Wright
Deborah H. Butler, Director	Laura H. Wright, Director
/s/ Kurt L. Darrow
Kurt L. Darrow, Director

206

EX-4.6

Exhibit 4.6

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

The following description of the registrant's securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (the “Exchange Act”) is a summary and does not purport to be complete. The terms “CMS Energy”, “we”, “our” and “us” as used herein refer to CMS Energy Corporation and not any of its subsidiaries.

Description of Capital Stock

The following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to CMS Energy’s Restated Articles of Incorporation, as amended (the “CMS Energy Articles”).

Authorized Shares

The authorized capital stock of CMS Energy consists of:

•350 million shares of common stock, par value $0.01 per share (“CMS Energy Common Stock”); and

•10 million shares of preferred stock, par value $0.01 per share (“Preferred Stock”).

At January 14, 2022, CMS Energy had 289,760,265 shares of CMS Energy Common Stock and 9,200 shares of Preferred Stock issued and outstanding.

Common Stock

Dividend Rights and Policy; Restrictions on Dividends

Dividends on CMS Energy Common Stock are paid at the discretion of the board of directors of CMS Energy based primarily upon the earnings and financial condition of CMS Energy. Dividends are payable out of the assets of CMS Energy legally available therefor.

Dividends on capital stock of CMS Energy are limited by Michigan law to legally available assets of CMS Energy. Distributions on CMS Energy Common Stock may be subject to the rights of the holders, if any, of any issued and outstanding series of Preferred Stock.

Michigan law prohibits payment of a dividend or a repurchase of capital stock if, after giving it effect, a corporation would not be able to pay its debts as they become due in the usual course of business, or its total assets would be less than the sum of its total liabilities plus, unless the CMS Energy Articles provide otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution (including the rights of holders of preferred stock, if any).

Voting Rights

Each holder of CMS Energy Common Stock is entitled to one vote for each share of CMS Energy Common Stock held by such holder on each matter voted upon by the shareholders. Such right to vote is not cumulative. A majority of the votes cast by the holders of shares entitled to vote thereon is sufficient for the adoption of any question presented, except that certain provisions of the CMS Energy Articles relating to (i) the authorization, effectiveness or validity of a merger or consolidation of CMS Energy that would adversely affect the powers or special rights of CMS Energy Common Stock (either directly by amendment to the CMS Energy Articles or indirectly by requiring the holders of the CMS Energy Common Stock to accept or retain, in such merger or consolidation, anything other than shares of CMS Energy Common Stock or shares of the surviving or resulting corporation having, in either case, powers and special rights identical to those of the CMS Energy Common Stock prior to such merger or consolidation) require the vote or consent of the holders of a majority of all of the shares of CMS Energy Common Stock then outstanding, (ii) contested elections of directors require the vote of a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors and (iii) special shareholder meetings, the number of directors, vacancies on CMS Energy’s board of directors, the removal, indemnification and liability of CMS Energy’s board of directors and the requirements for amending these provisions may not be amended, altered, changed or repealed unless such amendment, alteration, change or repeal is approved by the affirmative vote of the holders of at least 75% of the outstanding shares entitled to vote thereon.

Under Michigan law, the approval of the holders of a majority of the outstanding shares of CMS Energy Common Stock would be necessary (1) to authorize, effect or validate the merger or consolidation of CMS Energy into or with any other corporation if such merger or consolidation would adversely affect the powers or special rights of CMS Energy Common Stock, and (2) to authorize any amendment to the CMS Energy Articles that would increase or decrease the aggregate number of authorized shares of CMS Energy Common Stock or alter or change the powers, preferences or special rights of the shares of CMS Energy Common Stock so as to affect them adversely. The effect of these provisions and the related provisions described in the prior paragraph may be to permit the holders of a majority of the outstanding shares of CMS Energy Common Stock to block any such merger or amendment that would adversely affect the powers or special rights of holders of such shares of CMS Energy Common Stock.

Preemptive Rights

The CMS Energy Articles provide that holders of CMS Energy Common Stock will have no preemptive rights to subscribe for or purchase any additional shares of the capital stock of CMS Energy of any class now or hereafter authorized, or any Preferred Stock, bonds, debentures or other obligations or rights or options convertible into or exchangeable for or entitling the holder or owner to subscribe for or purchase any shares of capital stock, or any rights to exchange shares issued for shares to be issued.

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Liquidation Rights

In the event of the dissolution, liquidation or winding up of CMS Energy, whether voluntary or involuntary, after payment or provision for payment of the debts and other liabilities of CMS Energy and after there shall have been paid or set apart for the holders of Preferred Stock the full preferential amounts (including any accumulated and unpaid dividends) to which they are entitled, the holders of CMS Energy Common Stock will be entitled to receive, on a per share basis, the assets of CMS Energy remaining for distribution to the holders of CMS Energy Common Stock. Neither the merger or consolidation of CMS Energy into or with any other corporation, nor the merger or consolidation of any other corporation into or with CMS Energy nor any sale, transfer or lease of all or any part of the assets of CMS Energy, shall be deemed to be a dissolution, liquidation or winding up for the purposes of this provision.

Subdivision or Combination

If CMS Energy subdivides (by stock split, stock dividend or otherwise) or combines (by reverse stock split or otherwise) the outstanding shares of CMS Energy Common Stock, the voting and liquidation rights of shares of CMS Energy Common Stock will be appropriately adjusted so as to avoid any dilution in aggregate voting or liquidation rights.

Transfer Agent and Registrar

The transfer agent and registrar for CMS Energy Common Stock is Equiniti Trust Company d/b/a EQ Shareowner Services.

Listing

CMS Energy Common Stock is listed on the New York Stock Exchange and trades under the symbol “CMS.”

Exchanges

The CMS Energy Articles do not provide for either the mandatory or optional exchange or redemption of CMS Energy Common Stock.

Preferred Stock

The authorized Preferred Stock may be issued without the approval of the holders of CMS Energy Common Stock in one or more series, from time to time, with each such series to have such designation, powers, preferences and relative, participating, optional or other special rights, voting rights, if any, and qualifications, limitations or restrictions thereof, as shall be stated in a resolution providing for the issue of any such series adopted by CMS Energy’s board of directors. The CMS Energy Articles provide that holders of Preferred Stock will not have any preemptive rights to subscribe for or purchase any additional shares of the capital stock of CMS Energy of any class now or hereafter authorized, or any Preferred Stock, bonds, debentures or other obligations or rights or options convertible into or exchangeable for or entitling the holder

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or owner to subscribe for or purchase any shares of capital stock, or any rights to exchange shares issued for shares to be issued. The future issuance of Preferred Stock may have the effect of delaying, deterring or preventing a change in control of CMS Energy. Shares of Preferred Stock may be offered either separately or represented by depositary shares.

CMS Energy has designated a series of its Preferred Stock titled 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C (the “Series C Preferred Stock”), initially consisting of 9,200 shares ($230,000,000 aggregate liquidation preference). The following description summarizes certain terms and provisions of the Series C Preferred Stock, and is subject to and qualified in its entirety by reference to the certificate of designation creating the Series C Preferred Stock (the “Series C Certificate of Designation”).

Ranking

The Series C Preferred Stock ranks, with respect to dividend rights and distribution rights upon CMS Energy’s liquidation, winding-up or dissolution:

•senior to CMS Energy Common Stock and each other class or series of CMS Energy’s capital stock established after the original issue date of the Series C Preferred Stock, or July 1, 2021 (the “Initial Issue Date”), the terms of which do not expressly provide that such class or series will rank senior to or on parity with the Series C Preferred Stock as to dividend rights and distribution rights upon CMS Energy’s liquidation, winding-up or dissolution (the “Junior Stock”);

•on parity with each class or series of CMS Energy’s capital stock established after the Initial Issue Date the terms of which expressly provide that such class or series will rank on parity with the Series C Preferred Stock as to dividend rights and distribution rights upon CMS Energy’s liquidation, winding-up or dissolution (the “Parity Stock”);

•junior to each class or series of CMS Energy’s capital stock established after the Initial Issue Date the terms of which expressly provide that such class or series will rank senior to the Series C Preferred Stock as to dividend rights and distribution rights upon CMS Energy’s liquidation, winding-up or dissolution (the “Senior Stock”);

•junior to CMS Energy’s existing and future indebtedness and other liabilities; and

•structurally subordinated to all existing and future indebtedness and other liabilities of CMS Energy’s subsidiaries and capital stock of CMS Energy’s subsidiaries held by third parties, which means that creditors of CMS Energy’s subsidiaries and any third parties holding capital stock of CMS Energy’s subsidiaries will be paid from the assets of such subsidiaries before holders of the Series C Preferred Stock would have any claims to those assets.

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Dividends

Subject to the rights of holders of any class or series of CMS Energy’s capital stock ranking senior to the Series C Preferred Stock with respect to dividends, holders of the Series C Preferred Stock are entitled to receive, when, as and if declared by CMS Energy’s board of directors, or an authorized committee thereof, out of funds legally available for payment, cash dividends at the rate per annum of 4.200% on the $25,000 liquidation preference per share of Series C Preferred Stock. Declared dividends on the Series C Preferred Stock are payable in arrears on January 15, April 15, July 15 and October 15 of each year, commencing on October 15, 2021 (each, a “Dividend Payment Date”). Dividends on the Series C Preferred Stock accumulate daily from and including the most recent date as to which dividends have been paid or, if no dividends have been paid, from the Initial Issue Date, without regard to whether funds are legally available for the declaration or payment of such dividends. Declared dividends are payable on the relevant Dividend Payment Date to holders of record of the Series C Preferred Stock as they appear on CMS Energy’s stock register at the close of business on the immediately preceding January 1, April 1, July 1 or October 1, as applicable (each, a “Record Date”). These Record Dates will apply regardless of whether a particular Record Date is a business day. If a Dividend Payment Date is not a business day, payment of declared dividends will be made on the next succeeding business day, without any interest, additional dividends, or other payment in lieu of interest or additional dividends accumulating with respect to this delay.

A “Dividend Period” is the period from, and including, a Dividend Payment Date to, but excluding, the next Dividend Payment Date, except that the initial Dividend Period commenced on, and included, the Initial Issue Date. Dividends accumulating or payable on the Series C Preferred Stock for any Dividend Period (or portion thereof) are calculated on the basis of a 360-day year consisting of twelve 30-day months. Accumulations of dividends on shares of the Series C Preferred Stock do not bear interest or dividends on such accumulated amount.

Dividends on the Series C Preferred Stock accumulate (i) whether or not CMS Energy has earnings, (ii) whether or not the declaration or payment of such dividends would then be permitted under Michigan law, (iii) whether or not such dividends are declared and (iv) whether or not any agreements to which CMS Energy is a party prohibit the current declaration or payment of dividends, including any agreement relating to indebtedness. Accordingly, if CMS Energy’s board of directors, or an authorized committee thereof, does not declare a dividend on the Series C Preferred Stock payable in respect of any Dividend Period before the related Dividend Payment Date, such dividend will accumulate and an amount equal to such accumulated dividend will become payable out of funds legally available therefor upon CMS Energy’s liquidation, winding-up or dissolution (or earlier repurchase or redemption of such shares of Series C Preferred Stock), to the extent not paid prior to such liquidation, winding-up or dissolution or earlier repurchase or redemption, as the case may be.

No dividend will be declared or paid on, or any sum of cash set aside for the payment of dividends on, any outstanding shares of Series C Preferred Stock with respect to any Dividend Period unless all dividends for all preceding Dividend Periods have been declared and paid on, or

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a sufficient sum of cash has been set aside for the payment of such dividends on, all outstanding shares of Series C Preferred Stock.

So long as any share of the Series C Preferred Stock remains outstanding, no dividend or distribution will be declared or paid on CMS Energy Common Stock or any other Junior Stock, and no CMS Energy Common Stock or any other Junior Stock will be repurchased, redeemed or otherwise acquired for consideration by CMS Energy or any of its subsidiaries unless, in each case, all accumulated and unpaid dividends for all preceding Dividend Periods have been declared and paid, or a sufficient sum of cash has been set aside for the payment of such dividends, on all outstanding shares of the Series C Preferred Stock. The foregoing limitation does not apply to: (i) any dividend or distribution payable in shares of CMS Energy Common Stock or other Junior Stock, together with cash in lieu of any fractional share; (ii) repurchases, redemptions or other acquisitions of CMS Energy Common Stock or other Junior Stock in connection with the administration of any benefit or other incentive plan, including any employment contract, including, without limitation, (x) purchases to offset the share dilution amount pursuant to a publicly announced repurchase plan, provided that any purchases to offset the share dilution amount shall in no event exceed the share dilution amount, (y) the forfeiture of unvested shares of restricted stock or share withholdings or other surrender of shares to which the holder may otherwise be entitled upon exercise, delivery or vesting of equity awards (whether in payment of applicable taxes, the exercise price or otherwise), and (z) the payment of cash in lieu of fractional shares; (iii) purchases of fractional interests in shares of any CMS Energy Common Stock or other Junior Stock pursuant to the conversion or exchange provisions of such shares of other Junior Stock or any securities exchangeable for or convertible into shares of CMS Energy Common Stock or other Junior Stock; (iv) any dividends or distributions of rights or CMS Energy Common Stock or other Junior Stock in connection with a shareholders’ rights plan or any redemption or repurchase of rights pursuant to any shareholders’ rights plan; (v) repurchases of CMS Energy Common Stock or other Junior Stock pursuant to a contractually binding requirement to buy CMS Energy Common Stock or other Junior Stock existing prior to the preceding Dividend Period, including under a contractually binding stock repurchase plan; (vi) the deemed purchase or acquisition of fractional interests in shares of CMS Energy Common Stock or other Junior Stock pursuant to the conversion or exchange provisions of such shares or the security being converted or exchanged; (vii) the acquisition by CMS Energy or any of its subsidiaries of record ownership in CMS Energy Common Stock or other Junior Stock for the beneficial ownership of any other persons (other than CMS Energy or any of its subsidiaries), including as trustees or custodians, and the payment of cash in lieu of fractional shares; and (viii) the exchange or conversion of Junior Stock for or into other Junior Stock and the payment of cash in lieu of fractional shares.

When dividends on shares of the Series C Preferred Stock with respect to any previously completed Dividend Period (A) have not been declared and paid in full or (B) have been declared but a sum of cash sufficient for payment thereof has not been set aside for the benefit of the holders thereof on the applicable Record Date, no dividends may be declared or paid on any Parity Stock unless dividends are declared on the shares of Series C Preferred Stock such that the respective amounts of such dividends declared on the shares of Series C Preferred Stock and such Parity Stock will bear the same ratio to each other as all accumulated dividends and all

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declared and unpaid dividends per share on the shares of Series C Preferred Stock and such Parity Stock bear to each other; provided, however, that any unpaid dividends will continue to accumulate. The foregoing limitation will not apply to (i) purchases of fractional interests in shares of Parity Stock pursuant to the conversion or exchange provisions of such shares of Parity Stock or any securities exchangeable for or convertible into shares of Parity Stock, (ii) the deemed purchase or acquisition of fractional interests in shares of Parity Stock pursuant to the conversion or exchange provisions of such shares or the security being converted or exchanged, (iii) the acquisition by CMS Energy or any of its subsidiaries of record ownership in Parity Stock for the beneficial ownership of any other persons (other than for CMS Energy or any of its subsidiaries), including as trustees or custodians, and the payment of cash in lieu of fractional shares, and (iv) the exchange or conversion of Parity Stock for or into other Parity Stock (with the same or lesser aggregate liquidation amount) or Junior Stock and the payment of cash in lieu of fractional shares.

Liquidation, Winding-Up or Dissolution

In the event of CMS Energy’s voluntary or involuntary liquidation, winding-up or dissolution, each holder of the Series C Preferred Stock will be entitled to receive a liquidation preference in the amount of $25,000 per share of Series C Preferred Stock (the “Series C Liquidation Preference”) (equivalent to $25.00 per depositary share), plus an amount (the “Series C Liquidation Dividend Amount”) equal to accumulated and unpaid dividends (whether or not declared) on such shares to, but excluding, the date fixed for liquidation, winding-up or dissolution, to be paid out of CMS Energy’s assets legally available for distribution to shareholders, after payment or provision for CMS Energy’s debts, obligations and liabilities, including debt and other liabilities owed to creditors, as required by applicable law, and to holders of shares of any class or series of CMS Energy’s capital stock ranking senior to the Series C Preferred Stock with respect to distribution rights upon CMS Energy’s liquidation, winding-up or dissolution and before any payment or distribution is made to holders of any Junior Stock (including, without limitation, CMS Energy Common Stock).

The Series C Liquidation Preference is subject to equitable adjustment whenever there shall occur a stock split, combination, reclassification or other similar event involving the Series C Preferred Stock. Any such adjustment will be determined in good faith by CMS Energy’s board of directors, or an authorized committee thereof, and submitted by CMS Energy’s board of directors, or such authorized committee thereof, to the transfer agent.

If, upon CMS Energy’s voluntary or involuntary liquidation, winding-up or dissolution, the amounts payable with respect to (i) the Series C Liquidation Preference plus the Series C Liquidation Dividend Amount on the shares of Series C Preferred Stock and (ii) the liquidation preference of, and the amount of accumulated and unpaid dividends (to, but excluding, the date fixed for such liquidation, winding-up or dissolution) on, all other Parity Stock are not paid in full, the holders of the Series C Preferred Stock and all holders of any such other Parity Stock will share equally and ratably in any distribution of CMS Energy’s assets in proportion to their respective liquidation preferences and amounts equal to the accumulated and unpaid dividends to which they are entitled.

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After the payment to any holder of Series C Preferred Stock of the full amount of the Series C Liquidation Preference and the Series C Liquidation Dividend Amount for each of such holder’s shares of Series C Preferred Stock, such holder of Series C Preferred Stock will have no right or claim to any of CMS Energy’s remaining assets.

Neither the sale, lease or exchange of all or substantially all of CMS Energy’s assets, nor CMS Energy’s merger or consolidation into or with any other person or entity, will be deemed to be CMS Energy’s voluntary or involuntary liquidation, winding-up or dissolution.

The CMS Energy Articles, including the Series C Certificate of Designation, do not contain any provision requiring funds to be set aside to protect the Series C Liquidation Preference or the Series C Liquidation Dividend Amount.

Optional Redemption

CMS Energy may, at its option, redeem the Series C Preferred Stock:

•in whole or in part, from time to time, on or after July 15, 2026 at a redemption price in cash equal to $25,000 per share of Series C Preferred Stock (equivalent to $25.00 per depositary share); or

•in whole but not in part, at any time within 120 days after the conclusion of any review or appeal process instituted by CMS Energy following the occurrence of a Ratings Event (as defined herein), or, if no review or appeal process is available or sought with respect to such Ratings Event, at any time within 120 days after the occurrence of such Ratings Event, at a redemption price in cash equal to $25,500 per share of Series C Preferred Stock (102% of the liquidation preference of $25,000 per share) (equivalent to $25.50 per depositary share),

plus, in each case, all accumulated and unpaid dividends (whether or not declared) to, but excluding, the redemption date; provided that, notwithstanding the foregoing, if a redemption date for any shares of Series C Preferred Stock occurs subsequent to a Record Date and on or prior to the next succeeding Dividend Payment Date, then the full amount of accumulated and unpaid dividends (whether or not declared) on such shares of Series C Preferred Stock to, but excluding, such Dividend Payment Date will be paid on such Dividend Payment Date to the persons who were the holders of record of such shares at the close of business on such Record Date and such accumulated and unpaid dividends will not be paid or required to be paid on the redemption date and will not constitute a part of the redemption price of such shares.

The redemption price is subject to equitable adjustment whenever there shall occur a stock split, combination, reclassification or other similar event involving the Series C Preferred Stock. Any such adjustment will be determined in good faith by CMS Energy’s board of directors, or an authorized committee thereof, and submitted by CMS Energy’s board of directors, or such authorized committee thereof, to the transfer agent.

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“Ratings Event” means that, and will be deemed to have occurred when, any nationally recognized statistical rating organization as defined in Section 3(a)(62) of the Exchange Act, or in any successor provision thereto, that then publishes a rating for CMS Energy (referred to herein as a Rating Agency) amends, clarifies or changes the criteria it uses to assign equity credit to securities such as the Series C Preferred Stock, which amendment, clarification or change results in:

•the shortening of the length of time the Series C Preferred Stock is assigned a particular level of equity credit by that Rating Agency as compared to the length of time the Series C Preferred Stock would have been assigned that level of equity credit by that Rating Agency or its predecessor on the Initial Issue Date; or

•the lowering of the equity credit (including up to a lesser amount) assigned to the Series C Preferred Stock by that Rating Agency as compared to the equity credit assigned by that Rating Agency or its predecessor on the Initial Issue Date.

Voting Rights

Holders of the Series C Preferred Stock do not have any voting rights except as described below and as otherwise from time to time specifically required by Michigan law. Without limitation to the foregoing, but subject to any limits and restrictions stated in the CMS Energy Articles, no vote or consent of the holders of the Series C Preferred Stock or the depositary shares will be required for the issuance of any additional shares of Series C Preferred Stock not exceeding the aggregate number of shares authorized in the Series C Certificate of Designation or related depositary shares.

Whenever dividends on any shares of the Series C Preferred Stock or any other class or series of Preferred Stock that ranks on parity with the Series C Preferred Stock as to payment of dividends, and upon which similar voting rights have been conferred and are exercisable, have not been declared and paid for the equivalent of six quarterly dividend payments, whether or not for consecutive Dividend Periods (a “Nonpayment Event”), the holders of the Series C Preferred Stock (voting as a single class together with holders of any and all other classes of authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) will be entitled to vote as a single class for the election of a total of two additional members of CMS Energy’s board of directors (the “Preferred Directors”), provided that CMS Energy’s board of directors will at no time include more than two Preferred Directors. In that event, the number of directors on CMS Energy’s board of directors will automatically increase by two and, at the request of any holder of Series C Preferred Stock or other Preferred Stock with equivalent voting rights, a special meeting of the holders of Series C Preferred Stock and any other class or series of Preferred Stock that ranks on parity with Series C Preferred Stock as to payment of dividends and for which dividends have not been paid will be called for the election of the two directors (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the shareholders, in which event such election will be held

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at such next annual or special meeting of shareholders), followed by such election at each subsequent annual meeting. These voting rights will continue until full dividends have been paid regularly on the shares of the Series C Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series C Preferred Stock as to payment of dividends for at least four consecutive quarterly Dividend Periods or their equivalent following the Nonpayment Event.

If and when full dividends have been paid regularly on the Series C Preferred Stock and any other class or series of Preferred Stock that ranks on parity with the Series C Preferred Stock as to payment of dividends for at least four consecutive quarterly Dividend Periods or their equivalent following a Nonpayment Event, the holders of the Series C Preferred Stock will be divested of the foregoing voting rights (subject to revesting in the event of each subsequent Nonpayment Event) and the term of office of each Preferred Director so elected will terminate and the number of directors on CMS Energy’s board of directors will automatically decrease by two. Any Preferred Director may be removed at any time without cause by the holders of record of a majority of the outstanding shares of the Series C Preferred Stock (together with holders of any and all other classes of authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) when they have the voting rights described above. So long as a Nonpayment Event continues, any vacancy in the office of a Preferred Director (other than prior to the initial election of the Preferred Directors) may be filled by the written consent of the Preferred Director remaining in office or, if none remains in office, by a vote of the holders of the outstanding shares of Series C Preferred Stock (together with holders of any and all other class of authorized Preferred Stock having equivalent voting rights, whether or not the holders of such Preferred Stock would be entitled to vote for the election of directors if such default in dividends did not exist) to serve until the next annual meeting of shareholders. The Preferred Directors will each be entitled to one vote per director on any matter.

So long as any shares of the Series C Preferred Stock are outstanding, in addition to any other vote or consent of shareholders required by law or by the CMS Energy Articles, the affirmative vote or consent of the holders of not less than two-thirds of the total stated liquidation preference (excluding accumulated and unpaid dividends thereon, and premiums or other similar amounts, if any) of all outstanding shares of Series C Preferred Stock and all outstanding shares of any other series of Voting Preferred Stock (as defined herein) at the time outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or by vote at an annual or special meeting of such shareholders, will be necessary for CMS Energy to effect:

(1)    any amendment of the CMS Energy Articles, including the Series C Certificate of Designation, so as to authorize, or increase the authorized amount of, any class or series of Senior Stock;

(2)    any amendment of any provision of the CMS Energy Articles, other than the Series C Certificate of Designation, so as to adversely affect the special rights, preferences, privileges, restrictions, or voting powers of the Series C Preferred Stock; or

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(3)    any consummation of a binding share exchange or reclassification involving the shares of the Series C Preferred Stock, or of a merger or consolidation of CMS Energy with or into another entity, unless in each case: (i) the shares of the Series C Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which CMS Energy is not the surviving or resulting entity (or the Series C Preferred Stock is otherwise exchanged or reclassified), are converted or reclassified into or exchanged for preferred stock of the surviving or resulting entity or its ultimate parent; and (ii) the shares of the Series C Preferred Stock that remain outstanding or such shares of preferred stock, as the case may be, have rights, preferences, privileges and voting powers that, taken as a whole, are not materially less favorable to the holders thereof than the rights, preferences, privileges and voting powers, taken as a whole, of the Series C Preferred Stock immediately prior to the consummation of such transaction;

provided, however, that, for the avoidance of doubt, (1) any increase in the amount of CMS Energy’s authorized but unissued shares of Preferred Stock, (2) any increase in the amount of the authorized Series C Preferred Stock or the issuance of any additional shares of the Series C Preferred Stock or related depositary shares or (3) the authorization or creation of any class or series of Parity Stock or Junior Stock, any increase in the amount of authorized but unissued shares of such class or series of Parity Stock or Junior Stock or the issuance of any shares of such class or series of Parity Stock or Junior Stock will be deemed not to adversely affect (or to otherwise cause to be materially less favorable) the rights, preferences, privileges, restrictions or voting powers of the Series C Preferred Stock and will not require the affirmative vote or consent of holders of the Series C Preferred Stock except as required pursuant to Michigan law.

If any amendment, share exchange, reclassification, merger or consolidation described above would adversely affect (or cause to be materially less favorable, as applicable) the rights, preferences, privileges, restrictions or voting powers of one or more but not all series of Voting Preferred Stock, then only the series of Voting Preferred Stock adversely affected (or the terms of which would be materially less favorable, as applicable) and entitled to vote will vote as a class in lieu of all other series of Voting Preferred Stock. “Voting Preferred Stock” means any series of Preferred Stock, other than the Series C Preferred Stock, ranking equally with the Series C Preferred Stock either as to dividends or to the distribution of assets upon CMS Energy’s liquidation, dissolution or winding-up and upon which voting rights similar to the voting rights of the Series C Preferred Stock in all material respects have been established for such series of Preferred Stock and which are exercisable at the time of any vote of the Preferred Stock.

Without the consent of the holders of the Series C Preferred Stock and related depositary shares, to the fullest extent permitted by applicable law and so long as such action does not adversely affect the special rights, preferences, privileges, restrictions or voting powers of the Series C Preferred Stock and related depositary shares, CMS Energy may amend, alter, supplement or repeal any terms of the Series C Preferred Stock, including by way of amendment to the Series C Certificate of Designation, for the following purposes:

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•to cure any ambiguity or mistake, or to correct or supplement any provision contained in the Series C Certificate of Designation that may be defective or inconsistent with any other provision contained in such Series C Certificate of Designation;

•to make any provision with respect to matters or questions relating to the Series C Preferred Stock that is not inconsistent with the provisions of the CMS Energy Articles, including the Series C Certificate of Designation; or

•to waive any of CMS Energy’s rights with respect thereto.

In addition, without the consent of the holders of the Series C Preferred Stock or related depositary shares, to the fullest extent permitted by applicable law, CMS Energy may amend, alter, supplement or repeal any terms of the Series C Preferred Stock, including by way of amendment to the Series C Certificate of Designation, in order to conform the terms thereof to the description of the terms of the Series C Preferred Stock set forth under “Certain Terms of the Series C Preferred Stock” in the prospectus supplement related to the offering of the Series C Preferred Stock.

Maturity and Other Provisions

The Series C Preferred Stock is perpetual and does not have a maturity date.

The Series C Preferred Stock is not subject to any mandatory sinking fund, retirement fund, purchase fund or other similar provisions. CMS Energy is not required to repurchase or redeem, or set aside funds to repurchase or redeem, the Series C Preferred Stock. Accordingly, the shares of the Series C Preferred Stock will remain outstanding indefinitely unless and until CMS Energy decides to repurchase or redeem them, whether in whole or in part.

The Series C Preferred Stock is not convertible into, or exchangeable for, shares of any other classes or series of capital stock or other securities. The holders of the Series C Preferred Stock have no preemptive or preferential rights to purchase or subscribe for capital stock, obligations, warrants or other securities of any class or series.

Transfer Agent and Registrar

The transfer agent and registrar for the Series C Preferred Stock is Equiniti Trust Company d/b/a EQ Shareowner Services.

Depositary Shares

The following description summarizes certain terms and provisions of the depositary shares relating to the Series C Preferred Stock, and is subject to and qualified in its entirety by reference to the deposit agreement, dated as of July 1, 2021 (the “Deposit Agreement”), among CMS Energy, Equiniti Trust Company d/b/a EQ Shareowner Services, as depositary, and the holders

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from time to time of the depositary receipts evidencing the depositary shares, and the form of depositary receipts, which contain the terms and provisions of the depositary shares.

General

CMS Energy’s depositary shares represent proportional fractional interests in shares of the Series C Preferred Stock. Each depositary share represents a 1/1,000th interest in a share of Series C Preferred Stock, and is evidenced by a depositary receipt. The shares of Series C Preferred Stock represented by depositary shares are deposited under the Deposit Agreement. Subject to the terms of the Deposit Agreement, each holder of a depositary share is entitled, through the depositary, in proportion to the applicable fraction of a share of Series C Preferred Stock represented by such depositary share, to all the rights and preferences of the Series C Preferred Stock represented thereby (including dividend, voting, redemption and liquidation rights).

Dividends and Other Distributions

The depositary will distribute any cash dividends or other cash distributions received in respect of the deposited Series C Preferred Stock to the record holders of depositary shares relating to the underlying Series C Preferred Stock in proportion to the number of depositary shares held by such holders. The depositary will distribute any property received by it other than cash to the record holders of depositary shares entitled to those distributions, unless it determines that the distribution cannot be made proportionally among those holders or that it is not feasible to make a distribution. In that event, the depositary may, with CMS Energy’s approval, sell the property and distribute the net proceeds from the sale to the holders of the depositary shares in proportion to the number of depositary shares they hold.

Record dates for the payment of dividends and other matters relating to the depositary shares will be the same as the corresponding Record Dates for the Series C Preferred Stock. The amounts distributed to holders of depositary shares will be reduced by any amounts required to be withheld by the depositary or by CMS Energy on account of taxes or other governmental charges.

Redemption of Depositary Shares

If CMS Energy redeems the Series C Preferred Stock represented by the depositary shares, the depositary shares will be redeemed from the proceeds received by the depositary resulting from the redemption of the Series C Preferred Stock held by the depositary. The redemption price per depositary share will be equal to 1/1,000th of the redemption price per share payable with respect to the Series C Preferred Stock, plus all accumulated and unpaid dividends (whether or not declared) to, but excluding, the applicable redemption date. Whenever CMS Energy redeems shares of Series C Preferred Stock held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing an interest in shares of Series C Preferred Stock so redeemed.

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In case of any redemption of less than all of the outstanding depositary shares, the depositary shares to be redeemed will be selected by the depositary pro rata or in such other manner determined by the depositary to be equitable. In any such case, CMS Energy will redeem depositary shares only in increments of 1,000 shares and any multiple thereof.

The depositary will mail (or otherwise transmit by an authorized method) notice of redemption to holders of the depositary shares not less than 30 days, nor more than 60 days, prior to the date fixed for redemption of the Series C Preferred Stock and the depositary shares.

Voting the Series C Preferred Stock

When the depositary receives notice of any meeting at which the holders of the Series C Preferred Stock are entitled to vote, the depositary will deliver the information contained in the notice to the record holders of the depositary shares relating to the Series C Preferred Stock. Each record holder of the depositary shares on the record date, which will be the same date as the Record Date for the Series C Preferred Stock, may instruct the depositary to vote the amount of the Series C Preferred Stock represented by the holder’s depositary shares. To the extent possible, the depositary will vote the amount of the Series C Preferred Stock represented by depositary shares in accordance with the instructions it receives. CMS Energy agrees to take all reasonable actions that the depositary determines are necessary to enable the depositary to vote as instructed. If the depositary does not receive specific instructions from the holders of any depositary shares representing an interest in the Series C Preferred Stock, it will vote all depositary shares of that series held by it proportionately with instructions received.

Amendment and Termination of the Deposit Agreement

The form of depositary receipt evidencing the depositary shares and any provision of the Deposit Agreement may be amended by agreement between CMS Energy and the depositary. However, any amendment that materially and adversely alters the rights of the existing holders of depositary shares or would be materially and adversely inconsistent with the rights of holders of the Series C Preferred Stock will not be effective unless such amendment has been approved by the record holders of depositary shares representing at least the amount of the depositary shares then outstanding necessary to approve any amendment that would alter or abrogate the special rights of the Series C Preferred Stock. CMS Energy may terminate the Deposit Agreement with the consent of holders of a majority of then outstanding depositary shares. The Deposit Agreement will automatically terminate if all outstanding depositary shares have been redeemed or if there has been made a final distribution in respect of the Series C Preferred Stock in connection with CMS Energy’s liquidation, dissolution or winding-up, and such distribution has been made to the holders of depositary shares.

Listing

The depositary shares are listed on the New York Stock Exchange and trade under the symbol “CMSPRC.”

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Primary Source of Funds of CMS Energy; Restrictions on Sources of Dividends

The ability of CMS Energy to pay (i) dividends on its capital stock and (ii) its indebtedness, including the CMS Energy debt securities, depends and will depend substantially upon timely receipt of sufficient dividends or other distributions from its subsidiaries, in particular Consumers Energy Company (“Consumers”) and CMS Enterprises Company (“Enterprises”). Each of Consumers’ and Enterprises’ ability to pay dividends on its common stock depends upon its revenues, earnings and other factors. Consumers’ revenues and earnings will depend substantially upon rates authorized by the Michigan Public Service Commission.

CMS Energy has pledged the common stock of Consumers as security for certain bank credit facilities. Consumers’ Restated Articles of Incorporation (the “Consumers Articles”) provide two restrictions on its payment of dividends on its common stock. First, prior to the payment of any common stock dividend, Consumers must reserve retained earnings after giving effect to such dividend payment of at least:

•$7.50 per share on all then outstanding shares of its preferred stock; and

•$7.50 per share on all then outstanding shares of all other stock over which its preferred stock do not have preference as to the payment of dividends and as to assets.

Second, dividend payments during the 12-month period ending with the month the proposed payment is to be paid are limited to:

•50% of net income available for the payment of dividends during the Base Period (as defined below), if the ratio of common stock and surplus to total capitalization and surplus for 12 consecutive calendar months within the 14 calendar months immediately preceding the proposed dividend payment (the “Base Period”), adjusted to reflect the proposed dividend, is less than 20%; and

•75% of net income available for the payment of dividends during the Base Period, if the ratio of common stock and surplus to total capitalization and surplus for the 12 consecutive calendar months immediately preceding the proposed dividend payment, is at least 20% but less than 25%.

The Consumers Articles also prohibit the payment of cash dividends on its common stock if Consumers is in arrears on preferred stock dividend payments.

Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from the Federal Energy Regulatory Commission suggest that under a variety of circumstances common stock dividends from Consumers would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay common stock dividends in excess of retained earnings would be based on specific facts and circumstances and would result only after a formal regulatory filing process.

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In addition, Michigan law prohibits payment of a dividend if, after giving it effect, Consumers or Enterprises would not be able to pay its respective debts as they become due in the usual course of business, or its respective total assets would be less than the sum of its respective total liabilities plus, unless the respective articles of incorporation permit otherwise, the amount that would be needed, if Consumers or Enterprises were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. Currently, it is Consumers’ target to pay annual dividends equal to 80% of its annual consolidated net income, as, if and when declared by Consumers’ board of directors. Consumers’ board of directors reserves the right to change this target at any time.

Description of Debt Securities

The following description is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the indenture dated June 1, 1997 between CMS Energy and The Bank of New York Mellon, as trustee, as supplemented by the applicable supplemental indenture governing each particular series of junior subordinated notes issued thereunder (as so supplemented, as applicable, the “indenture”).

CMS Energy has three series of junior subordinated notes issued and outstanding and registered under Section 12 of the Exchange Act: 5.625% Junior Subordinated Notes due 2078 (“CMS-A”), the 5.875% Junior Subordinated Notes due 2078 (“CMS-C”) and the 5.875% Junior Subordinated Notes due 2079 (“CMS-D”), collectively, the “Notes”. The Notes were issued under and are governed the indenture. This summary is subject to and qualified in its entirety by reference to all of the provisions of the indenture and the Notes, including definitions of certain terms used in the indenture and the Notes. References herein to the term “indenture” mean the indenture, as supplemented, for the particular series of Notes being described.

Principal, Maturity and Interest

•We initially issued $200 million aggregate principal amount of CMS-A, which remains the aggregate principal amount outstanding.

•We initially issued $250 million aggregate principal amount of CMS-C, which remains the aggregate principal amount outstanding.

•We initially issued $630 million aggregate principal amount of CMS-D, which remains the aggregate principal amount outstanding.

Certain Provisions Relating to CMS-A:

The Notes mature on March 15, 2078 unless earlier redeemed. The Notes bear interest at a rate of 5.625% per year. Interest is payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, subject to deferral as described below under “Provisions Relating to All Notes - Deferral of Interest Payments”. We will pay interest to holders of record at 5:00 p.m., New York City time, in whose name the applicable Note is

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registered at the close of business on the date (whether or not such day is a business day) fifteen calendar days immediately preceding the applicable interest payment date, except that interest payable at stated maturity shall be paid to the person or entity to whom the principal amount is paid. So long as the Notes are in book-entry form, principal of and premium and interest on the Notes will be payable, and the Notes may be transferred, only through the facilities of DTC. Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any period shorter than a quarter, on the basis of the actual number of days elapsed per 30-day month.

Optional Redemption

The Notes will be redeemable at CMS Energy’s option, in whole or in part, at any time and from time to time, on or after March 15, 2023 at a redemption price equal to 100% of the principal amount of such Notes being redeemed, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

In addition, the Notes will be redeemable at CMS Energy’s option, at any time before March 15, 2023, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event (as defined below). In such case, the redemption price will be equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Tax Event” below.

The Notes will also be redeemable at CMS Energy’s option, at any time before March 15, 2023, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us following the occurrence and continuation of a Rating Agency Event (as defined below). In such case, the redemption price will be equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Rating Agency Event” below.  

Redemption Following a Tax Event

We will have the right to redeem the Notes, at any time before March 15, 2023, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. A “Tax Event” means that CMS Energy has received an opinion of nationally recognized independent tax counsel experienced in such matters at any time after the occurrence of any of the events set forth below to the effect that, as a result of:

•any amendment to or change or announced proposed change in the laws or regulations of the United States or any of its political subdivisions or taxing authorities affecting taxation;

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•any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority; or

•any official administrative interpretation or official administrative pronouncement that provides for a position with respect to those laws or regulations that differs from the generally accepted position on the date of the Notes are issued; 

which amendment or change becomes effective or proposed change, pronouncement, interpretation, action or decision is announced on or after March 5, 2018, there is more than an insubstantial risk that interest payable on the Notes is not or within 90 days of the date of the opinion would not be deductible as such interest accrues, in whole or in part, by us for United States federal income tax purposes.

Our right to redeem the Notes due to a Tax Event is subject to the condition that, if we have the opportunity to eliminate a Tax Event, within 90 days following the occurrence and continuation of such Tax Event, by taking some ministerial action (a “ministerial action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that will have no adverse effect on us or the holders of the Notes and will involve no material cost, we will pursue such measures in lieu of redemption. We cannot redeem the Notes while we are pursuing any such ministerial action.

Redemption Following a Rating Agency Event

We will have the right to redeem the Notes, at any time before March 15, 2023, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us at any time following the occurrence and continuation of a Rating Agency Event, at a redemption price equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

For purposes of CMS-A, “Ratings Agency Event” means a change in the methodology published by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (a “rating agency”) that currently publishes a rating for CMS Energy in assigning equity credit to securities such as CMS-A, as such methodology is in effect on March 5, 2018 (the “current criteria for CMS-A”), which change results in a lower equity credit being assigned by such rating agency to CMS-A as of the date of such change than the equity credit that would have been assigned to CMS-A as of the date of such change by such rating agency pursuant to its current criteria for CMS-A.

Certain Provisions Relating to CMS-C:

The Notes mature on October 15, 2078 unless earlier redeemed. The Notes bear interest at a rate of 5.875% per year. Interest is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year, subject to deferral as described below under “Provisions Relating to All Notes -Deferral of Interest Payments”. We will pay interest to holders of record at 5:00 p.m., New York City time, in whose name the applicable Note is registered at the close of business on

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the date (whether or not such day is a business day) fifteen calendar days immediately preceding the applicable interest payment date, except that interest payable at stated maturity shall be paid to the person or entity to whom the principal amount is paid. So long as the Notes are in book-entry form, principal of and premium and interest on the Notes will be payable, and the Notes may be transferred, only through the facilities of DTC. Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any period shorter than a quarter, on the basis of the actual number of days elapsed per 30-day month.

Optional Redemption

The Notes will be redeemable at CMS Energy’s option, in whole or in part, at any time and from time to time, on or after October 15, 2023 at a redemption price equal to 100% of the principal amount of such Notes being redeemed, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

In addition, the Notes will be redeemable at CMS Energy’s option, at any time before October 15, 2023, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event (as defined below). In such case, the redemption price will be equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Tax Event” below.

The Notes will also be redeemable at CMS Energy’s option, at any time before October 15, 2023, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us following the occurrence and continuation of a Rating Agency Event (as defined below). In such case, the redemption price will be equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Rating Agency Event” below.

Redemption Following a Tax Event

We will have the right to redeem the Notes, at any time before October 15, 2023, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. A “Tax Event” means that CMS Energy has received an opinion of nationally recognized independent tax counsel experienced in such matters at any time after the occurrence of any of the events set forth below to the effect that, as a result of:

•any amendment to or change or announced proposed change in the laws or regulations of the United States or any of its political subdivisions or taxing authorities affecting taxation;

•any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority; or

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•any official administrative interpretation or official administrative pronouncement that provides for a position with respect to those laws or regulations that differs from the generally accepted position on the date the Notes are issued;

which amendment or change becomes effective or proposed change, pronouncement, interpretation, action or decision is announced on or after September 20, 2018, there is more than an insubstantial risk that interest payable on the Notes is not or within 90 days of the date of the opinion would not be currently deductible as such interest accrues, in whole or in part, by us for United States federal income tax purposes.

Our right to redeem the Notes due to a Tax Event is subject to the condition that, if we have the opportunity to eliminate a Tax Event, within 90 days following the occurrence and continuation of such Tax Event, by taking some ministerial action (a “ministerial action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that will have no adverse effect on us or the holders of the Notes and will involve no material cost, we will pursue such measures in lieu of redemption. We cannot redeem the Notes while we are pursuing any such ministerial action.

Redemption Following a Rating Agency Event

We will have the right to redeem the Notes, at any time before October 15, 2023, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us at any time following the occurrence and continuation of a Rating Agency Event, at a redemption price equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

For purposes of CMS-C, “Ratings Agency Event” means a change in the methodology published by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (a “rating agency”) that currently publishes a rating for CMS Energy in assigning equity credit to securities such as CMS-C, as such methodology is in effect on September 20, 2018 (the “current criteria for CMS-C”), which change results in a lower equity credit being assigned by such rating agency to CMS-C as of the date of such change than the equity credit that would have been assigned to CMS-C as of the date of such change by such rating agency pursuant to its current criteria for CMS-C.

Certain Provisions Relating to CMS-D:

The Notes mature on March 1, 2079 unless earlier redeemed. The Notes bear interest at a rate of 5.875% per year. Interest is payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year, subject to deferral as described below under “Provisions Relating to All Notes -Deferral of Interest Payments”. We will pay interest to holders of record at 5:00 p.m., New York City time, in whose name the applicable Note is registered at the close of business on the date (whether or not such day is a business day) fifteen calendar days immediately preceding the applicable interest payment date, except that interest payable at stated maturity shall be paid to the person or entity to whom the principal amount is paid. So long as the Notes are in book-entry form, principal of and premium and interest on the Notes will be payable, and the Notes

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may be transferred, only through the facilities of DTC. Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day months and, for any period shorter than a quarter, on the basis of the actual number of days elapsed per 30-day month.

Optional Redemption

The Notes will be redeemable at CMS Energy’s option, in whole or in part, at any time and from time to time, on or after March 1, 2024 at a redemption price equal to 100% of the principal amount of such Notes being redeemed, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

In addition, the Notes will be redeemable at CMS Energy’s option, at any time before March 1, 2024, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event (as defined below). In such case, the redemption price will be equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Tax Event” below.

The Notes will also be redeemable at CMS Energy’s option, at any time before March 1, 2024, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us following the occurrence and continuation of a Rating Agency Event (as defined below). In such case, the redemption price will be equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. See “Redemption Following a Rating Agency Event” below.

Redemption Following a Tax Event

We will have the right to redeem the Notes, at any time before March 1, 2024, in whole but not in part, at any time within 90 days following the occurrence and continuation of a Tax Event at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date. A “Tax Event” means that CMS Energy has received an opinion of nationally recognized independent tax counsel experienced in such matters at any time after the occurrence of any of the events set forth below to the effect that, as a result of:

•any amendment to or change or announced proposed change in the laws or regulations of the United States or any of its political subdivisions or taxing authorities affecting taxation;

•any amendment to or change in an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority; or

•any official administrative interpretation or official administrative pronouncement that provides for a position with respect to those laws or regulations that differs from the generally accepted position on the date the Notes are issued;

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which amendment or change becomes effective or proposed change, pronouncement, interpretation, action or decision is announced on or after February 6, 2019, there is more than an insubstantial risk that interest payable on the Notes is not or within 90 days of the date of the opinion would not be currently deductible as such interest accrues, in whole or in part, by us for United States federal income tax purposes.

Our right to redeem the Notes due to a Tax Event is subject to the condition that, if we have the opportunity to eliminate a Tax Event, within 90 days following the occurrence and continuation of such Tax Event, by taking some ministerial action (a “ministerial action”), such as filing a form or making an election, or pursuing some other similar reasonable measure that will have no adverse effect on us or the holders of the Notes and will involve no material cost, we will pursue such measures in lieu of redemption. We cannot redeem the Notes while we are pursuing any such ministerial action.

Redemption Following a Rating Agency Event

We will have the right to redeem the Notes, at any time before March 1, 2024, in whole but not in part, at any time within 90 days following the conclusion of any review or appeal process instituted by us at any time following the occurrence and continuation of a Rating Agency Event, at a redemption price equal to 102% of the principal amount of the Notes, plus accrued and unpaid interest, if any, thereon to, but not including, the redemption date.

For purposes of CMS-D, “Ratings Agency Event” means a change in the methodology published by any nationally recognized statistical rating organization within the meaning of Section 3(a)(62) of the Exchange Act (a “rating agency”) that currently publishes a rating for CMS Energy in assigning equity credit to securities such as CMS-D, as such methodology is in effect on February 6, 2019 (the “current criteria for CMS-D”), which change results in a lower equity credit being assigned by such rating agency to CMS-D as of the date of such change than the equity credit that would have been assigned to CMS-D as of the date of such change by such rating agency pursuant to its current criteria for CMS-D.

Provisions Relating to All Notes:

We may issue debt securities from time to time in one or more series under the indenture. There is no limitation on the amount of debt securities we may issue under the indenture. The indenture does not limit our ability to incur additional indebtedness. The covenants contained in the indenture would not necessarily afford holders of Notes protection in the event of a highly leveraged transaction or other transaction involving us that may adversely affect the holders. In addition, the indenture and the terms of the Notes do not permit the holders of Notes to require us to repurchase the Notes in the event we undergo a change of control or similar transaction.

Ranking

The Notes are unsecured obligations and rank subordinate and junior in right of payment, to the extent set forth in the Indenture, to all of our existing and future senior indebtedness, which may include senior indebtedness issued under the indenture. Because we are a holding company,

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our obligations on the Notes will be effectively subordinated to the existing and future indebtedness and other liabilities of our subsidiaries.

As of December 31, 2019, CMS Energy had outstanding approximately $2.3 billion aggregate principal amount of senior indebtedness (secured and unsecured). As of December 31, 2019, our subsidiaries had outstanding approximately $9.8 billion aggregate principal amount of indebtedness, all of which would be effectively senior to the Notes.

Subordination

The Notes are our unsecured obligations and will rank subordinate and junior in right of payment in full, to the extent set forth in the indenture, to all Senior Indebtedness (as defined below) of CMS Energy. Because we are a holding company, our obligations on the Notes will be effectively subordinated to existing and future indebtedness and other liabilities of our subsidiaries.

If CMS Energy defaults in the payment of principal of, or interest or premium on, any Senior Indebtedness when it becomes due and payable or in the event any judicial proceeding is pending with respect to any such default, then, unless and until the default is cured or waived or ceases to exist, CMS Energy cannot make a payment with respect to the principal of, or interest or premium on, the Notes or acquire any Notes. In addition, upon the maturity of any Senior Indebtedness by lapse of time, acceleration or otherwise, CMS Energy cannot make a payment with respect to the principal of, or interest or premium on, the Notes or acquire any Notes unless and until all principal of, and interest and premium on, such Senior Indebtedness has been paid in full or such payment has been duly provided for in cash in a manner satisfactory to the holders of such Senior Indebtedness. The provisions of the indenture described in this paragraph, however, do not prevent CMS Energy from making payments in CMS Energy capital stock or in warrants, rights or options to acquire CMS Energy capital stock.

If there is any dissolution, winding up, liquidation, reorganization, bankruptcy, insolvency or similar proceeding with respect to CMS Energy, its creditors or its property, then all Senior Indebtedness must be paid in full before any payment (or any distribution of assets, in cash, property or securities) may be made to any holders of the Notes. The consolidation of CMS Energy with, or the merger of CMS Energy into, another corporation or the liquidation or dissolution of CMS Energy following the conveyance or transfer of its property as an entirety, or substantially as an entirety, to another corporation upon the terms and conditions provided for in the indenture shall not be deemed a dissolution, winding up, liquidation or reorganization for purposes of the subordination provisions of the indenture, if such other corporation, as part of such consolidation, merger, conveyance or transfer, complies with the conditions under the indenture.

If the trustee or any holder of Notes receives any payment or distribution on account of the Notes after the occurrence of an event described in the prior two paragraphs but before all of such affected Senior Indebtedness is paid in full (or any applicable declaration of acceleration thereof shall have been rescinded or annulled or any applicable such payment default shall have been cured or waived or cease to exist), then that payment or distribution shall be paid over and

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delivered to the holders of our Senior Indebtedness at the time outstanding until such Senior Indebtedness is paid in full (other than money or government obligations previously deposited in trust with the trustee in connection with the satisfaction and discharge of the indenture).

The holders of the Notes will be subrogated to the rights of the holders of our Senior Indebtedness to receive payments or distributions applicable to the Senior Indebtedness until all amounts owing on the Notes shall be paid in full.

The holders of our Senior Indebtedness may, at any time and from time to time, without the consent of or notice to the trustee or the holders of the Notes, without impairing or releasing the subordination provided in the indenture:

•change the manner, place or terms of payment or extend the time of payment of, or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in any manner such Senior Indebtedness or any instrument evidencing the same or any agreement under which such Senior Indebtedness is outstanding;

•sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing such Senior Indebtedness;

•release any person liable in any manner for the collection for such Senior Indebtedness; or

•exercise or refrain from exercising any rights against CMS Energy and any other person.

The failure to make a payment on account of principal of or interest or premium on the Notes by reason of the subordination provisions of the indenture shall not be construed as preventing the occurrence of an event of default with respect to the Notes. The failure to make any payment on the Notes due to the subordination provisions in the indenture shall not impair the absolute and unconditional obligation of CMS Energy to pay to the holders of the Notes the principal of, and interest and premium on, the Notes as and when the same shall become due and payable in accordance with their terms. Nothing in the indenture (i) is intended to or shall affect the relative rights of the holders of Notes and the creditors of CMS Energy other than holders of Senior Indebtedness or (ii) shall prevent the trustee or any holder of Notes from exercising all remedies otherwise permitted by applicable laws upon default, subject to the rights of holders of Senior Indebtedness in respect of cash, property or securities of CMS Energy received upon exercise of such remedy.

With respect to the Notes, “Senior Indebtedness” means the principal of and premium, if any, and interest on the following, whether outstanding on the date of execution of the indenture or thereafter incurred, created or assumed:

•indebtedness of CMS Energy for money borrowed by CMS Energy or evidenced by debentures, notes, bankers’ acceptances or other corporate debt securities, or similar

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instruments issued by CMS Energy (in each case, other than the Notes or any other subordinated debt securities);

•all capital lease obligations of CMS Energy;

•all obligations of CMS Energy issued or assumed as the deferred purchase price of property, all conditional sale obligations of CMS Energy and all obligations of CMS Energy under any title retention agreement (but excluding trade accounts payable arising in the ordinary course of business);

•obligations with respect to letters of credit;

•all indebtedness of others of the type referred to in the four preceding bullet points assumed by or guaranteed in any manner by CMS Energy or in effect guaranteed by CMS Energy;

•all obligations of the type referred to in the five preceding bullet points of other persons secured by any lien on any property or asset of CMS Energy (whether or not such obligation is assumed by CMS Energy) (subject to certain exceptions); or

•renewals, extensions or refundings of any of the indebtedness referred to in the preceding six bullet points unless, in the case of any particular indebtedness, renewal, extension or refunding, under the express provisions of the instrument creating or evidencing the same or the assumption or guarantee of the same, or pursuant to which the same is outstanding, such indebtedness or such renewal, extension or refunding thereof is not superior in right of payment to the Notes (or any other subordinated debt securities).

The indenture does not limit the total amount of Senior Indebtedness that may be issued. 

Registration, Transfer and Exchange

The Notes will be initially issued in the form of one or more notes in registered, global form, without coupons, in denominations of $25 and integral multiples in excess thereof. The global Notes will be registered in the name of the nominee of The Depository Trust Company (“DTC”). Except in limited circumstances, owners of beneficial interests in a global Note will not be entitled to have Notes registered in their names, will not receive or be entitled to receive physical delivery of any such Note and will not be considered the registered holder thereof under the indenture.

Deferral of Interest Payments

So long as there is no event of default under the indenture with respect to the Notes, we may defer interest payments on the Notes for a period of up to 40 consecutive quarterly periods (each such period, commencing on the date that the first such interest payment would otherwise have been made, an “Optional Deferral Period”), except that no such Optional Deferral Period may extend beyond the maturity of the Notes. During this period, the interest on the Notes will still

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accrue at their applicable interest rate. In addition, interest on the deferred interest will accrue at an annual rate equal to the interest rate on the applicable Notes, compounded quarterly, to the extent permitted by law.

Before the end of any Optional Deferral Period that is shorter than 40 consecutive quarterly periods, we may further defer the period, so long as the entire Optional Deferral Period does not exceed 40 consecutive quarterly periods or extend beyond the maturity or redemption date, if earlier, of the Notes. We may also elect to shorten the length of any Optional Deferral Period. Once we have paid all accrued and unpaid interest on the Notes after the conclusion of any Optional Deferral Period, we may elect to begin a new Optional Deferral Period.

If we defer payment on the Notes or there has occurred and is continuing an event of default applicable to the Notes or any event of which we have actual knowledge that is, or with the giving of notice or the lapse of time, or both, would be an event of default applicable to the Notes, neither we nor our majority-owned subsidiaries may:

•declare or pay any dividend or distribution on CMS Energy capital stock;

•redeem, purchase, acquire or make a liquidation payment with respect to any CMS Energy capital stock (which includes common stock and preferred stock);

•make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any CMS Energy indebtedness that is equal in right of payment with or junior in right of payment to the Notes; or

•make any guarantee payments with respect to any CMS Energy guarantee of indebtedness of our subsidiaries or any other party that is equal in right of payment with or junior in right of payment to the Notes.

However, during an Optional Deferral Period or such event of default described above, we may:

•pay dividends or distributions payable solely in shares of our capital stock or rights to acquire, repurchase or redeem our capital stock;

•declare any dividend in connection with the implementation of a plan providing for the issuance by us to all holders of our capital stock of rights entitling them to subscribe for or purchase such capital stock, which rights (1) are deemed to be transferred with such capital stock, (2) are not exercisable and (3) are also issued in respect of future issuances of capital stock, in each case until the occurrence of a specified event or events (a “Rights Plan”);

•issue any of our shares of capital stock under any Rights Plan or redeem or repurchase any rights distributed pursuant to a Rights Plan;

•reclassify our capital stock or exchange or convert one class or series of our capital stock for another class or series of our capital stock;

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•purchase fractional interests in shares of our capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; and

•purchase or acquire capital stock related to the issuance of capital stock or rights under our dividend reinvestment plan or any of our benefit plans for our directors, officers, employees, consultants or advisors.

We will give the holders of the Notes and the trustee notice of our election or any shortening or extension of the Optional Deferral Period at least ten business days prior to the earlier of (1) the next succeeding interest payment date or (2) the date upon which we are required to give notice to the New York Stock Exchange or any applicable self-regulatory organization or to holders of the Notes of the record or payment date of the related interest payment.

Sinking Fund Requirement

The Notes do not have the benefit of any sinking fund and are not subject to redemption at the option of the holder.

Limitation on Consolidation, Merger and Sales

Under the terms of the indenture or the Notes, nothing shall prevent any consolidation or merger of CMS Energy with or into any other person or persons (whether or not affiliated with CMS Energy), or successive consolidations or mergers in which CMS Energy or its successor or successors shall be a party or parties, or shall prevent any conveyance, transfer or lease of the property of CMS Energy as an entirety or substantially as an entirety, to any other person (whether or not affiliated with CMS Energy); provided, however, that:

•in case CMS Energy shall consolidate with or merge into another person or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any person, the entity formed by such consolidation or into which CMS Energy is merged or the person that acquires by conveyance or transfer, or that leases, the properties and assets of CMS Energy as an entirety or substantially as an entirety shall be a corporation or a limited liability company organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there is more than one trustee) supplemental to the indenture, executed by the successor person and delivered to the trustee, in form satisfactory to the trustee, the due and punctual payment of the principal of and any premium and interest on the Notes and the performance of every obligation in the indenture and the Notes on the part of CMS Energy to be performed or observed;

•immediately after giving effect to such transaction, no event of default or event that, after notice or lapse of time, or both, would become an event of default, shall have occurred and be continuing; and

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•either CMS Energy or the successor person shall have delivered to the trustee an officers’ certificate and an opinion of counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture complies with the provisions of the indenture and all conditions precedent therein relating to such transaction.

Upon any consolidation by CMS Energy with or merger of CMS Energy into any other person or any conveyance, transfer or lease of the properties and assets of CMS Energy substantially as an entirety to any person as described above, the successor person formed by such consolidation or into which CMS Energy is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, CMS Energy under the indenture with the same effect as if such successor person had been named as CMS Energy therein; and thereafter, except in the case of a lease, the predecessor person shall be released from all obligations and covenants under the indenture and the Notes.

Events of Default

The occurrence of any of the following events with respect to the Notes will constitute an “event of default” with respect to the Notes:

◦default in the payment of any interest on any of the Notes when it becomes due and payable, and continuance of such default for a period of 30 days (except for the deferral of interest payments as discussed above in “Deferral of Interest Payments”);

◦default in the payment when due and payable of any of the principal of or the premium, if any, on any of the Notes; or

◦certain events of bankruptcy, insolvency or reorganization relating to CMS Energy.

With respect to the Notes, a failure to comply with other covenants under the indenture does not constitute an event of default.

If any event of default on the Notes shall have occurred and be continuing, either the trustee or the holders of not less than 25% in aggregate principal amount of the Notes then outstanding may declare the principal of all of the Notes and the premium, if any, thereon and interest, if any, accrued thereon to be due and payable immediately. 

The indenture provides that the trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request, order or direction of the holders of the Notes, unless such holders shall have offered to the trustee reasonable indemnity. Subject to such provisions for indemnity and certain other limitations contained in the indenture, the holders of a majority in aggregate principal amount of the securities issued under the indenture of each affected series then outstanding (voting as one class) will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or

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exercising any trust or power conferred on the trustee, with respect to the securities of such affected series.

After a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the trustee, the holders of a majority in aggregate principal amount of the outstanding Notes, by written notice to us and the trustee, may rescind and annul such declaration if:

•we have paid (or deposited with the trustee a sum sufficient to pay): (i) all overdue interest on all Notes; (ii) the principal amount of any Notes that have become due otherwise than by such declaration of acceleration; (iii) to the extent that payment of such interest is lawful, interest upon overdue interest; and (iv) all sums paid or advanced by the trustee under the indenture and the reasonable compensation, expenses, disbursements and advances of the trustee, its agents and counsel; and

•all events of default, other than the non-payment of the principal amount and any accrued and unpaid interest that have become due by such declaration of acceleration, have been cured or waived.

The indenture provides that no holders of Notes may institute any action against CMS Energy under the indenture (except actions for payment of overdue principal, premium or interest) unless such holder previously shall have given to the trustee written notice of default and continuance thereof and unless the holders of not less than 25% in aggregate principal amount of securities issued under the indenture of each affected series then outstanding (voting as one class) shall have requested the trustee to institute such action and shall have offered the trustee reasonable indemnity against costs, expenses and liabilities, the trustee shall not have instituted such action within 60 days of such request and the trustee shall not have received direction inconsistent with such request by the holders of a majority in aggregate principal amount of the securities of each affected series then outstanding (voting as one class).

The indenture requires CMS Energy to furnish to the trustee annually a statement as to CMS Energy’s compliance with all conditions and covenants under the indenture. The indenture provides that the trustee may withhold notice to the holders of the Notes of any default affecting such Notes (except defaults as to payment of principal of, or premium or interest on, the Notes) if it considers such withholding to be in the interests of the holders of the Notes.

Modification and Waiver

CMS Energy and the trustee may enter into supplemental indentures without the consent of the holders of the Notes to:

•establish the form and terms of any series of securities under the indenture;

•secure the Notes;

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•provide for the assumption of our obligations to the holders of the Notes in the event of a merger or consolidation, or conveyance, transfer or lease of our property substantially as an entirety;

•surrender any right or power conferred upon us;

•add to our covenants (and related events of default) for the benefit of the holders of the Notes;

•correct any mistake, cure any ambiguity or correct or supplement any inconsistent or otherwise defective provision contained in the indenture (including any supplemental indenture); provided, that such modification or amendment does not adversely affect the interests of the holders of the Notes in any material respect; provided, further, that any amendment made solely to conform the provisions of the indenture to the description of the Notes contained in this prospectus supplement will not be deemed to adversely affect the interests of the holders of the Notes;

•make any provision with respect to matters or questions arising under the indenture that we may deem necessary or desirable and that shall not be inconsistent with provisions of the indenture; provided, that such change or modification does not, in the good faith opinion of CMS Energy, adversely affect the interests of the holders of the Notes in any material respect;

•comply with the requirements of the SEC in order to effect or maintain the qualification of the indenture under the Trust Indenture Act of 1939, as amended;

•add guarantees of obligations under the Notes;

•provide for a successor trustee;

•modify, amend or replace, in whole or in part, the subordination provisions of the indenture in connection with the creation and issuance of any junior subordinated notes of any series (but not with respect to any outstanding junior subordinated notes expressly made subject to the subordination provisions of the indenture);

•add any additional events of default with respect to all or any series of securities under the indenture;

•change or eliminate any other provisions of the indenture to such extent as shall be necessary or desirable to permit or facilitate the issuance, legending, registration, transfer or exchange, redemption or repurchase of securities under the indenture in the form of global securities, including to comply with the rules, practices and procedures of DTC (and related procedures);

•change or eliminate any of the provisions of the indenture, provided that any such change or elimination shall become effective only when there is no security outstanding under the indenture of any series created prior to the execution of the

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supplemental indenture effecting such change or elimination which is entitled to the benefit of such provision (or such change or elimination only applies to a new series of securities being established or created); and

•provide for or confirm the issuance of additional securities of any series in accordance with the terms of the indenture.

CMS Energy and the trustee, with the consent of the holders of a majority in total principal amount of securities issued under the indenture of all series, including the Notes, then outstanding and affected (voting as one class), may change in any manner the provisions of the indenture or modify in any manner the rights of the holders of the securities of each such affected series. CMS Energy and the trustee may not, without the consent of the holders of each Note affected, enter into any supplemental indenture to: 

•change the time of payment of the principal;

•reduce the principal amount of such Note;

•reduce the rate or change the time of payment of interest on such Note;

•impair the right to institute suit for the enforcement of any payment on any Note when due;

•change the currency in which any Note is payable;

•reduce the amount payable on the redemption of the Notes; or

•subject to specified exceptions, modify certain provisions of the indenture relating to modification of the indenture or waiver under the indenture.

In addition, no such modification may reduce the percentage in principal amount of the securities of the affected series, the consent of whose holders is required for any such modification or for any waiver provided for in the indenture. 

Prior to the acceleration of the maturity of any security, the holders, voting as one class, of a majority in total principal amount of the securities issued under the indenture with respect to which a default or event of default shall have occurred and be continuing may on behalf of the holders of all such affected securities waive any past default or event of default and its consequences, except: 

•our failure to pay principal of or interest on any securities issued under the indenture when due; or

•a default or an event of default in respect of a covenant or provision of the indenture or of any security that cannot be modified or amended without the consent of the holders of each security affected.

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Discharge of the Indenture

The indenture provides that, at the option of CMS Energy, CMS Energy will be discharged from all obligations under the indenture and the indenture shall cease to be of further effect (except for certain obligations, including to register the transfer of or exchange the Notes, to replace stolen, lost or mutilated Notes, to maintain paying agencies and to maintain the trust described below) if:

aall the Notes that have not been paid in full and delivered to the trustee for cancellation shall have become due and payable, or by their terms become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the trustee;

bCMS Energy irrevocably deposits in trust with the trustee money and/or securities backed by the full faith and credit of the United States that, through the payment of the principal thereof and the interest thereon in accordance with their terms, will provide money in an amount sufficient to pay all the principal and interest on the Notes on each date that such principal or interest, if any, is due in accordance with the terms thereof;

cCMS Energy has paid all other sums payable under the indenture; and

dthe trustee receives an officers’ certificate and opinion of counsel stating that all conditions precedent in the indenture relating to the satisfaction and discharge of the indenture have been complied with.

The Trustee

The Bank of New York Mellon is the trustee, paying agent and registrar for the Notes under the indenture. CMS Energy and its affiliates maintain depositary and other normal banking relationships with The Bank of New York Mellon.

Governing Law

The indenture, including the supplemental indenture, and the Notes will be governed by, and construed in accordance with, the laws of the State of Michigan unless the laws of another jurisdiction shall mandatorily apply, except that the rights, duties and obligations of the trustee under the indenture are governed and construed in accordance with the laws of the State of New York.

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EX-10.10

Exhibit 10.10

CMS INCENTIVE COMPENSATION PLAN FOR CMS ENERGY AND CONSUMERS ENERGY OFFICERS

CMS INCENTIVE COMPENSATION PLAN FOR CMS ENERGY AND CONSUMERS ENERGY OFFICERS

I.GENERAL PROVISIONS

1.1Purpose. The purpose of the CMS Incentive Compensation Plan (“CMSICP” or “Plan”) is to:

(a)    Provide an equitable and competitive level of compensation that will permit CMS Energy and Consumers Energy to attract, retain and motivate Officers.

(b)    No payments to Officers in the form of incentive compensation shall be made unless pursuant to a plan approved by the Compensation and Human Resources Committee of the Board of Directors of CMS Energy and after express approval of the Committee. This plan shall be administered by the President and CEO of CMS Energy and the Benefit Administration Committee.

1.2Effective Date. The initial effective date of the Plan is January 1, 2004. The Plan, as described herein, is amended and restated effective as of December 1, 2018, January 16, 2020, December 1, 2021, January 27, 2022.

1.3Definitions. As used in this Plan, the following terms have the meaning described below:

(a)“Annual Award” means an annual incentive award granted under the CMSICP.

(b)“Base Salary” means the base salary on January 1 of a Performance Year, except as impacted by a Change in Status as defined in Article V. For purposes of the Plan, an Officer’s Base Salary must be subject to annual review and annual approval by the Committee.

(c)“Benefit Administration Committee" means the committee as appointed by the Chief Executive Officer and Chief Financial Officer of CMS Energy Corporation to act as the Plan Administrator in accordance with authority granted by the Board of Directors.

(d)“CMS Energy” means CMS Energy Corporation.

(e)“Code” means the Internal Revenue Code of 1986, as amended.

(f) “Committee” means the Compensation and Human Resources Committee of the Board of Directors of CMS Energy.

(g)“Company” means CMS Energy.

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(h)“Consumers Energy” means Consumers Energy Company, a wholly owned subsidiary of CMS Energy.

(i)“Deferred Annual Award” means the amount deferred pursuant to Section 4.2.

(j)“Disability” means that a participant has terminated employment with the Company or Consumers Energy and is disabled, as that term is defined under Code Section 409A and any applicable regulations.

(k)“Leave of Absence” for purposes of this Plan means a leave of absence that has been approved by the Company.

(l)“Officer” means a United States of America employee of the Company or Consumers Energy in Salary Grade “E-3” or higher.

(m)“Payment Event” means the time at which a Deferred Annual Award may be paid pursuant to Section 4.2.

(n)“Payment Term” means the length of time for payment of a Deferred Annual Award under Section 4.2.

(o)“Pension Plan” means the Pension Plan for Employees of Consumers Energy and Other CMS Energy Companies.

(p)“Performance Goals” are the factors used by the Committee (on an absolute or relative basis) to establish goals to track business measures. The Committee shall use one or more of the following business criteria, which may be based on corporate-wide or subsidiary, division, operating unit or individual measures: net earnings; operating earnings or income; earnings growth; net income; cash flow (including operating cash flow, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost of capital); earnings per share; earnings per share growth; stock price; total shareholder return; absolute and/or relative return on common shareholders equity; return on shareholders equity; return on capital; return on assets; economic value added (income in excess of cost of capital); independent customer satisfaction studies or indices; expense reduction; sales; or ratio of operating expenses to operating revenues. In addition, the Annual Incentive Plan may incorporate certain utility operating parameters such as safety, reliability and customer service. The established Performance Goals may be applied on a pre- or post-tax basis and may be adjusted to include or exclude objectively determinable components of any Performance Goal, including, without limitation, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, nonrecurring or one-time events affecting the Corporation or its financial statements or changes in law or accounting principles (each an “Adjustment Event”).

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(q)“Performance Year” means the calendar year prior to the year in which an Annual Award is made by the Committee.

(r)“Plan Administrator” for Officer participants means the President and Chief Executive Officer of CMS Energy, under the general direction of the Committee. For all other participants and for purposes of administering Deferred Amounts under Section 4.2, the Plan Administrator is the Benefits Administration Committee appointed by the Chief Executive Officer and the Chief Financial Officer as authorized by the Board of Directors.

(s)“Record Keeper” means the person(s) or entity named as such by the Plan Administrator.

(t)“Retirement” means that a Plan participant is no longer an active Officer and qualifies for a retirement benefit other than a deferred vested retirement benefit under the Pension Plan. For a participant ineligible for coverage under the Pension Plan and covered instead under the Defined Company Contribution Plan, retirement occurs when there is a Separation from Service on or after age 55 with 5 or more years of service.

(u)“Separation from Service” means an Officer retires or otherwise has a separation from service from the Company as defined under Code Section 409A and any applicable regulations. The Plan Administrator will determine, consistent with the requirements of Code Section 409A and any applicable regulations, to what extent a person on a leave of absence, including on paid sick leave pursuant to Company policy, has incurred a Separation from Service. Notwithstanding the above, a Separation from Service will occur consistent with the Regulation 1.409A-1(h) when it is reasonably anticipated that the level of service provided by the Officer will be no more than 45% of the average level of bona fide service performed by the Officer over the immediately preceding 36 month period.

(v)“Subsidiary” means any direct or indirect subsidiary of the Company.

1.4Eligibility. Officers of CMS Energy and/or Consumers Energy who do not participate in a broad-based incentive plan contingent upon objectives and performance unique to the Officers’ Subsidiary, affiliate, site and/or business unit, are eligible for participation in the CMSICP. An individual listed on the Company payroll records as a contract employee is not eligible for this Plan.

1.5Administration of the Plan.

(a)    The Plan is administered by the President and Chief Executive Officer of CMS Energy under the general direction of the Committee.

(b)    Each year, normally in January, but no later than March 30th of the Performance Year, the Committee will approve the established Performance Goals for the Performance Year.

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(c)    The Committee, no later than March 1st of the calendar year following the Performance Year, will review for approval proposed Annual Awards for the total of all CMSICP Officer participants, as recommended by the President and CEO of CMS Energy. All proposed Annual Awards shall be approved by the Committee. Before the payment of any Annual Awards, the Company’s outside auditors and the Committee will certify in writing that the established Performance Goals were in fact satisfied.

(d)    The Committee reserves the right to modify the established Performance Goals with respect to unforeseeable circumstances or otherwise exercise discretion with respect to proposed Annual Awards as it deems necessary to maintain the spirit and intent of the CMSICP, provided that if such discretion increases the Annual Award it does not exceed the computed performance factor by more than 20%. The Committee also reserves the right in its discretion to not pay Annual Awards for a Performance Year. All decisions of the Committee are final.

II.CORPORATE PERFORMANCE GOALS

2.1In General. Each year, the Committee uses Performance Goals to determine the Annual Award measures. A table shall be created by the Compensation Committee for the current year Performance Goals.

2.2Plan Performance Factor.The plan performance factor used to calculate an Annual Award is based on the results of the corporate established Performance Goals and is capped at two times the standard award amount. The PlanPerformanceFactor is established in a table relating specific performance results to specific plan Performance Goals. This table shall be created by the Committee for each Performance Year.

III.ANNUAL AWARD FORMULA

3.1Annual Awards. Annual Awards for each eligible Officer will be based upon a percentage of the Officer’s Base Salary for the Performance Year times the Plan performance factor for the year as determined under 2.2 above. The standard award percentage for each eligible Officer will be approved annually by the Committee for each Performance Year. The total amount of a CMSICP participant Officer’s Annual Award shall be computed according to the annual award formula set forth in Section 3.2. An Officer’s standard award amount is equal to the Officer’s Annual Award computed using a plan performance factor of 100%.

3.2Calculation of Award.Annual Awards for Officer CMSICP participants will be calculated and made as follows:

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Annual Award = Base Salary times

Standard Award Percentage times Plan Performance Factor

IV.PAYMENT OF ANNUAL AWARDS

4.1Cash Annual Award. All Annual Awards for a Performance Year will be paid in cash after certification by the outside auditors of the Company and the Committee that the established Performance Goals have been satisfied, but not later than March 15th of the calendar year following the Performance Year provided that the Annual Award for a particular Performance Year has not been deferred voluntarily pursuant to Section 4.2. The amounts required by law to be withheld for income and employment taxes will be deducted from the Annual Award payments. All Annual Awards become the obligation of the company on whose payroll the Officer is enrolled at the time the Committee makes the Annual Award.

4.2Deferred Annual Awards.

(a)    The payment of all or any portion (rounded to an even multiple of 10%) of a cash Annual Award may be deferred voluntarily at the election of an individual Plan participant in salary grades E-1 – E-9. Any such deferral will be net of any applicable FICA or FUTA taxes. A separate irrevocable election must be made prior to the Performance Year. Any Annual Award made by the Committee after termination of employment of a participant or retirement of a participant will be paid in accordance with any deferral election made within the enrollment period.

(b)    At the time the participant makes a deferral election he or she must select the payment options (including the Payment Event as set forth at (c) below and the Payment Term as set forth at (d) below) applicable to the Deferred Annual Award for the Performance Year, as well as any earnings or income attributable to such amounts. The payment options elected will apply only to that year’s Deferred Annual Award and will not apply to any previous Deferred Annual Award or to any subsequent Deferred Annual Award. Any participant who elects to defer all or a portion of an Annual Award and who fails to select a Payment Event or a Payment Term will be presumed to have elected a Payment Event of Separation from Service in accordance with paragraph (c)(i) below and/or a Payment Term of a single sum.

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(c)    The Payment Event elected can be either:

(i)    Separation from Service for any reason other than death. Payment will be made, or begin, in the later of: (1) January of the year following the year of the Separation from Service; or (2) the seventh month after the month of the Separation from Service. Later installments, if any, will be paid in January of the succeeding years. Effective for amounts deferred in 2019 and succeeding years, payment will be made, or begin, in the seventh month after the month of Separation from Service. Later installments, if any, will be paid in the same month of the succeeding years;

(ii)    Payment upon attainment of a date certain that is more than 1 year after the last day of the applicable Performance Year. Later installments, if any, will be paid in the same month of the succeeding years; or

(iii)    The later of (i) or (ii) above.

(d)    Payment Term. At the time of electing to defer an Annual Award, the participant must also elect how he or she wishes to receive any such payment from among the following options (the participant may elect a separate Payment Term for each Payment Event elected):

(i)    Payment in a single sum upon occurrence of the Payment Event.

(ii)    Payment of a series of annual installment payments over a period from two (2) years to fifteen (15) years following the Payment Event. Each installment payment shall be equal to a fractional amount of the balance in the account the numerator of which is one and the denominator of which is the number of installment payments remaining. Although initially such installment payments will be identical, actual payments may vary based upon investment performance. For example, a series of 5 installment payments will result in a payout of 1/5 of the account balance in the first installment, 1/4 of the account balance (including investment gains or losses since the first installment date) in the second installment, etc.

(e)    Changes to Payment Options. Once a payment option has been elected, subsequent changes which would accelerate the receipt of benefits from the Plan are not permitted, except that the Plan Administrator may at its discretion accelerate payments to the extent permitted by Code Section 409A and applicable regulations. A subsequent election to change the payment options related to a Payment Event, in order to delay a payment or to change the form of a payment, can only be made when all of the following conditions are satisfied:

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(i)    such election may not take effect until at least 12 months after the date on which the election is made;

(ii)    (ii)    the payment(s) with respect to which such election is made is deferred for a period of not less than 5 years from the date such payment would otherwise have been made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 5 years from the date the first installment was scheduled to be paid); and

(iii)    such election must be made not less than 12 months before the date the payment was previously scheduled to be made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 12 months before the first installment was scheduled to be paid), if the participant’s previous commencement date was a specified date.

Effective January 1, 2016, the right to a series of installment payments is to be treated as a right to a series of separate payments to the extent permissible under Code Section 409A and any applicable regulations. When making a subsequent election with respect to the payment of any post-December 31, 2015 deferral, the participant may make a separate election with respect to each separate payment, provided that such election must result in all of the applicable Performance Year’s deferral with related earnings being paid in a single sum or in a series of annual payments over a period from two (2) to fifteen (15) consecutive years.

(f)    Investments. At the time of electing to voluntarily defer payment, the participant must elect how the Deferred Annual Award will be treated by the Company or Consumers Energy. To the extent that any amounts deferred are placed in a rabbi trust with an independent Record Keeper, a participant who has previously deferred amounts under this Plan will automatically have his or her existing investment profile apply to this deferral also. All determinations of the available investment options by the Plan Administrator are final and binding upon participants. A participant may change the investment elections at any time prior to the payment of the benefit, subject to any restrictions imposed by the Plan Administrator, the plan Record Keeper or by any applicable laws and regulations. A participant not making an election will have amounts deferred treated as if in a Lifestyle Fund under the Savings Plan for Employees of Consumers Energy and other CMS Energy Companies (the “Savings Plan”) applicable to the participant’s age 65, rounded up, or such other investment as determined by the Benefit Administration Committee. All gains and losses will be based upon the performance of the investments selected by the participant from the date the deferral is first credited to the nominal account. If the Company elects to fund its obligation as discussed below, then investment performance will be based on the balance as determined by the Record Keeper.

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(g)    The amount of any Deferred Annual Award is to be satisfied from the general corporate funds of the company on whose payroll the Plan participant was enrolled prior to the payout beginning and are subject to the claims of general creditors. This is an unfunded nonqualified deferred compensation plan. To the extent the Company or Consumers Energy, as applicable, elects to place funds with a trustee to pay its future obligations under this Plan, such amounts are placed for the convenience of the Company or Consumers Energy, remain the property of the Company or Consumers Energy and the participant shall have no right to such funds until properly paid in accordance with the provisions of this Plan. For administrative ease and convenience, such amounts may be referred to as participant accounts, but as such are a notional account only and are not the property of the participant. Such amounts remain subject to the claims of the creditors of the Company or Consumers Energy.

(h)    Payment in the Event of an Unforeseeable Emergency. The participant may request that payments commence immediately upon the occurrence of an unforeseeable emergency as that term is defined in Code Section 409A and any applicable regulations. Generally, an unforeseeable emergency is a severe financial hardship resulting from an illness or accident of the participant or the participant’s spouse or dependent, loss of the participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. A distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the participant’s assets (without causing severe financial hardship), or by cessation of deferrals under this arrangement, the Savings Plan or other arrangements. Distributions because of an unforeseeable emergency shall not exceed the amount permitted under Section 409A and accordingly are limited to the amount reasonably necessary to satisfy the emergency need (after use of insurance proceeds, liquidation of assets, etc.) plus an amount to pay taxes reasonably anticipated as a result of the distribution. In the event any payment is made due to an unforeseeable emergency, all deferral elections for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year. For any participant receiving a hardship withdrawal under the Savings Plan, all deferral elections under this Plan for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year.

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4.3Payment in the Event of Death.

(a)    A participant may name the beneficiary of his or her choice on a beneficiary form provided by the Company or Record Keeper, and the beneficiary shall receive, within 90 days of the participant’s death, in a single sum, all payments credited to the participant in the event that the participant dies prior to receipt of Deferred Annual Awards. If there is no beneficiary named at the time of participant’s death or if the beneficiary does not survive the participant, the payment will be made to the participant’s estate. In no event may any recipient designate a year of payment for an amount payable upon the death of the participant.

(b)    A participant may change beneficiaries at any time, and the change will be effective as of the date the plan Record Keeper or Company accepts the form as complete. Neither the Company nor Consumers Energy will be liable for any payments made before receipt and acceptance of a written beneficiary request.

V.CHANGE OF STATUS

Payments in the event of a change in status will not be made if no Annual Awards are made for the Performance Year.

5.1Pro-Rata Annual Awards. A new Officer participant, whether hired or promoted to the position, or an Officer promoted to a higher salary grade during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the Officer is in a particular salary grade. An Officer participant whose salary grade has been lowered, but whose employment is not terminated during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the Officer is in a particular salary grade.

5.2Termination. An Officer participant whose employment is terminated pursuant to a violation of the Company code of conduct or other corporate policies will not be considered for or receive an Annual Award.

5.3Resignation. An Officer participant who resigns prior to payment (during or after a Performance Year) will not be eligible for an Annual Award. If the resignation is due to reasons such as a downsizing or reorganization, or the ill health of the Officer or ill health in the immediate family, the Officer may petition the Plan Administrator and may be considered, in the discretion of the Plan Administrator, for a pro rata Annual Award. The Plan Administrator’s decision to approve or deny the request for a pro rata Annual Award shall be final.

5.4Death, Disability, Retirement, Leave of Absence. An Officer participant whose status as an active employee is changed during the Performance Year due to death,

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Disability, Retirement, or Leave of Absence will receive a pro rata Annual Award. An Officer participant whose employment is terminated following the Performance Year but prior to payment due to death, Disability or Retirement will continue to be eligible for an Annual Award for the Performance Year. Any such payment or Annual Award payable due to the death of the Officer participant will be made to the named beneficiary, or if no beneficiary is named or if the beneficiary doesn’t survive the Officer participant, then to the Officer participant’s estate no later than March 15 following the applicable Performance Year. Notwithstanding the above, an Officer participant who retires, is on Disability or Leave of Absence and who becomes employed by a competitor of CMS Energy or Consumers Energy or their subsidiaries or affiliates prior to award payout will forfeit all rights to an Annual Award, unless prior approval of such employment has been granted by the Committee. A “competitor” shall mean an entity engaged in the business of (1) selling (a) electric power or natural gas at retail or wholesale within the State of Michigan or (b) electric power at wholesale within the market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Energy is located or (2) developing an electric generating plant within the State of Michigan or a market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Energy is located.

5.5Clawback.

(a)    If, due to a restatement of CMS Energy’s or an affiliate’s publicly disclosed financial statements or otherwise, an Officer is subject to an obligation to make a repayment or return of benefits to CMS Energy or an affiliate pursuant to a clawback provision contained in this Plan, a supplemental executive retirement plan, the Performance Incentive Stock Plan, or any other benefit plan (a “benefit plan clawback provision”) of the Company, the Committee may determine that it shall be a precondition to the payment of any award under this Plan, that the Officer fully repay or return to the Company any amounts owing under such benefit plan clawback provision (taking into account the requirements of Code Section 409A, to extent applicable). Any and all awards under this Plan are further subject to any provision of law, which may require the Officer to forfeit or return any benefits provided hereunder, in the event of a restatement of the Company’s publicly disclosed accounting statements or other illegal act, whether required by Section 304 of the Sarbanes-Oxley Act of 2002, Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, federal securities law (including any rule or regulation promulgated by the Securities and Exchange Commission), any state law, or any rule or regulation promulgated by the applicable listing exchange or system on which the Company lists its traded shares.

(b)    To the degree any benefits hereunder are not otherwise forfeitable pursuant to the preceding sentences of this Section 5.5, the Board or a Committee delegated authority by the Board (“delegated Committee”), may require the Officer to return to the Company or forfeit any amounts granted under this Plan, if:

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1.    the grant of such compensation was predicated upon achieving certain financial results which were subsequently the subject of a substantial accounting restatement of the Company’s financial statements filed under the securities laws (a “financial restatement”),

2.    a lower payout or Annual Award (“reduced financial results”), would have occurred based upon the financial restatement, and

3.    in the reasonable opinion of the Board or the delegated Committee, the circumstances of the financial restatement justify such a modification of the Annual Award. Such circumstances may include, but are not limited to, whether the financial restatement was caused by misconduct, whether the financial restatement affected more than one period and the reduced financial results in one period were offset by increased financial results in another period, the timing of the financial restatement or any required repayment, and other relevant factors.

Unless otherwise required by law, the provisions of this Subsection (b) relating to the return of previously paid Plan benefits shall not apply unless a claim is made therefore by the Company within three years of the payment of such benefits.

(c)    The Board or delegated Committee shall also have the discretion to require a clawback in the event of a mistake or accounting error in the calculation of a benefit or an award that results in a benefit to an eligible individual to which he/she was not otherwise entitled. The rights set forth in this Plan concerning the right of the Company to a clawback are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of such rights.

VI.MISCELLANEOUS

6.1Impact on Benefit Plans. Payments made under the Plan will be considered as earnings for the Supplemental Executive Retirement Plans but not for purposes of the Employees’ Savings Plan, Pension Plan, or other Officer benefit programs.

6.2Impact on Employment. Neither the adoption of the Plan nor the granting of any Annual Award under the Plan will be deemed to create any right in any individual to be retained or continued in the employment of the Company or any corporation within the Company’s control group.

6.3Termination or Amendment of the Plan. The Board of Directors of CMS Energy may amend or terminate the Plan at any time. Upon termination, any Deferred Annual Award accrued under the Plan will remain in the Plan and be paid out in accordance with the payment options previously selected. The Plan Administrator

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is authorized to make any amendments that are deemed necessary or desirable to comply with any applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and operation of the Plan. The Company may terminate the Plan and accelerate payment of any deferred benefits under the Plan if it acts consistent in all respects with the requirements of Code Section 409A and any applicable regulations with respect to when a terminated plan may accelerate payment to a participant.

6.4Governing Law. The Plan will be governed and construed in accordance with the laws of the State of Michigan.

6.5Dispute Resolution. Any disputes related to the Plan must be brought to the Plan Administrator. The Plan Administrator is granted full discretionary authority to apply the terms of the Plan, make administrative rulings, interpret the Plan and make any other determinations with respect to the Plan. If the Plan Administrator makes an adverse determination and the participant disagrees with or wishes to appeal the determination, the participant must appeal the decision to the Plan Administrator, in writing and not later than 60 days from when the determination was mailed to the participant. If the participant does not timely appeal the original determination, the participant has no further rights under the Plan with respect to the matter presented in the claim. If the participant appeals the original determination and that appeal does not result in a mutually agreeable resolution, then the dispute shall be subject to final and binding arbitration before a single arbitrator selected by the parties to be conducted in Jackson, Michigan, provided the participant makes such request for arbitration in writing within 30 days of the final decision by the Plan Administrator. The arbitration will be conducted and finished within 90 days of the selection of the arbitrator. The parties shall share equally the cost of the arbitrator and of conducting the arbitration proceeding, but each party shall bear the cost of its own legal counsel and experts and other out-of-pocket expenditures. The arbitrator must use an arbitrary and capricious standard of review when considering any determinations and findings by the Plan Administrator.

VII.AMENDMENT TO REFLECT CODE SECTION 409A

7.1Code Section 409A. This Plan has been amended, effective as of January 1, 2005, to comply with the requirements of Code Section 409A. To the extent counsel determines additional amendments may be reasonable or desirable in order to comply with Code Section 409A, and any other applicable rules, laws and regulations, such changes shall be authorized with the approval of the Plan Administrator.

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EX-10.12

Exhibit 10.12

ANNUAL EMPLOYEE INCENTIVE COMPENSATION

PLAN FOR CONSUMERS ENERGY COMPANY

ANNUAL EMPLOYEE INCENTIVE COMPENSATION

PLAN FOR CONSUMERS ENERGY COMPANY

I.GENERAL PROVISIONS

1.1Purpose. The purpose of the Annual Employee Incentive Compensation Plan (“EICP” or “Plan”) is to provide an equitable and competitive level of compensation that will permit Consumers Energy Company (“Company”) and its subsidiaries to attract, retain and motivate their employees.

1.2Effective Date. The Plan as described herein is amended and restated effective as of March 14, 2014 and revised August 4, 2017, December 1, 2018, December 1, 2019, December 1, 2021, and January 27, 2022.

1.3Eligibility. Regular non-union U.S. employees who have received a performance rating of at least “Fully Effective” (also known as “Effective” or “Meets Expectations” or “Satisfactory” or “Fully Contributing”) for the Performance Year as documented on their annual performance, evaluation, feedback and development appraisal are eligible for participation in the EICP. Any regular non-union employee who has received a performance rating of less than “Effective” (also known as “Meets Expectations” or “Satisfactory” or “Fully Contributing”) or under-performing (also known as “under-contributing” or (“U”) for the Performance Year as documented on their annual performance, evaluation, feedback and development appraisal is not eligible for participation in the EICP.

II.CORPORATE PERFORMANCE GOALS

Each year the President and CEO of CMS Energy Corporation will establish the Corporate Performance Goals ("Goals") for the EICP. The Goals will consist of between five and fifteen utility specific performance criteria relating to such items as customer service, safety and reliability. When establishing the Goals for a Performance Year, the President and CEO will include the total number of criteria to be used for the year as well as the award percent for achievement of a specified number of the established criteria. The specific Goals will be communicated to employees no later than March 31st of the Performance Year. The Award Formula may include additional adjustments based on financial performance goals relating to CMS Energy Corporation as determined by the Compensation and Human Resources Committee of the Company Board of Directors (the “Committee”).

III.ANNUAL AWARD FORMULA

3.1Annual Awards. Annual Awards for each eligible EICP participant will be based upon a standard award as set forth in the table below. The total amount of a participant’s Annual Award shall be computed according to the annual award formula set forth in Section 3.2. The Standard Award Amounts are subject to

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adjustment by the President and CEO of CMS Energy Corporation as indicated by market practices.

Salary Grade	Full time Standard Award Amount	Part time Standard Award Amount
25	$18,500	$9,250
24	$18,250	$9,125
23	$11,250	$5,625
22	$11,000	$5,500
21	$6,750	$3,375
20	$6,500	$3,250
19	$6,250	$3,125
18	$1,000	$500
17	$875	$438
16	$750	$375
15	$675	$338
14	$600	$300
13	$575	$288
12	$550	$275
11	$525	$263
10	$500	$250
9	$475	$238
8	$450	$225
7	$425	$213
6	$400	$200
5	$375	$188
4	$350	$175
3	$325	$163
2	$300	$150
1	$275	$138

3.2    Annual Awards for EICP participants will be calculated and made as follows:    

Annual Award = Standard Award Amount X Operational Award Level X 50% Plus Standard Target Amount X Financial Award Level X 50%

IV.PAYMENT OF ANNUAL AWARDS

4.1Cash Annual Award. All Annual Awards for a Performance Year will be paid in cash no later than March 15th of the calendar year following the Performance Year provided that the Annual Award for a particular Performance Year has not been deferred voluntarily pursuant to Section 4.2. The amounts required by law to be withheld for income and employment taxes will be deducted from the Annual Award

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payments. All Annual Awards become the obligation of the company on whose payroll the employee is enrolled at the time the Committee makes the Annual Award.

4.2Deferred Annual Awards.

(a)    The payment of all or any portion (rounded to an even multiple of 10%) of a cash Annual Award may be deferred voluntarily at the election of individual participants in salary grades 19-25. Any such deferral will be net of any applicable FICA or FUTA taxes. A separate irrevocable election must be made prior to the Performance Year. Any Annual Award made by the Committee after termination of employment of a participant or retirement of a participant will be paid in accordance with any deferral election made within the enrollment period.

(b)    At the time the participant makes a deferral election he or she must select the payment options (including the Payment Event as set forth at (c) below and the Payment Term as set forth at (d) below) applicable to the Deferred Annual Award for the Performance Year, as well as any earnings or income attributable to such amounts. The payment options elected will apply only to that year’s Deferred Annual Award and will not apply to any previous Deferred Annual Award or to any subsequent Deferred Annual Award. Any participant who elects to defer all or a portion of an Annual Award and who fails to select a Payment Event, or a Payment Term will be presumed to have elected a Payment Event of Separation from Service in accordance with paragraph (c)(i) below and/or a Payment Term of a single sum.

(c)    The Payment Event elected can be either:

(i)    Separation from Service for any reason other than death. Payment will be made, or begin, in the later of: (1) January of the year following the year of the Separation from Service; or (2) the seventh month after the month of the Separation from Service. Later installments, if any, will be paid in January of the succeeding years. Effective for amounts deferred in 2019 and succeeding years, payment will be made, or begin, in the seventh month after the month of Separation from Service. Later installments, if any, will be paid in the same month of the succeeding years;

(ii)    Payment upon attainment of a date certain that is more than 1 year after the last day of the applicable Performance Year. Later installments, if any, will be paid in the same month of the succeeding years; or

(iii)    The later to occur of (i) or (ii) above.

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(d)    Payment Term. At the time of electing to defer an Annual Award, the participant must also elect how he or she wishes to receive any such payment from among the following options (the participant may elect a separate Payment Term for each Payment Event elected):

(i)    Payment in a single sum upon occurrence of the Payment Event.

(ii)    Payment of a series of annual installment payments over a period from two (2) years to fifteen (15) years following the Payment Event. Each installment payment shall be equal to a fractional amount of the balance in the account the numerator of which is one and the denominator of which is the number of installment payments remaining. Although initially such installment payments will be identical, actual payments may vary based upon investment performance. For example, a series of 5 installment payments will result in a payout of 1/5 of the account balance in the first installment, ¼ of the account balance (including investment gains or losses since the first installment date) in the second installment, etc.

(e)    Changes to Payment Options. Once a payment option has been elected, subsequent changes which would accelerate the receipt of benefits from the Plan are not permitted, except that the Plan Administrator, which is the Benefit Administration Committee as defined in the Savings Plan for Employees of Consumers Energy and other CMS Energy Companies (the “Savings Plan”), may at its discretion accelerate payments to the extent permitted by Code Section 409A and applicable regulations. A subsequent election to change the payment options related to a Payment Event, in order to delay a payment or to change the form of a payment, can only be made when all of the following conditions are satisfied:

(i)    such election may not take effect until at least 12 months after the date on which the election is made;

(ii)    the payment(s) with respect to which such election is made is deferred for a period of not less than 5 years from the date such payment would otherwise have been made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 5 years from the date the first installment was scheduled to be paid); and

(iii)    such election must be made not less than 12 months before the date the payment was previously scheduled to be made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 12 months before the first installment was scheduled to be paid), if the participant’s previous commencement date was a specified date.

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Effective January 1, 2016, the right to a series of installment payments is to be treated as a right to a series of separate payments to the extent permissible under Code Section 409A and any applicable regulations. When making a subsequent election with respect to the payment of any post-December 31, 2015 deferral, the participant may make a separate election with respect to each separate payment, provided that such election must result in all of the applicable Performance Year’s deferral with related earnings being paid in a single sum or in a series of annual payments over a period from two (2) to fifteen (15) consecutive years.

(f)    Investments. At the time of electing to voluntarily defer payment, the participant must elect how the Deferred Annual Award will be treated by the Company or Subsidiary. To the extent that any amounts deferred are placed in a rabbi trust with an independent Record Keeper, a participant who has previously deferred amounts under this Plan will automatically have his or her existing investment profile apply to this deferral also. Record Keeper means the person(s) or entity named as such by the Plan Administrator. All determinations of the available investment options by the Plan Administrator are final and binding upon participants. A participant may change the investment elections at any time prior to the payment of the benefit, subject to any restrictions imposed by the Plan Administrator, the plan Record Keeper or by any applicable laws and regulations. A participant not making an election will have amounts deferred treated as if in a Lifestyle Fund as defined in the Savings Plan applicable to the participant's age 65, rounded up, or such other investment as determined by the Plan Administrator. All gains and losses will be based upon the performance of the investments selected by the participant from the date the deferral is first credited to the nominal account. If the Company elects to fund its obligation as discussed below, then investment performance will be based on the balance as determined by the Record Keeper.

(g)    The amount of any Deferred Annual Award is to be satisfied from the general corporate funds of the company on whose payroll the Plan participant was enrolled prior to the payout beginning and are subject to the claims of general creditors of the company. This is an unfunded nonqualified deferred compensation plan. To the extent the Company elects to place funds with a trustee to pay its future obligations under this Plan, such amounts are placed for the convenience of the Company or Subsidiary, remain the property of the Company or Subsidiary and the participant shall have no right to such funds until properly paid in accordance with the provisions of this Plan. For administrative ease and convenience, such amounts may be referred to as participant accounts, but as such are a notional account only and are not the property of the participant. Such amounts remain subject to the claims of the creditors of the Company or Subsidiary.

(h)    Payment in the Event of an Unforeseeable Emergency. The participant may request that payments commence immediately upon the occurrence of an Unforeseeable Emergency as that term is defined in Code Section 409A and

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any applicable regulations. Generally, an unforeseeable emergency is a severe financial hardship resulting from an illness or accident of the participant or the participant’s spouse or dependent, loss of the participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. A distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the participant’s assets (without causing severe financial hardship), or by cessation of deferrals under this arrangement, the Savings Plan or other arrangements. Distributions because of an unforeseeable emergency shall not exceed the amount permitted under Section 409A and accordingly are limited to the amount reasonably necessary to satisfy the emergency need (after use of insurance proceeds, liquidation of assets, etc.) plus an amount to pay taxes reasonably anticipated as a result of the distribution. In the event any payment is made due to an unforeseeable emergency, all deferral elections for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year. For any participant receiving a hardship withdrawal under the Savings Plan, all deferral elections under this Plan for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year.

4.3Payment in the Event of Death.

(a)    A participant may name the beneficiary of his or her choice on a beneficiary form provided by the Company or Record Keeper, and the beneficiary shall receive, within 90 days of the participant’s death, in a single sum, all payments credited to the participant in the event that the participant dies prior to receipt of Deferred Annual Awards. If there is no beneficiary named at the time of participant's death or if the beneficiary does not survive the participant, the payment will be made to the participant’s estate. In no event may any recipient designate a year of payment for an amount payable upon the death of the participant.

(b)    A participant may change beneficiaries at any time, and the change will be effective as of the date the plan Record Keeper or the Company accepts the form as complete. The Company will not be liable for any payments made before receipt and acceptance of a written beneficiary request.

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V.CHANGE OF STATUS

Payments in the event of a change in status will not be made if no Annual Awards are made for the Performance Year.

5.1Pro-Rata Annual Awards. A new EICP participant, whether hired or promoted to the position, or an EICP employee promoted to a higher salary grade during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade.An EICP participant whose salary grade has been lowered, but whose employment is not terminated during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade. Awards will also be prorated for any change in full time or part time work status.

5.2Termination. An EICP participant whose employment is terminated pursuant to a violation of the Company code of conduct or other corporate policies will not be considered for or receive an Annual Award.

5.3Resignation. An EICP participant who resigns prior to payment (during or after a Performance Year) will not be eligible for an Annual Award. If the resignation is due to reasons such as a downsizing or reorganization, or the ill health of the employee or ill health in the immediate family, the employee may petition the Plan Administrator and may be considered, in the discretion of the Plan Administrator, for a pro rata Annual Award. The Plan Administrator's decision to approve or deny the request for a pro rata Annual Award shall be final.

5.4Death, Disability, Retirement, Leave of Absence. An EICP participant whose status as an active employee is changed during the Performance Year due to death, Disability, Retirement, or Leave of Absence (as determined by the Plan Administrator) will receive a pro rata Annual Award. An EICP participant whose employment is terminated following the Performance Year but prior to payment due to death, Disability or Retirement will continue to be eligible for an Annual Award for the Performance Year. Any such payment or Annual Award payable due to the death of the EICP participant will be made to the named beneficiary, or if no beneficiary is named or if the beneficiary doesn’t survive the EICP participant, then to the EICP participant’s estate no later than March 15 following the applicable Performance Year. Notwithstanding the above, an EICP participant who retires, is on disability or leave of absence and who becomes employed by a competitor of CMS Energy or Consumers Energy or their subsidiaries or affiliates prior to award payout will forfeit all rights to an Annual Award, unless prior approval of such employment has been granted by the Committee. A “competitor” shall mean an entity engaged in the business of (1) selling (a) electric power or natural gas at retail or wholesale within the State of Michigan or (b) electric power at wholesale within the market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Enterprises is located or (2) developing an electric generating plant

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within the State of Michigan or a market area in which an electric generating plant owned by a subsidiary.

5.5Payment Following Leave of Absence. Payment of an award for an EICP participant who is on leave of absence or Family Medical Leave Act leave at the time of payment shall be paid in the same payroll period as active employees. Payment of an award for an EICP participant who is laid-off at the time of payment shall be paid in the payroll period that is within an administratively reasonable time after returning to work, but no later than March 15 of the year following the year the participant has returned to work.

VI.MISCELLANEOUS

6.1Impact on Benefit Plans. Payments made under the Plan will be considered as earnings for the Supplemental Executive Retirement Plans (Salary Grades 24 and 25) but not for purposes of the Employees’ Savings Plan, Pension Plan, or other employee benefit programs.

6.2Impact on Employment. Neither the adoption of the Plan nor the granting of any Annual Award under the Plan will be deemed to create any right in any individual to be retained or continued in the employment of the Company or any corporation within the Company’s control group.

6.3Termination or Amendment of the Plan. The Company may amend or terminate the Plan at any time. Upon termination, any Deferred Annual Award accrued under the Plan and vested will remain in the Plan and be paid out in accordance with the Payment Elections previously selected. The Plan Administrator is authorized to make any amendments that are deemed necessary or desirable to comply with any applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and operation of the Plan. The Company may terminate the Plan and accelerate any benefits under the Plan, at its discretion, if it acts consistent in all manners with the requirements of Code Section 409A and any applicable regulations with respect to when a terminated plan may accelerate payment to a participant.

6.4Governing Law. The Plan will be governed and construed in accordance with the laws of the State of Michigan.

6.5Dispute Resolution. Any disputes related to the Plan must be brought to the Plan Administrator. The Plan Administrator is granted full discretionary authority to apply the terms of the Plan, make administrative rulings, interpret the Plan and make any other determinations with respect to the Plan. If the Plan Administrator makes a determination and the participant disagrees with or wishes to appeal the determination, the participant must appeal the decision to the Plan Administrator, in writing and not later than 60 days from when the determination was mailed to the participant. If the participant does not timely appeal the original determination, the participant has no further rights under the Plan with respect to the matter presented

8

in the claim. If the participant appeals the original determination and that appeal does not result in a mutually agreeable resolution, then the dispute shall be subject to final and binding arbitration before a single arbitrator selected by the parties to be conducted in Jackson, Michigan, provided the participant makes such request for arbitration in writing within 30 days of the final decision by the Plan Administrator. The arbitration will be conducted and finished within 90 days of the selection of the arbitrator. The parties shall share equally the cost of the arbitrator and of conducting the arbitration proceeding, but each party shall bear the cost of its own legal counsel and experts and other out-of-pocket expenditures. The arbitrator must use an arbitrary and capricious standard of review when considering any determinations and findings by the Plan Administrator.

VII.AMENDMENT TO REFLECT CODE SECTION 409A

7.1Code Section 409A. This Plan has been amended, effective as of January 1, 2005, to comply with the requirements of Section 409A of the Code. To the extent counsel determines additional amendments may be reasonable or desirable in order to comply with Code Section 409A, and any other applicable rules, laws and regulations, such changes shall be authorized with the approval of the Plan Administrator.

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EX-10.13

Exhibit 10.13

ANNUAL CMS ENTERPRISES EMPLOYEE INCENTIVE COMPENSATION PLAN

ANNUAL CMS ENTERPRISES EMPLOYEE INCENTIVE

COMPENSATION PLAN

I. GENERAL PROVISIONS

1.1    Purpose. The purpose of the Annual CMS Enterprises Employee Incentive Compensation Plan (“EEICP” or “Plan”) is to provide an equitable and competitive level of compensation that will permit CMS Enterprises and its subsidiaries to attract, retain and motivate their employees.

1.2    Effective Date. The Plan as described herein is effective as of January 1, 2014, as amended and revised January 1, 2016, August 4, 2017, December 1, 2018, December 1, 2019, February 1, 2020, May 16, 2021, December 1, 2021 and January 27, 2022.

1.3     Eligibility. Except as otherwise provided in this Section 1.3, regular non-union U.S. employees and Enterprises Officers who do not participate in a broad-based incentive plan contingent upon objectives and performance unique to the employees’ or Enterprises Officers’ subsidiary, affiliate, site and/or business unit, are eligible for participation in the EEICP Plan. An individual listed on the Company payroll records as a contract employee is not eligible for this Plan. Eligible regular non-union U.S. employees and Enterprises Officers who have received a performance rating of at least “Fully Effective” (also known as “Effective” or “Meets Expectations” or “Satisfactory” or “Fully Contributing”) for the Performance Year as documented on their annual performance, evaluation, feedback and development appraisal are eligible for participation in the EEICP. Any regular non-union employee or Enterprises Officer who has received a performance rating of less than “Fully Effective” (as defined above), such as under-performing (also known as “Needs Improvement”, “Under Performing”, “under-contributing” or (“U”)) for the Performance Year as documented on their annual performance, evaluation, feedback and development appraisal is not eligible for participation in the EEICP.

1.4Definitions. As used in this Plan, the following terms have the meaning described below:

(a)    “Annual Award” means an annual incentive award granted under the EEICP.

(b)    “Base Salary” means regular straight-time salary or wages paid to the employee or Enterprises Officer.

(c)    “CMS Energy” means CMS Energy Corporation, the parent of Consumers Energy Company and CMS Enterprises.

(d)    “CMS Enterprises” means CMS Enterprises Company, a wholly owned subsidiary of CMS Energy.

(e)     “Code” means the Internal Revenue Code of 1986, as amended.

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(f)     “Company” means CMS Enterprises.

(g)     “Deferred Annual Award” means the amount deferred pursuant to Section 4.2.

(h)     “Disability” means that a participant has terminated employment with the Company or a Subsidiary and is disabled, as that term is defined under Code Section 409A and any applicable regulations.

(i)    “Enterprises Officer” for purposes of this Plan means an elected officer of CMS Enterprises.

(j)     “Leave of Absence” for purposes of this Plan means a leave of absence that has been approved by the Company.

(k)     “Payment Event” means the time at which a Deferred Annual Award may be paid pursuant to Section 4.2.

(l)     “Payment Term” means the length of time for payment of a Deferred Annual Award under Section 4.2.

(m) “Pension Plan” means the Pension Plan for Employees of Consumers Energy and Other CMS Energy Companies.

(n)     “Performance Year” means the calendar year prior to the year in which an Annual Award is made under this Plan.

(o)     “Plan Administrator” is the Benefits Administration Committee appointed by the CMS Energy Chief Executive Officer and the CMS Energy Chief Financial Officer.

(p)    “Record Keeper” means the person(s) or entity named as such by the Plan Administrator.

(q)     “Retirement” means that a Plan participant is no longer an active employee or Enterprises Officer and qualifies for a retirement benefit other than a deferred vested retirement benefit under the Pension Plan. For a participant ineligible for coverage under the Pension Plan and covered instead under the Defined Company Contribution Plan, retirement occurs when there is a Separation from Service on or after age 55 with 5 or more years of service.

(r)     “Separation from Service” means an employee or Enterprises Officer retires or otherwise has a separation from service from the Company as defined under Code Section 409A and any applicable regulations. The Plan Administrator will determine, consistent with the requirements of Code Section 409A and any applicable regulations, to what extent a person on a leave of absence, including on paid sick leave pursuant to Company policy, has incurred a Separation from Service. Notwithstanding the above, a Separation from Service will occur consistent with Treasury Regulation Section 1.409A-1(h) when it is reasonably

2

anticipated that the level of service provided by the employee or Enterprises Officer will be no more than 45% of the average level of bona fide service performed by the employee or Enterprises Officer over the immediately preceding 36-month period.

(s)     “Standard Award Percentage” means the target award amount as a percentage of Base Salary as set forth in Section 3.1 of this Plan.

(t)     “Subsidiary” means any direct or indirect subsidiary of the Company.

II. CORPORATE PERFORMANCE GOALS

2.1In General. Each year the President of CMS Enterprises will establish the Performance Goals ("Goals") for the EEICP. The Goals will consist of between three and ten company specific performance criteria relating to such items as net income, cash flow, gross margin, revenue, customer service, safety and reliability. When establishing the Goals for a Performance Year, the President of CMS Enterprises will include the total number of criteria to be used for the year as well as the award percent for achievement of a specified number of the established criteria. The specific Goals will be communicated to employees and Enterprises Officers no later than March 31st of the Performance Year. The Award Formula may include additional adjustments based on financial performance goals relating to CMS Energy Corporation as determined by the Compensation and Human Resources Committee of the CMS Energy Board of Directors.

2.2    Plan Performance.The adjustments, if applicable, based on financial performance goals relating to CMS Energy used to calculate an Annual Award is capped at two times the Standard Award Percentage. The Goals for a Performance Year are established in a table relating specific performance results to specific performance goals. This table shall be created by the President of CMS Enterprises for each Performance Year.

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III. ANNUAL AWARD FORMULA

3.1    Annual Awards. Annual Awards for each eligible EEICP participant will be based upon a standard award percentage as set forth in the table below, with the exception of the Enterprises Officer participants, which will be set forth in Section 3.3. The total amount of a participant’s Annual Award shall be computed according to the annual award formula set forth in Section 3.2. The Standard Award Percentages stated in this Section 3.1 are subject to adjustment by the President of CMS Enterprises as indicated by market practices.

Salary	Standard Award Percentage of Base Salary
Grade	Full time	Part time
25	25%	25%
24	25%	25%
23	15%	15%
22	15%	15%
21	12%	12%
20	12%	12%
19	12%	12%
18	10%	10%
17	6%	6%
16	3%	3%
15	3%	3%
14	3%	3%
13	3%	3%
12	3%	3%
11	3%	3%
10	3%	3%
9	3%	3%
8	3%	3%
7	3%	3%
6	3%	3%
5	3%	3%
4	3%	3%
3	3%	3%

3.2     Annual Awards for EEICP participants will be calculated and made as follows:

Annual Award = Standard Award Percentage X Award percent for achievement of actual number of award criteria X Weighting for each award criteria

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3.3    Enterprises Officer Annual Awards. Annual Awards for each eligible EEICP Enterprises Officer participant will be based upon a standard award percentage as set forth in the table below:

Officer	Standard Award Percentage of Base Salary
President of CMS Enterprises		40%
Chief Operating Officer of CMS Enterprises		35%
Vice President of CMS Enterprises Development		30%

IV. ADMINISTRATION OF THE PLAN

(a)    The Plan is administered by the President of CMS Enterprises under the general direction of the CMS Energy Chief Executive Officer, Senior Vice President People & Culture, and Senior Vice President of Strategy

(b)    Each year, normally in January, but no later than March 30th of the Performance Year, the Senior Vice President of Strategy will approve the established Performance Goals for the Performance Year.

(c)    The Senior Vice President of Strategy, no later than March 31stof the calendar year following the Performance Year, will review for approval proposed Annual Awards as recommended by the President of CMS Enterprises.

(d)    The CMS Energy Chief Executive Officer reserves the right to modify the established Performance Goals with respect to unforeseeable circumstances or otherwise exercise discretion with respect to proposed Annual Awards as he or she deems necessary to maintain the spirit and intent of the EEICP, provided that if such discretion increases the Annual Award it does not exceed the computed performance factor by more than 20%. The CMS Energy Chief Executive Officer also reserves the right in his or her discretion to not pay Annual Awards or to reduce the amount of Annual Awards for a Performance Year. All decisions of the CMS Energy Chief Executive Officer are final.

V. PAYMENT OF ANNUAL AWARDS

5.1    Cash Annual Award. All Annual Awards for a Performance Year will be paid in cash no later than March 15th of the calendar year following the Performance Year provided that the Annual Award for a particular Performance Year has not been deferred voluntarily pursuant to Section 4.2. The amounts required by law to be withheld for income and employment taxes will be deducted from the Annual Award payments. All

5

Annual Awards become the obligation of the company on whose payroll the employee or Enterprises Officer is enrolled at the time CMS Enterprises makes the Annual Award.

5.2Deferred Annual Awards.

(a)    The payment of all or any portion (rounded to an even multiple of 10%) of a cash Annual Award may be deferred voluntarily at the election of individual participants in salary grades 19-25. Any such deferral will be net of any applicable FICA or FUTA taxes. A separate irrevocable election must be made prior to the Performance Year. Any Annual Award made by CMS Enterprises after termination of employment of a participant or retirement of a participant will be paid in accordance with any deferral election made within the enrollment period.

(b)    At the time the participant makes a deferral election he or she must select the payment options (including the Payment Event as set forth at (c) below and the Payment Term as set forth at (d) below) applicable to the Deferred Annual Award for the Performance Year, as well as any earnings or income attributable to such amounts. The payment options elected will apply only to that year’s Deferred Annual Award and will not apply to any previous Deferred Annual Award or to any subsequent Deferred Annual Award. Any participant who elects to defer all or a portion of an Annual Award and who fails to select a Payment Event or a Payment Term will be presumed to have elected a Payment Event of Separation from Service in accordance with paragraph (c)(i) below and/or a Payment Term of a single sum.

(c)    The Payment Event elected can be either:

(i)    Separation from Service for any reason other than death. Payment will be made, or begin, in the later of: (1) January of the year following the year of the Separation from Service; or (2) the seventh month after the month of the Separation from Service. Later installments, if any, will be paid in January of the succeeding years. Effective for amounts deferred in 2019 and succeeding years, payment will be made, or begin, in the seventh month after the month of Separation from Service. Later installments, if any, will be paid in the same month of the succeeding years;

(ii)    Payment upon attainment of a date certain that is more than 1 year after the last day of the applicable Performance Year. Later installments, if any, will be paid in the same month of the succeeding years; or

(iii)    The later to occur of (i) or (ii) above.

(d)    Payment Term. At the time of electing to defer an Annual Award, the participant must also elect how he or she wishes to receive any such payment from among the following options (the participant may elect a separate Payment Term for each Payment Event elected):

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(i)    Payment in a single sum upon occurrence of the Payment Event.

(ii)    Payment of a series of annual installment payments over a period from two (2) years to fifteen (15) years following the Payment Event. Each installment payment shall be equal to a fractional amount of the balance in the account the numerator of which is one and the denominator of which is the number of installment payments remaining. Although initially such installment payments will be identical, actual payments may vary based upon investment performance. For example, a series of 5 installment payments will result in a payout of 1/5 of the account balance in the first installment, ¼ of the account balance (including investment gains or losses since the first installment date) in the second installment, etc.

(e)    Changes to Payment Options. Once a payment option has been elected, subsequent changes which would accelerate the receipt of benefits from the Plan are not permitted, except that the Plan Administrator, which is the Benefit Administration Committee as defined in the Savings Plan for Employees of Consumers Energy and other CMS Energy Companies (the “Savings Plan”), may at its discretion accelerate payments to the extent permitted by Code Section 409A and applicable regulations. A subsequent election to change the payment options related to a Payment Event, in order to delay a payment or to change the form of a payment, can only be made when all of the following conditions are satisfied:

(i)    such election may not take effect until at least 12 months after the date on which the election is made;

(ii)    the payment(s) with respect to which such election is made is deferred for a period of not less than 5 years from the date such payment would otherwise have been made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 5 years from the date the first installment was scheduled to be paid); and

(iii)    such election must be made not less than 12 months before the date the payment was previously scheduled to be made (or, in the case of installment payments under Section 4.2(d)(ii) with regard to amounts deferred (and the related earnings) prior to January 1, 2016, 12 months before the first installment was scheduled to be paid), if the participant’s previous commencement date was a specified date.

Effective January 1, 2016, the right to a series of installment payments is to be treated as a right to a series of separate payments to the extent permissible under Code Section 409A and any applicable regulations. When making a subsequent election with respect to the payment of any post-December 31, 2015 deferral, the participant may make a separate election with respect to each separate payment, provided that such election must result in all of the

7

applicable Performance Year’s deferral with related earnings being paid in a single sum or in a series of annual payments over a period from two (2) to fifteen (15) consecutive years.

(f)    Investments. At the time of electing to voluntarily defer payment, the participant must elect how the Deferred Annual Award will be treated by CMS Enterprises. To the extent that any amounts deferred are placed in a rabbi trust with an independent Record Keeper, a participant who has previously deferred amounts under this Plan will automatically have his or her existing investment profile apply to this deferral also. All determinations of the available investment options by the Plan Administrator are final and binding upon participants. A participant may change the investment elections at any time prior to the payment of the benefit, subject to any restrictions imposed by the Plan Administrator, the plan Record Keeper or by any applicable laws and regulations. A participant not making an election will have amounts deferred treated as if in a Lifestyle Fund as defined in the Savings Plan applicable to the participant's age 65, rounded up, or such other investment as determined by the Plan Administrator. All gains and losses will be based upon the performance of the investments selected by the participant from the date the deferral is first credited to the nominal account. If the Company elects to fund its obligation as discussed below, then investment performance will be based on the balance as determined by the Record Keeper.

(g)    The amount of any Deferred Annual Award is to be satisfied from the general corporate funds of the company on whose payroll the Plan participant was enrolled prior to the payout beginning and are subject to the claims of general creditors of the Company. This is an unfunded nonqualified deferred compensation plan. To the extent the Company elects to place funds with a trustee to pay its future obligations under this Plan, such amounts are placed for the convenience of CMS Enterprises, remain the property of CMS Enterprises and the participant shall have no right to such funds until properly paid in accordance with the provisions of this Plan. For administrative ease and convenience, such amounts may be referred to as participant accounts, but as such are a notional account only and are not the property of the participant. Such amounts remain subject to the claims of the creditors of CMS Enterprises.

(h)    Payment in the Event of an Unforeseeable Emergency. The participant may request that payments commence immediately upon the occurrence of an Unforeseeable Emergency as that term is defined in Code Section 409A and any applicable regulations. Generally, an unforeseeable emergency is a severe financial hardship resulting from an illness or accident of the participant or the participant’s spouse or dependent, loss of the participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant. A distribution on account of unforeseeable emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the participant’s assets (without causing severe financial hardship), or by cessation of deferrals

8

under this arrangement, the Savings Plan or other arrangements. Distributions because of an unforeseeable emergency shall not exceed the amount permitted under Section 409A and accordingly are limited to the amount reasonably necessary to satisfy the emergency need (after use of insurance proceeds, liquidation of assets, etc.) plus an amount to pay taxes reasonably anticipated as a result of the distribution. In the event any payment is made due to an unforeseeable emergency, all deferral elections for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year. For any participant receiving a hardship withdrawal under the Savings Plan, all deferral elections under this Plan for the current Performance Year will cease and the participant will not be eligible to make any deferral elections under this Plan for the following Performance Year.

5.3 Payment in the Event of Death.

(a)    A participant may name the beneficiary of his or her choice on a beneficiary form provided by the Company or record keeper, and the beneficiary shall receive, within 90 days of the participant’s death, in a single sum, all payments credited to the participant in the event that the participant dies prior to receipt of Deferred Annual Awards. If there is no beneficiary named at the time of participant’s death or if the beneficiary does not survive the participant, the payment will be made to the participant’s estate. In no event may any recipient designate a year of payment for an amount payable upon the death of the participant.

(b)    A participant may change beneficiaries at any time, and the change will be effective as of the date the plan record keeper or the Company accepts the form as complete. The Company will not be liable for any payments made before receipt and acceptance of a written beneficiary request.

VI.    CHANGE OF STATUS

Payments in the event of a change in status will not be made if no Annual Awards are made for the Performance Year.

6.1    Pro-Rata Annual Awards. A new EEICP participant, whether hired or promoted to the position, or an EEICP participant promoted to a higher salary grade or to an Enterprises Officer position during the Performance Year will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade or Enterprises Officer position.An EEICP participant whose salary grade has been lowered or who is no longer an Enterprises Officer, but whose employment is not terminated during the Performance Year, will receive a pro rata Annual Award based on the percentage of the Performance Year in which the employee is in a particular salary grade or Enterprises Officer position. Awards will also be prorated for any change in full time or part time work status.

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6.2    Termination. An EEICP participant whose employment is terminated pursuant to a violation of the Company code of conduct or other corporate policies will not be considered for or receive an Annual Award.

6.3    Resignation. An EEICP participant who resigns prior to payment (during or after a Performance Year) will not be eligible for an Annual Award. If the resignation is due to reasons such as a downsizing or reorganization, or the ill health of the participant or ill health in the immediate family, the participant may petition the Plan Administrator and may be considered, in the discretion of the Plan Administrator, for a pro rata Annual Award. The Plan Administrator's decision to approve or deny the request for a pro rata Annual Award shall be final.

6.4    Death, Disability, Retirement, Leave of Absence. An EEICP participant whose status as an active employee or Enterprises Officer is changed during the Performance Year due to death, Disability, Retirement, or Leave of Absence (as determined by the Plan Administrator) will receive a pro rata Annual Award. An EEICP participant whose employment is terminated following the Performance Year but prior to payment due to death, Disability or Retirement will continue to be eligible for an Annual Award for the Performance Year. Any such payment or Annual Award payable due to the death of the EEICP participant will be made to the named beneficiary, or if no beneficiary is named or if the beneficiary doesn’t survive the EEICP participant, then to the EEICP participant’s estate no later than March 15 following the applicable Performance Year. Notwithstanding the above, an EEICP participant who retires, is on Disability or Leave of Absence and who becomes employed by a competitor of CMS Energy or its subsidiaries or affiliates prior to award payout will forfeit all rights to an Annual Award, unless prior approval of such employment has been granted by the Chief Financial Officer of CMS Energy. A “competitor” shall mean an entity engaged in the business of (1) selling (a) electric power or natural gas at retail or wholesale within the State of Michigan or (b) electric power at wholesale within the market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Energy is located or (2) developing an electric generating plant within the State of Michigan or a market area in which an electric generating plant owned by a subsidiary or affiliate of CMS Energy is located.

6.5    Payment Following Leave of Absence. Payment of an award for an EEICP participant who is on leave of absence or Family Medical Leave Act leave at the time of payment shall be paid in the same payroll period as active participants. Payment of an award for an EEICP participant who is laid-off at the time of payment shall be paid in the payroll period that is within an administratively reasonable time after returning to work, but no later than March 15 of the year following the year the participant has returned to work.

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VII. MISCELLANEOUS

7.1    Impact on Benefit Plans. Payments for eligible participants made under the Plan will be considered as earnings for the Supplemental Executive Retirement Plans but not for purposes of the Employees’ Savings Plan, Pension Plan, or other employee benefit programs.

7.2    Impact on Employment. Neither the adoption of the Plan nor the granting of any Annual Award under the Plan will be deemed to create any right in any individual to be retained or continued in the employment of the Company or any corporation within the Company’s control group.

7.3    Termination or Amendment of the Plan. The Company may amend or terminate the Plan at any time. Upon termination, any Deferred Annual Award accrued under the Plan and vested will remain in the Plan and be paid out in accordance with the payment elections previously selected. The Plan Administrator is authorized to make any amendments that are deemed necessary or desirable to comply with any applicable laws, regulations or orders or as may be advised by counsel or to clarify the terms and operation of the Plan. The Company may terminate the Plan and accelerate any benefits under the Plan, at its discretion, if it acts consistent in all manners with the requirements of Code Section 409A and any applicable regulations with respect to when a terminated plan may accelerate payment to a participant.

7.4    Governing Law. The Plan will be governed and construed in accordance with the laws of the State of Michigan.

7.5    Dispute Resolution. Any disputes related to the Plan must be brought to the Plan Administrator. The Plan Administrator is granted full discretionary authority to apply the terms of the Plan, make administrative rulings, interpret the Plan and make any other determinations with respect to the Plan. If the Plan Administrator makes a determination and the participant disagrees with or wishes to appeal the determination, the participant must appeal the decision to the Plan Administrator, in writing and not later than 60 days from when the determination was mailed to the participant. If the participant does not timely appeal the original determination, the participant has no further rights under the Plan with respect to the matter presented in the claim. If the participant appeals the original determination and that appeal does not result in a mutually agreeable resolution, then the dispute shall be subject to final and binding arbitration before a single arbitrator selected by the parties to be conducted in Jackson, Michigan, provided the participant makes such request for arbitration in writing within 30 days of the final decision by the Plan Administrator. The arbitration will be conducted and finished within 90 days of the selection of the arbitrator. The parties shall share equally the cost of the arbitrator and of conducting the arbitration proceeding, but each party shall bear the cost of its own legal counsel and experts and other out-of-pocket expenditures. The arbitrator must use an arbitrary and capricious standard of review when considering any determinations and findings by the Plan Administrator.

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VIII. AMENDMENT TO REFLECT CODE SECTION 409A

8.1    Code Section 409A. To the extent counsel determines amendments may be reasonable or desirable in order to comply with Code Section 409A, and any other applicable rules, laws and regulations, such changes shall be authorized with the approval of the Plan Administrator.

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EX-21.1

Exhibit 21.1

For the purpose of this filing, information is organized under the headings of CMS Energy Corporation (Tier 1), CMS Capital, L.L.C. (Tier 2), CMS Enterprises Company (Tier 2), CMS Treasury Services, LLC (Tier 2), and Consumers Energy Company (Tier 2). As set forth in detail below, CMS Energy Corporation is the parent company of CMS Capital, L.L.C., CMS Enterprises Company, CMS Treasury Services, LLC, and Consumers Energy Company. All ownership interests are 100 percent unless indicated parenthetically to the contrary and are accurate as of December 31, 2021.

NAME of COMPANY	JURISDICTION of ORGANIZATION
01 CMS ENERGY CORPORATION	Michigan
02 CMS Capital, L.L.C.	Michigan
03 CMS Land Company	Michigan
02 CMS Enterprises Company	Michigan
03 Dearborn Industrial Energy, L.L.C.	Michigan
04 Dearborn Industrial Generation, L.L.C.	Michigan
03 CMS Energy Resource Management Company	Michigan
04 CMS ERM Michigan LLC	Michigan
04 CMS Viron Corporation	Missouri
03 CMS Enterprises Sustainable Energy, LLC	Michigan
04 Minnigan Holdco, LLC (50%)	Delaware
04 Grand River Solar, LLC	Michigan
05 Delta Solar Power I, LLC	Michigan
05 Delta Solar Power II, LLC	Michigan
05 Flambeau Solar Partners, LLC	Delaware
05 Hart Solar Holdings II, LLC	Delaware
06 Hart Solar Holdings I, LLC	Delaware
07 Hart Solar Partners, LLC	Delaware
05 Newport Solar Equity Holdings, LLC	Delaware
06 Newport Solar Holdings II, LLC	Delaware
07 Newport Solar Holdings I, LLC	Delaware
08 Newport Solar, LLC	Delaware
04 Grand River Wind, LLC	Michigan
05 NWO Wind Equity Holdings, LLC	Delaware
06 NWO Holdco I, LLC	Delaware
07 NWO Holdco, L.L.C.	Delaware
08 Northwest Ohio Wind, LLC	Ohio
05 Northwest Ohio Solar, LLC	Ohio
05 Aviator Wind Equity Holdings, LLC (51%)	Delaware
06 AW Holdings III, LLC	Delaware
07 AW Holdings II, LLC	Delaware
08 AW Holdings I, LLC	Delaware
09 Aviator Wind Holdings, LLC	Delaware
10 Aviator Wind, LLC	Delaware
03 CMS Gas Transmission Company	Michigan
04 CMS International Ventures, L.L.C. (37.01%)     (See Exhibit A for list of subsidiaries)	Michigan

NAME of COMPANY	JURISDICTION of ORGANIZATION
03 CMS International Ventures, L.L.C. (61.49%)     (See Exhibit A for list of subsidiaries)	Michigan
03 HYDRA‑CO Enterprises, Inc.     (See Exhibit B for list of subsidiaries)	New York
02 CMS Treasury Services, LLC	Michigan
02 Consumers Energy Company	Michigan
Conducts business under the following assumed names:
Consumers Business Energy Services
Consumers Energy
Consumers Energy Business Services
Consumers Energy Consultants
Consumers Energy Contractor Network
Consumers Energy Dealer Network
Consumers Energy Finance
Consumers Energy Fitness Audits
Consumers Energy Group
Consumers Energy HouseCall
Consumers Energy HouseCall Services
Consumers Energy Management
Consumers Energy Resources
Consumers Energy Security Services
Consumers Energy Services
Consumers Energy Systems
Consumers Energy Traders
Consumers Power
Consumers Power Company
Laboratory Commercial Services
Laboratory Services
Michigan Gas Storage
Michigan Gas Storage Company
Technical Training Centers
Zeeland Power Company
03 CMS Engineering Co.	Michigan
03 Consumers 2014 Securitization Funding LLC	Delaware
03 Consumers Campus Holdings, LLC	Michigan
03 Consumers Receivables Funding II, LLC	Delaware
03 ES Services Company	Michigan

Exhibit A

Subsidiaries of CMS International Ventures, L.L.C.

NAME of COMPANY	JURISDICTION of ORGANIZATION
04 CMS Electric & Gas, L.L.C.	Michigan
05 CMS Venezuela, S.A.	Venezuela
05 ENELMAR S.A.	Venezuela

Exhibit B

Subsidiaries of HYDRA‑CO Enterprises, Inc.

NAME of COMPANY	JURISDICTION of ORGANIZATION
04 CMS Generation Filer City, Inc.	Michigan
05 T.E.S. Filer City Station Limited Partnership (50%)	Michigan
04 CMS Generation Filer City Operating LLC	Michigan
04 CMS Generation Genesee Company	Michigan
05 Genesee Power Station Limited Partnership (1% GP)	Delaware
04 CMS Generation Grayling Company	Michigan
05 Grayling Generating Station Limited Partnership (1% GP)	Michigan
06 AJD Forest Products Limited Partnership (49.5% LP)	Michigan
06 GGS Holdings Company	Michigan
07 AJD Forest Products Limited Partnership (0.5% GP)	Michigan
05 Grayling Partners Land Development, L.L.C. (1%)	Michigan
04 CMS Generation Grayling Holdings Company	Michigan
05 Grayling Generating Station Limited Partnership (49% LP)	Michigan
06 AJD Forest Products Limited Partnership (49.5%LP)	Michigan
06 GGS Holdings Company	Michigan
07 AJD Forest Products Limited Partnership (0.5% GP)	Michigan
05 Grayling Partners Land Development, L.L.C. (49%)	Michigan
04 CMS Generation Holdings Company	Michigan
05 Genesee Power Station Limited Partnership (48.75% LP)	Delaware
05 GPS Newco, L.L.C. (50%)	Kansas
06 Genesee Power Station Limited Partnership (0.5% LP)	Delaware
04 CMS Generation Michigan Power L.L.C.	Michigan
04 CMS Generation Operating Company II, Inc.	New York
04 CMS Generation Operating LLC	Michigan
04 CMS Generation Recycling Company	Michigan
05 Mid-Michigan Recycling, L.C. (50%)	Michigan
04 Craven County Wood Energy Limited Partnership (44.99% LP)	Delaware
04 Dearborn Generation Operating, L.L.C.	Michigan
04 HCE-Biopower, Inc.	New York
05 IPP Investment Partnership (51%)
06 Craven County Wood Energy Limited Partnership (0.01% LP)	Delaware
04 IPP Investment Partnership (49%)
05 Craven County Wood Energy Limited Partnership (0.01% LP)	Delaware
04 New Bern Energy Recovery, Inc.	Delaware
05 Craven County Wood Energy Limited Partnership (5% GP)	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statements on Form S‑8 (No. 333‑238842) and Form S‑3 (Nos. 333‑236742 and 333‑249643) of CMS Energy Corporation of our report dated February 10, 2022 relating to the financial statements, financial statement schedules and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2022

EX-23.2

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We hereby consent to the incorporation by reference in the Registration Statement on Form S‑3 (No. 333‑236742‑01) of Consumers Energy Company of our report dated February 10, 2022 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10‑K.

/s/ PricewaterhouseCoopers LLP

Detroit, Michigan

February 10, 2022

EX-31.1

Exhibit 31.1

Certification of Garrick J. Rochow

I, Garrick J. Rochow, certify that:

1.I have reviewed this annual report on Form 10-K of CMS Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 10, 2022	By:	/s/ Garrick J. Rochow
		Garrick J. Rochow
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Rejji P. Hayes

I, Rejji P. Hayes, certify that:

1.I have reviewed this annual report on Form 10-K of CMS Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 10, 2022	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

Certification of Garrick J. Rochow

I, Garrick J. Rochow, certify that:

1.I have reviewed this annual report on Form 10-K of Consumers Energy Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 10, 2022	By:	/s/ Garrick J. Rochow
		Garrick J. Rochow
		President and Chief Executive Officer

EX-31.4

Exhibit 31.4

Certification of Rejji P. Hayes

I, Rejji P. Hayes, certify that:

1.I have reviewed this annual report on Form 10-K of Consumers Energy Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: February 10, 2022	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of CMS Energy Corporation (the “Company”) for the annual period endedDecember 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Garrick J. Rochow, as President and Chief Executive Officer of the Company, and Rejji P. Hayes, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Garrick J. Rochow
Name:	Garrick J. Rochow
Title:	President and Chief Executive Officer
Date:	February 10, 2022
/s/ Rejji P. Hayes
Name:	Rejji P. Hayes
Title:	Executive Vice President and Chief Financial Officer
Date:	February 10, 2022

EX-32.2

Exhibit 32.2

Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Consumers Energy Company (the “Company”) for the annual period endedDecember 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Garrick J. Rochow, as President and Chief Executive Officer of the Company, and Rejji P. Hayes, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Garrick J. Rochow
Name:	Garrick J. Rochow
Title:	President andChief Executive Officer
Date:	February 10, 2022
/s/ Rejji P. Hayes
Name:	Rejji P. Hayes
Title:	Executive Vice President and Chief Financial Officer
Date:	February 10, 2022

XML

Cover Page - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Jan. 14, 2022	Jun. 30, 2021
Document Information [Line Items]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2021
Current Fiscal Year End Date	--12-31
Document Transition Report	false
Entity File Number	1-9513
Entity Registrant Name	CMS ENERGY CORPORATION
Entity Tax Identification Number	38-2726431
Entity Incorporation, State or Country Code	MI
Entity Address, Address Line One	One Energy Plaza
Entity Address, City or Town	Jackson
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49201
City Area Code	517
Local Phone Number	788‑0550
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filer	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 17,113
Entity Common Stock, Shares Outstanding		289,760,265
Entity Central Index Key	0000811156
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	FY
Amendment Flag	false
Documents Incorporated by Reference	CMS Energy’s and Consumers’ proxy statement relating to their 2022 Annual Meetings of Shareholders to be held May 6, 2022.
Consumers Energy Company
Document Information [Line Items]
Entity File Number	1-5611
Entity Registrant Name	CONSUMERS ENERGY COMPANY
Entity Tax Identification Number	38-0442310
Entity Incorporation, State or Country Code	MI
Entity Address, Address Line One	One Energy Plaza
Entity Address, City or Town	Jackson
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49201
City Area Code	517
Local Phone Number	788‑0550
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filer	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		84,108,789
Entity Central Index Key	0000201533
CMS Energy Corporation Common Stock, $0.01 par value
Document Information [Line Items]
Title of 12(b) Security	CMS Energy Corporation Common Stock
Trading Symbol	CMS
Security Exchange Name	NYSE
CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078
Document Information [Line Items]
Title of 12(b) Security	CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078
Trading Symbol	CMSA
Security Exchange Name	NYSE
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078
Document Information [Line Items]
Title of 12(b) Security	CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078
Trading Symbol	CMSC
Security Exchange Name	NYSE
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079
Document Information [Line Items]
Title of 12(b) Security	CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079
Trading Symbol	CMSD
Security Exchange Name	NYSE
CMS Energy Corporation Depositary Shares, each representing a 1/1,000th interest in a share of 4.200% Cumulative Redeemable Perpetual Preferred Stock, Series C
Document Information [Line Items]
Title of 12(b) Security	CMS Energy Corporation Depositary Shares
Trading Symbol	CMS PRC
Security Exchange Name	NYSE
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series
Document Information [Line Items]
Title of 12(b) Security	Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series
Trading Symbol	CMS-PB
Security Exchange Name	NYSE

XML

Audit Information	12 Months Ended
	Dec. 31, 2021
Document Information [Line Items]
Auditor Firm ID	238
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Detroit, Michigan
Consumers Energy Company
Document Information [Line Items]
Auditor Firm ID	238
Auditor Name	PricewaterhouseCoopers LLP
Auditor Location	Detroit, Michigan

XML

CMS Energy Corporation Consolidated Statements of Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Revenue	$ 7,329	$ 6,418	$ 6,624
Operating Expenses
Fuel for electric generation	593	375	493
Purchased power – related parties	77	64	75
Maintenance and other operating expenses	1,610	1,280	1,356
Depreciation and amortization	1,114	1,043	989
General taxes	389	357	331
Total operating expenses	6,183	5,188	5,509
Operating Loss	1,146	1,230	1,115
Other Income (Expense)
Interest income	3	4	7
Interest income – related parties	0	7	0
Allowance for equity funds used during construction	8	6	10
Income from equity method investees	10	5	10
Non-operating retirement benefits, net	165	118	91
Other income	9	6	4
Other expense	(18)	(62)	(13)
Total other income	177	84	109
Interest Charges
Interest on long-term debt	481	483	439
Interest expense – related parties	12	12	9
Other interest expense	10	12	16
Allowance for borrowed funds used during construction	(3)	(2)	(4)
Total interest charges	500	505	460
Income Before Income Taxes	823	809	764
Income Tax Expense	95	115	131
Income From Continuing Operations	728	694	633
Income From Discontinued Operations, Net of Tax of $170, $18, and $16	602	58	49
Net Income	1,330	752	682
Income (Loss) Attributable to Noncontrolling Interests	(23)	(3)	2
Net Income Attributable to CMS Energy	1,353	755	680
Preferred Stock Dividends	5	0	0
Net Income Available to Common Stockholders	$ 1,348	$ 755	$ 680
Basic earnings per average common share, income from continuing operations per average common share available to common stockholders (in dollars per share)	$ 2.58	$ 2.45	$ 2.23
Basic earnings per average common share, income from discontinued operations per average common share available to common stockholders (in dollars per share)	2.08	0.20	0.17
Basic earnings per average common share (in dollars per share)	4.66	2.65	2.40
Diluted earnings per average common share, income from continuing operations per average common share available to common stockholders (in dollars per share)	2.58	2.44	2.22
Diluted earnings per average common share, income from discontinued operations per average common share available to common stockholders (in dollars per share)	2.08	0.20	0.17
Diluted earnings per average common share (in dollars per share)	$ 4.66	$ 2.64	$ 2.39
Purchased and interchange power
Operating Expenses
Cost of goods and services sold	$ 1,665	$ 1,492	$ 1,496
Cost of gas sold
Operating Expenses
Cost of goods and services sold	$ 735	$ 577	$ 769

XML

CMS Energy Corporation Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net Income	$ 1,330	$ 752	$ 682
Retirement Benefits Liability
Net loss arising during the period, net of tax	19	(15)	(7)
Settlement arising during the period, net of tax	1	1	0
Prior service credit adjustment	0	(1)	0
Amortization of net actuarial loss, net of tax	5	5	3
Amortization of prior service credit	(1)	(1)	(2)
Derivatives
Unrealized loss on derivative instruments, net of tax	2	(4)	(3)
Reclassification adjustments included in net income, net of tax	1	2	1
Other Comprehensive Income (Loss)	27	(13)	(8)
Comprehensive Income	1,357	739	674
Comprehensive Income (Loss) Attributable to Noncontrolling Interests	(23)	(3)	2
Comprehensive Income Attributable to CMS Energy	$ 1,380	$ 742	$ 672

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CMS Energy Corporation Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Statement of Comprehensive Income [Abstract]
Net gain (loss) arising during the period, tax	$ 6	$ (4)	$ (3)
Settlement arising during the period, tax	0	0	0
Prior service credit adjustment, tax	0	0	0
Amortization of net actuarial loss, tax	2	1	1
Amortization of prior service credit, tax	0	0	0
Unrealized gain (loss) on derivative instruments, tax	0	(2)	(1)
Reclassification adjustments included in net income , tax	$ 1	$ 0	$ 0

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CMS Energy Corporation Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash Flows from Operating Activities
Net Income	$ 1,330	$ 752	$ 682
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,114	1,043	989
Deferred income taxes and investment tax credits	249	170	150
Bad debt expense	22	30	30
Postretirement benefits contributions	(12)	(712)	(10)
Other non‑cash operating activities and reconciling adjustments	(70)	(15)	(55)
Net cash provided by (used in) discontinued operations	(111)	33	39
Changes in assets and liabilities
Accounts receivable and accrued revenue	(103)	(5)	48
Inventories	(93)	28	44
Accounts payable and accrued rate refunds	153	56	(71)
Other current assets and liabilities	13	(68)	(93)
Other non‑current assets and liabilities	(16)	(36)	37
Net cash provided by operating activities	1,819	1,276	1,790
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(2,076)	(2,311)	(2,097)
Net proceeds from sale of EnerBank	898	0	0
Proceeds from sale of transmission equipment	0	58	97
Net cash provided by (used in) discontinued operations	78	(485)	(689)
Cost to retire property and other investing activities	(133)	(129)	(127)
Net cash used in investing activities	(1,233)	(2,867)	(2,816)
Cash Flows from Financing Activities
Proceeds from issuance of debt	335	3,179	2,151
Retirement of debt	(235)	(2,010)	(1,285)
Decrease in notes payable	0	(90)	(7)
Issuance of common stock, net of issuance costs	26	253	12
Issuance of preferred stock, net of issuance costs	224	0	0
Payment of dividends on common and preferred stock	(509)	(467)	(436)
Debt prepayment costs	0	(59)	(8)
Proceeds from the sale of membership interest in VIE to tax equity investor	0	417	0
Contribution from noncontrolling interest	1	31	0
Net cash provided by (used in) discontinued operations	(84)	416	631
Other financing costs	(53)	(51)	(50)
Net cash provided by (used in) financing activities	(295)	1,619	1,008
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts	291	28	(18)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	185	157	175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	476	185	157
Cash transactions
Interest paid (net of amounts capitalized)	489	549	498
Income taxes paid (refunds received), net	16	(58)	(58)
Non‑cash transactions
Capital expenditures not paid	196	141	170
Discontinued Operations | EnerBank
Adjustments to reconcile net income to net cash provided by operating activities
Gain from sale of EnerBank	$ (657)	$ 0	$ 0

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CMS Energy Corporation Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 452	$ 32
Restricted cash and cash equivalents	24	17
Accounts receivable and accrued revenue	931	853
Accounts receivable – related parties	12	19
Inventories at average cost
Gas in underground storage	462	353
Materials and supplies	168	155
Generating plant fuel stock	37	68
Deferred property taxes	356	332
Regulatory assets	46	42
Assets held for sale	19	429
Prepayments and other current assets	120	104
Total current assets	2,627	2,404
Plant, Property, and Equipment
Plant, property, and equipment, gross	29,893	27,870
Less accumulated depreciation and amortization	8,502	7,938
Plant, property, and equipment, net	21,391	19,932
Construction work in progress	961	1,085
Total plant, property, and equipment	22,352	21,017
Other Non‑current Assets
Regulatory assets	2,259	2,653
Accounts receivable	30	19
Investments	71	70
Assets held for sale	0	2,680
Other	1,414	823
Total other non‑current assets	3,774	6,245
Total Assets	28,753	29,666
Current Liabilities
Current portion of long-term debt, finance leases, and other financing	382	591
Accounts payable	875	661
Accounts payable – related parties	11	7
Accrued rate refunds	12	20
Accrued interest	107	104
Accrued taxes	515	454
Regulatory liabilities	146	151
Liabilities held for sale	0	953
Other current liabilities	156	133
Total current liabilities	2,204	3,074
Non‑current Liabilities
Long-term debt	12,046	11,744
Non-current portion of finance leases and other financing	46	56
Regulatory liabilities	3,802	3,744
Postretirement benefits	142	152
Asset retirement obligations	628	553
Deferred investment tax credit	112	115
Deferred income taxes	2,210	1,863
Liabilities held for sale	0	1,894
Other non‑current liabilities	375	394
Total non‑current liabilities	19,361	20,515
Commitments and Contingencies
Common stockholders’ equity
Common stock	3	3
Other paid-in capital	5,406	5,365
Accumulated other comprehensive loss	(59)	(86)
Retained earnings	1,057	214
Total common stockholders’ equity	6,407	5,496
Cumulative preferred stock	224	0
Total stockholders’ equity	6,631	5,496
Noncontrolling interests	557	581
Total equity	7,188	6,077
Total Liabilities and Equity	$ 28,753	$ 29,666

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CMS Energy Corporation Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Accounts receivable and accrued revenue, allowance	$ 20	$ 29
Common stock authorized (in shares)	350,000,000	350,000,000.0
Common stock outstanding (in shares)	289,800,000	288,900,000
Preferred stock authorized (in shares)	10,000,000
Series C Preferred Stock Depositary Shares
Preferred stock outstanding (in shares)	9,200,000
Preferred stock authorized (in shares)	9,200,000

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CMS Energy Corporation Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Common Stock	Other Paid-in Capital	Accumulated Other Comprehensive Loss	Retirement benefits liability	Derivative instruments	Retained Earnings (Accumulated Deficit)	Retained Earnings (Accumulated Deficit) Cumulative Effect, Period of Adoption, Adjustment	Cumulative Preferred Stock	Noncontrolling Interests
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock outstanding (in shares)		283,374,000
Total Equity at Beginning of Period at Dec. 31, 2018	$ 4,792	$ 3	$ 5,088	$ (65)	$ (63)	$ (2)	$ (271)	$ 0	$ 0	$ 37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued (in shares)		710,000
Common stock issued			35						0
Common stock repurchased (in shares)		(181,000)
Common stock repurchased			(10)
Common stock reissued (in shares)		8,000
Common stock reissued			0
Common stock reacquired (in shares)		(47,000)
Common stock reacquired			0
Net gain (loss) arising during the period	(7)				(7)
Settlement arising during the period	0				0
Prior service credit adjustment	0				0
Amortization of net actuarial loss	3				3
Amortization of prior service credit	(2)				(2)
Unrealized gain (loss) on derivative instruments	(3)					(3)
Reclassification adjustments included in net income	1					1
Net Income	682						680			2
Dividends declared on common stock							(434)
Dividends declared on preferred stock							0
Preferred stock issued, net of issuance costs			35						0
Impact of purchase and consolidation of VIE										0
Sale of membership interest in VIE to tax equity investor										0
Contribution from noncontrolling interest										0
Distributions and other changes in noncontrolling interests										(2)
Total Equity at End of Period at Dec. 31, 2019	$ 5,055	$ 3	5,113	(73)	(69)	(4)	(25)	(51)	0	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 1.5300
Dividends declared per preferred stock Series C depositary share (in dollars per share)	$ 0
Common stock outstanding (in shares)		283,864,000
Common stock issued (in shares)		5,609,000
Common stock issued			265						0
Common stock repurchased (in shares)		(216,000)
Common stock repurchased			(13)
Common stock reissued (in shares)		12,000
Common stock reissued			1
Common stock reacquired (in shares)		(329,000)
Common stock reacquired			(1)
Net gain (loss) arising during the period	$ (15)				(15)
Settlement arising during the period	1				1
Prior service credit adjustment	(1)				(1)
Amortization of net actuarial loss	5				5
Amortization of prior service credit	(1)				(1)
Unrealized gain (loss) on derivative instruments	(4)					(4)
Reclassification adjustments included in net income	2					2
Net Income	752						755			(3)
Dividends declared on common stock							(465)
Dividends declared on preferred stock							0
Preferred stock issued, net of issuance costs			265						0
Impact of purchase and consolidation of VIE										101
Sale of membership interest in VIE to tax equity investor										417
Contribution from noncontrolling interest										31
Distributions and other changes in noncontrolling interests										(2)
Total Equity at End of Period at Dec. 31, 2020	$ 6,077	$ 3	5,365	(86)	(80)	(6)	214	$ 0	0	581
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 1.6300
Dividends declared per preferred stock Series C depositary share (in dollars per share)	$ 0
Common stock outstanding (in shares)	288,900,000	288,940,000
Common stock issued (in shares)		997,000
Common stock issued			50						224
Common stock repurchased (in shares)		(157,000)
Common stock repurchased			(9)
Common stock reissued (in shares)		0
Common stock reissued			0
Common stock reacquired (in shares)		(22,000)
Common stock reacquired			0
Net gain (loss) arising during the period	$ 19				19
Settlement arising during the period	1				1
Prior service credit adjustment	0				0
Amortization of net actuarial loss	5				5
Amortization of prior service credit	(1)				(1)
Unrealized gain (loss) on derivative instruments	2					2
Reclassification adjustments included in net income	1					1
Net Income	1,330						1,353			(23)
Dividends declared on common stock							(505)
Dividends declared on preferred stock							(5)
Preferred stock issued, net of issuance costs			50						224
Impact of purchase and consolidation of VIE										0
Sale of membership interest in VIE to tax equity investor										0
Contribution from noncontrolling interest										1
Distributions and other changes in noncontrolling interests										(2)
Total Equity at End of Period at Dec. 31, 2021	$ 7,188	$ 3	$ 5,406	$ (59)	$ (56)	$ (3)	$ 1,057		$ 224	$ 557
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 1.7400
Dividends declared per preferred stock Series C depositary share (in dollars per share)	$ 0.5688
Common stock outstanding (in shares)	289,800,000	289,758,000

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Consumers Energy Company Consolidated Statements of Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Revenue	$ 7,329	$ 6,418	$ 6,624
Operating Expenses
Operating Income	1,146	1,230	1,115
Other Income (Expense)
Interest income	3	4	7
Interest income – related parties	0	7	0
Allowance for equity funds used during construction	8	6	10
Non-operating retirement benefits, net	165	118	91
Other income	9	6	4
Other expense	(18)	(62)	(13)
Total other income	177	84	109
Interest Charges
Interest on long-term debt	481	483	439
Interest expense – related parties	12	12	9
Other interest expense	10	12	16
Allowance for borrowed funds used during construction	(3)	(2)	(4)
Total interest charges	500	505	460
Income Before Income Taxes	823	809	764
Income Tax Expense	95	115	131
Net Income Attributable to CMS Energy	1,353	755	680
Preferred Stock Dividends	5	0	0
Net Income Available to Common Stockholders	1,348	755	680
Consumers Energy Company
Operating Revenue	7,021	6,189	6,376
Operating Expenses
Fuel for electric generation	463	286	375
Purchased and interchange power	1,599	1,454	1,470
Purchased power – related parties	77	64	75
Cost of gas sold	726	568	754
Maintenance and other operating expenses	1,531	1,224	1,275
Depreciation and amortization	1,077	1,023	975
General taxes	373	349	322
Total operating expenses	5,846	4,968	5,246
Operating Income	1,175	1,221	1,130
Other Income (Expense)
Interest income	2	3	5
Interest income – related parties	5	5	5
Allowance for equity funds used during construction	8	6	10
Non-operating retirement benefits, net	155	112	85
Other income	8	5	3
Other expense	(18)	(43)	(13)
Total other income	160	88	95
Interest Charges
Interest on long-term debt	294	299	277
Interest expense – related parties	12	12	9
Other interest expense	8	11	15
Allowance for borrowed funds used during construction	(3)	(2)	(4)
Total interest charges	311	320	297
Income Before Income Taxes	1,024	989	928
Income Tax Expense	156	173	185
Net Income Attributable to CMS Energy	868	816	743
Preferred Stock Dividends	2	2	2
Net Income Available to Common Stockholders	$ 866	$ 814	$ 741

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Consumers Energy Company Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net Income	$ 1,330	$ 752	$ 682
Retirement Benefits Liability
Net loss arising during the period, net of tax	19	(15)	(7)
Amortization of net actuarial loss, net of tax	5	5	3
Other Comprehensive Income (Loss)	27	(13)	(8)
Comprehensive Income	1,357	739	674
Consumers Energy Company
Net Income	868	816	743
Retirement Benefits Liability
Net loss arising during the period, net of tax	2	(9)	(8)
Amortization of net actuarial loss, net of tax	2	1	1
Other Comprehensive Income (Loss)	4	(8)	(7)
Comprehensive Income	$ 872	$ 808	$ 736

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Consumers Energy Company Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net gain (loss) arising during the period, tax	$ 6	$ (4)	$ (3)
Amortization of net actuarial loss, tax	2	1	1
Consumers Energy Company
Net gain (loss) arising during the period, tax	1	(3)	(3)
Amortization of net actuarial loss, tax	$ 1	$ 1	$ 0

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Consumers Energy Company Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash Flows from Operating Activities
Net Income	$ 1,330	$ 752	$ 682
Adjustments to reconcile net income to net cash provided by operating activities
Deferred income taxes and investment tax credits	249	170	150
Bad debt expense	22	30	30
Postretirement benefits contributions	(12)	(712)	(10)
Other non‑cash operating activities and reconciling adjustments	(70)	(15)	(55)
Changes in assets and liabilities
Accounts receivable and accrued revenue	(103)	(5)	48
Inventories	(93)	28	44
Accounts payable and accrued rate refunds	153	56	(71)
Other current assets and liabilities	13	(68)	(93)
Other non‑current assets and liabilities	(16)	(36)	37
Net cash provided by operating activities	1,819	1,276	1,790
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(2,076)	(2,311)	(2,097)
Proceeds from sale of transmission equipment	0	58	97
Cost to retire property and other investing activities	(133)	(129)	(127)
Net cash used in investing activities	(1,233)	(2,867)	(2,816)
Cash Flows from Financing Activities
Proceeds from issuance of debt	335	3,179	2,151
Retirement of debt	(235)	(2,010)	(1,285)
Decrease in notes payable	0	(90)	(7)
Payment of dividends on common and preferred stock	(509)	(467)	(436)
Debt prepayment costs	0	(59)	(8)
Other financing costs	(53)	(51)	(50)
Net cash provided by (used in) financing activities	(295)	1,619	1,008
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts	291	28	(18)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	185	157	175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	476	185	157
Cash transactions
Interest paid (net of amounts capitalized)	489	549	498
Income taxes paid (refunds received), net	16	(58)	(58)
Non‑cash transactions
Capital expenditures not paid	196	141	170
Consumers Energy Company
Cash Flows from Operating Activities
Net Income	868	816	743
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	1,077	1,023	975
Deferred income taxes and investment tax credits	154	177	37
Bad debt expense	22	33	29
Postretirement benefits contributions	(9)	(690)	(7)
Other non‑cash operating activities and reconciling adjustments	(64)	(30)	(32)
Changes in assets and liabilities
Accounts receivable and accrued revenue	(103)	(46)	8
Inventories	(90)	26	40
Accounts payable and accrued rate refunds	140	45	(63)
Other current assets and liabilities	27	(78)	(136)
Other non‑current assets and liabilities	(40)	(58)	7
Net cash provided by operating activities	1,982	1,218	1,601
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(2,052)	(2,170)	(2,085)
DB SERP investment in note receivable – related party	0	(5)	0
Proceeds from sale of transmission equipment	0	58	77
Cost to retire property and other investing activities	(133)	(129)	(129)
Net cash used in investing activities	(2,185)	(2,246)	(2,137)
Cash Flows from Financing Activities
Proceeds from issuance of debt	335	1,954	993
Retirement of debt	(27)	(1,086)	(541)
Decrease in notes payable	0	(90)	(7)
Increase in notes payable – related parties	85	307	0
Stockholder contribution	575	650	675
Payment of dividends on common and preferred stock	(724)	(639)	(594)
Debt prepayment costs	0	(43)	(8)
Other financing costs	(32)	(18)	(10)
Net cash provided by (used in) financing activities	212	1,035	508
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts	9	7	(28)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	35	28	56
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	44	35	28
Cash transactions
Interest paid (net of amounts capitalized)	298	305	279
Income taxes paid (refunds received), net	(10)	51	132
Non‑cash transactions
Capital expenditures not paid	$ 192	$ 130	$ 160

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Consumers Energy Company Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Current Assets
Cash and cash equivalents	$ 452	$ 32
Restricted cash and cash equivalents	24	17
Accounts receivable and accrued revenue	931	853
Assets held for sale	19	429
Accounts receivable – related parties	12	19
Inventories at average cost
Gas in underground storage	462	353
Materials and supplies	168	155
Generating plant fuel stock	37	68
Deferred property taxes	356	332
Regulatory assets	46	42
Prepayments and other current assets	120	104
Total current assets	2,627	2,404
Other Non‑current Assets
Regulatory assets	2,259	2,653
Accounts receivable	30	19
Other	1,414	823
Total other non‑current assets	3,774	6,245
Total Assets	28,753	29,666
Current Liabilities
Current portion of long-term debt, finance leases, and other financing	382	591
Accounts payable	875	661
Accounts payable – related parties	11	7
Accrued rate refunds	12	20
Accrued interest	107	104
Accrued taxes	515	454
Regulatory liabilities	146	151
Other current liabilities	156	133
Total current liabilities	2,204	3,074
Non‑current Liabilities
Long-term debt	12,046	11,744
Non-current portion of finance leases and other financing	46	56
Regulatory liabilities	3,802	3,744
Postretirement benefits	142	152
Asset retirement obligations	628	553
Deferred investment tax credit	112	115
Deferred income taxes	2,210	1,863
Other non‑current liabilities	375	394
Total non‑current liabilities	19,361	20,515
Commitments and Contingencies
Common stockholders’ equity
Common stock	3	3
Other paid-in capital	5,406	5,365
Accumulated other comprehensive loss	(59)	(86)
Retained earnings	1,057	214
Total common stockholders’ equity	6,407	5,496
Cumulative preferred stock	224	0
Total stockholders’ equity	6,631	5,496
Total Liabilities and Equity	28,753	29,666
Consumers Energy Company
Current Assets
Cash and cash equivalents	22	20
Restricted cash and cash equivalents	22	15
Accounts receivable and accrued revenue	905	828
Assets held for sale	19	0
Accounts receivable – related parties	9	18
Inventories at average cost
Gas in underground storage	462	353
Materials and supplies	163	149
Generating plant fuel stock	33	67
Deferred property taxes	356	332
Regulatory assets	46	42
Prepayments and other current assets	84	68
Total current assets	2,121	1,892
Plant, Property, and Equipment
Plant, property, and equipment, gross	28,771	26,757
Less accumulated depreciation and amortization	8,371	7,844
Plant, property, and equipment, net	20,400	18,913
Construction work in progress	915	1,058
Total plant, property, and equipment	21,315	19,971
Other Non‑current Assets
Regulatory assets	2,259	2,653
Accounts receivable	36	25
Accounts and notes receivable – related parties	102	105
Other	1,307	753
Total other non‑current assets	3,704	3,536
Total Assets	27,140	25,399
Current Liabilities
Current portion of long-term debt, finance leases, and other financing	374	384
Notes payable – related parties	392	307
Accounts payable	835	636
Accounts payable – related parties	16	7
Accrued rate refunds	12	20
Accrued interest	75	72
Accrued taxes	529	458
Regulatory liabilities	146	151
Other current liabilities	109	104
Total current liabilities	2,488	2,139
Non‑current Liabilities
Long-term debt	8,050	7,742
Non-current portion of finance leases and other financing	46	56
Regulatory liabilities	3,802	3,744
Postretirement benefits	104	112
Asset retirement obligations	605	530
Deferred investment tax credit	112	115
Deferred income taxes	2,340	2,094
Other non‑current liabilities	314	311
Total non‑current liabilities	15,373	14,704
Commitments and Contingencies
Common stockholders’ equity
Common stock	841	841
Other paid-in capital	6,599	6,024
Accumulated other comprehensive loss	(32)	(36)
Retained earnings	1,834	1,690
Total common stockholders’ equity	9,242	8,519
Cumulative preferred stock	37	37
Total stockholders’ equity	9,279	8,556
Total Liabilities and Equity	$ 27,140	$ 25,399

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Consumers Energy Company Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Accounts receivable and accrued revenue, allowance	$ 20	$ 29
Common stock authorized (in shares)	350,000,000	350,000,000.0
Common stock outstanding (in shares)	289,800,000	288,900,000
Preferred stock authorized (in shares)	10,000,000
Consumers Energy Company
Accounts receivable and accrued revenue, allowance	$ 20	$ 29
Common stock authorized (in shares)	125,000,000.0	125,000,000.0
Common stock outstanding (in shares)	84,100,000	84,100,000
Preferred stock authorized (in shares)	7,500,000	7,500,000
Preferred stock outstanding (in shares)	400,000	400,000

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Consumers Energy Company Consolidated Statements of Changes in Equity - USD ($) $ in Millions	Total	Common Stock	Other Paid-in Capital	Accumulated Other Comprehensive Loss	Retirement benefits liability	Retained Earnings (Accumulated Deficit)	Cumulative Preferred Stock	Consumers Energy Company	Consumers Energy Company Common Stock	Consumers Energy Company Other Paid-in Capital	Consumers Energy Company Accumulated Other Comprehensive Loss	Consumers Energy Company Retirement benefits liability	Consumers Energy Company Retained Earnings (Accumulated Deficit)	Consumers Energy Company Cumulative Preferred Stock
Total Equity at Beginning of Period at Dec. 31, 2018	$ 4,792	$ 3	$ 5,088	$ (65)	$ (63)	$ (271)	$ 0	$ 6,920	$ 841	$ 4,699	$ (21)	$ (21)	$ 1,364	$ 37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholder contribution										675
Net gain (loss) arising during the period	(7)				(7)			(8)				(8)
Amortization of net actuarial loss	3				3			1				1
Net Income	682					680		743					743
Dividends declared on common stock						(434)							(592)
Dividends declared on preferred stock						0							(2)
Total Equity at End of Period at Dec. 31, 2019	5,055	3	5,113	(73)	(69)	(25)	0	7,737	841	5,374	(28)	(28)	1,513	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholder contribution										650
Net gain (loss) arising during the period	(15)				(15)			(9)				(9)
Amortization of net actuarial loss	5				5			1				1
Net Income	752					755		816					816
Dividends declared on common stock						(465)							(637)
Dividends declared on preferred stock						0							(2)
Total Equity at End of Period at Dec. 31, 2020	6,077	3	5,365	(86)	(80)	214	0	8,556	841	6,024	(36)	(36)	1,690	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stockholder contribution										575
Net gain (loss) arising during the period	19				19			2				2
Amortization of net actuarial loss	5				5			2				2
Net Income	1,330					1,353		868					868
Dividends declared on common stock						(505)							(722)
Dividends declared on preferred stock						(5)							(2)
Total Equity at End of Period at Dec. 31, 2021	$ 7,188	$ 3	$ 5,406	$ (59)	$ (56)	$ 1,057	$ 224	$ 9,279	$ 841	$ 6,599	$ (32)	$ (32)	$ 1,834	$ 37

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CMS Energy Corporation Consolidated Statements of Income (Parenthetical) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Tax effect of discontinued operations	$ 170	$ 18	$ 16

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Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies [Line Items]

Significant Accounting Policies

Significant Accounting Policies

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, CMS Enterprises, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

•they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas)

•they qualify for the normal purchases and sales exception

•they cannot be net settled due in part to the absence of an active market for the commodity

Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives.

Additionally, CMS Energy uses interest rate swaps to manage its interest rate risk on certain long-term debt transactions.

CMS Energy and Consumers record derivative contracts that do not qualify for the normal purchases and sales exception at fair value on their consolidated balance sheets. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

EPS: CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted EPS, includes the effects of nonvested stock awards and forward equity sales. CMS Energy computes the effect on potential common stock using the treasury stock method. Diluted EPS excludes the impact of antidilutive securities, which are those securities resulting in an increase in EPS or a decrease in loss per share. For EPS computations, see Note 13, Earnings Per Share—CMS Energy.

Impairment of Long-Lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

CMS Energy also assesses equity method investments for impairment whenever there has been a decline in value that is other than temporary. This assessment requires CMS Energy to determine the fair value of the equity method investment. CMS Energy determines fair value using valuation methodologies, including discounted cash flows, and assesses the ability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment. CMS Energy records an impairment if the fair value is less than the carrying amount and the decline in value is considered to be other than temporary.

Investment Tax Credits: Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment. CMS Energy’s non‑regulated businesses use the deferral method of accounting for investment tax credits. Under the deferral method, the book basis of the associated assets is reduced by the amount of the credit, resulting in lower depreciation expense over the life of the assets. Furthermore, the tax basis of the assets is reduced by 50 percent of the related credit, resulting in a net deferred tax asset. CMS Energy recognizes the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.

Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and emission allowances are used to satisfy compliance obligations related to the generation of power. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions: MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

Property Taxes: Property taxes are based on the taxable value of Consumers’ real and personal property assessed by local taxing authorities. Consumers records property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Reclassifications: CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the present period. The most significant of these reclassifications is related to CMS Energy’s sale of EnerBank to Regions Bank in October 2021. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. Additionally, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Renewable Energy Grant: In 2013, Consumers received a renewable energy cash grant for Lake Winds® Energy Park under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Upon receipt of the grant, Consumers recorded a regulatory liability, which Consumers is amortizing over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income. Consumers recorded the deferred income taxes related to the grant as a reduction of the book basis of Lake Winds® Energy Park.

Other: For additional accounting policies, see:

•Note 7, Plant, Property, and Equipment

•Note 8, Leases and Palisades Financing

•Note 9, Asset Retirement Obligations

•Note 10, Retirement Benefits

•Note 12, Income Taxes

•Note 13, Earnings Per Share—CMS Energy

•Note 14, Revenue

•Note 16, Cash and Cash Equivalents

•Note 19, Variable Interest Entities

Consumers Energy Company

Significant Accounting Policies [Line Items]

Significant Accounting Policies

Significant Accounting Policies

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, CMS Enterprises, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

•they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas)

•they qualify for the normal purchases and sales exception

•they cannot be net settled due in part to the absence of an active market for the commodity

Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives.

Additionally, CMS Energy uses interest rate swaps to manage its interest rate risk on certain long-term debt transactions.

CMS Energy and Consumers record derivative contracts that do not qualify for the normal purchases and sales exception at fair value on their consolidated balance sheets. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

EPS: CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted EPS, includes the effects of nonvested stock awards and forward equity sales. CMS Energy computes the effect on potential common stock using the treasury stock method. Diluted EPS excludes the impact of antidilutive securities, which are those securities resulting in an increase in EPS or a decrease in loss per share. For EPS computations, see Note 13, Earnings Per Share—CMS Energy.

Impairment of Long-Lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

CMS Energy also assesses equity method investments for impairment whenever there has been a decline in value that is other than temporary. This assessment requires CMS Energy to determine the fair value of the equity method investment. CMS Energy determines fair value using valuation methodologies, including discounted cash flows, and assesses the ability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment. CMS Energy records an impairment if the fair value is less than the carrying amount and the decline in value is considered to be other than temporary.

Investment Tax Credits: Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment. CMS Energy’s non‑regulated businesses use the deferral method of accounting for investment tax credits. Under the deferral method, the book basis of the associated assets is reduced by the amount of the credit, resulting in lower depreciation expense over the life of the assets. Furthermore, the tax basis of the assets is reduced by 50 percent of the related credit, resulting in a net deferred tax asset. CMS Energy recognizes the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.

Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and emission allowances are used to satisfy compliance obligations related to the generation of power. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions: MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

Property Taxes: Property taxes are based on the taxable value of Consumers’ real and personal property assessed by local taxing authorities. Consumers records property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Reclassifications: CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the present period. The most significant of these reclassifications is related to CMS Energy’s sale of EnerBank to Regions Bank in October 2021. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. Additionally, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Renewable Energy Grant: In 2013, Consumers received a renewable energy cash grant for Lake Winds® Energy Park under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Upon receipt of the grant, Consumers recorded a regulatory liability, which Consumers is amortizing over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income. Consumers recorded the deferred income taxes related to the grant as a reduction of the book basis of Lake Winds® Energy Park.

Other: For additional accounting policies, see:

•Note 7, Plant, Property, and Equipment

•Note 8, Leases and Palisades Financing

•Note 9, Asset Retirement Obligations

•Note 10, Retirement Benefits

•Note 12, Income Taxes

•Note 13, Earnings Per Share—CMS Energy

•Note 14, Revenue

•Note 16, Cash and Cash Equivalents

•Note 19, Variable Interest Entities

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Regulatory Matters

12 Months Ended

Dec. 31, 2021

Public Utilities, General Disclosures [Line Items]

Regulatory Matters

Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost recovery from customers, the MPSC’s authority to approve voluntary revenue refunds, and other matters. Consumers is unable to predict the outcome of these appeals.

Regulatory Assets and Liabilities

Consumers is subject to the actions of the MPSC and FERC and therefore prepares its consolidated financial statements in accordance with the provisions of regulatory accounting. A utility must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, Consumers records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by non‑regulated businesses.

Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31	End of Recovery or Refund Period		2021			2020
Regulatory assets
Current
Energy waste reduction plan incentive1		2022		$	42		$	34
Deferred capital spending2		2021		—			6
Other		2022		4			2
Total current regulatory assets				$	46		$	42
Non-current
Postretirement benefits3		various		$	837		$	1,231
Costs of coal-fueled electric generating units to be retired2		various		678			678
ARO4		various		247			216
Securitized costs2		2029		193			221
MGP sites4		various		112			120
Unamortized loss on reacquired debt4		various		104			108
Energy waste reduction plan incentive1		2023		46			42
Energy waste reduction plan4		various		13			16
Demand response program4		various		10			10
Other		various		19			11
Total non-current regulatory assets				$	2,259		$	2,653
Total regulatory assets				$	2,305		$	2,695
Regulatory liabilities
Current
Income taxes, net		2022		$	138		$	105
Reserve for customer refunds		2022		2			28
Voluntary transmission asset sale gain share		2021		—			14
Other		2022		6			4
Total current regulatory liabilities				$	146		$	151
Non-current
Cost of removal		various		$	2,375		$	2,245
Income taxes, net		various		1,297			1,419
Postretirement benefits		various		54			—
Renewable energy grant		2043		47			49
Renewable energy plan		2028		13			9
ARO		various		—			11
Other		various		16			11
Total non-current regulatory liabilities				$	3,802		$	3,744
Total regulatory liabilities				$	3,948		$	3,895

1These regulatory assets have arisen from an alternative revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2The MPSC has provided, or Consumers expects, a specific return on these regulatory assets.

3This regulatory asset is included in rate base, thereby providing a return.

4These regulatory assets represent incurred costs for which the MPSC has provided, or Consumers expects, recovery without a return on investment.

Regulatory Assets

Energy Waste Reduction Plan Incentive: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

In October 2021, the MPSC approved a settlement agreement authorizing Consumers to collect $42 million during 2022 as an incentive for exceeding its statutory savings targets in 2020. Consumers recognized incentive revenue under this program of $42 million in 2020.

Consumers also exceeded its statutory savings targets in 2021, achieved certain other goals, and will request the MPSC’s approval to collect $46 million, the maximum performance incentive, in the energy waste reduction reconciliation to be filed in May 2022. Consumers recognized incentive revenue under this program of $46 million in 2021.

Deferred Capital Spending: In 2019, the MPSC approved a settlement agreement in Consumers’ 2018 electric rate case, which provided deferred accounting treatment for distribution-related capital investments exceeding certain threshold amounts. Thus, for actual capital spending above the threshold amounts detailed in the settlement agreement, Consumers had deferred as a regulatory asset the associated depreciation and property tax expense as well as the debt component of the overall rate of return on such spending.

Postretirement Benefits: As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits. Accordingly, Consumers defers the net impact of actuarial losses and gains, prior service costs and credits, and settlements associated with postretirement benefits as a regulatory asset or liability. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. For details about settlements and the amortization periods, see Note 10, Retirement Benefits.

Costs of Coal-fueled Electric Generating Units to be Retired: In 2019, the MPSC approved the settlement agreement reached in Consumers’ 2018 IRP, under which Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. Under Michigan law, electric utilities have been permitted to use highly rated, low-cost securitization bonds to finance the recovery of qualified costs. In 2019, Consumers removed from total plant, property, and equipment an amount representing the projected remaining book value of the two coal-fueled electric generating units upon their retirement, and recorded it as a regulatory asset. Until securitization, the book value of the generating units will remain in rate base and receive full regulatory returns in general rate cases.

In December 2020, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of the two coal-fueled electric generating units upon their retirement. An intervenor appealed the order, contending that it should not have to pay the securitization surcharge. In November 2021, the Michigan Court of Appeals affirmed the MPSC’s determination that the intervenor must pay the securitization charge.

ARO: The recovery of the underlying asset investments and related removal and monitoring costs of recorded AROs is approved by the MPSC in depreciation rate cases. Consumers records a regulatory asset and a regulatory liability for timing differences between the recognition of AROs for financial reporting purposes and the recovery of these costs from customers. The recovery period approximates the useful life of the assets to be removed.

Securitized Costs: In 2013, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of seven smaller coal-fueled electric generating units that Consumers retired in 2016 and three smaller natural gas-fueled electric generating units that Consumers retired in 2015. Upon receipt of the MPSC’s order, Consumers removed the book value of the ten units from plant, property, and equipment and recorded this amount as a regulatory asset. Consumers is amortizing the regulatory asset over the life of the related securitization bonds, which it issued through a subsidiary in 2014. For additional details regarding the securitization bonds, see Note 4, Financings and Capitalization.

MGP Sites: Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities. The MPSC allows Consumers to recover from its natural gas customers over a ten-year period the costs incurred to remediate the MGP sites.

Unamortized Loss on Reacquired Debt: Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is capitalized and amortized over the life of the new debt.

Energy Waste Reduction Plan: The MPSC allows Consumers to collect surcharges from customers to fund its energy waste reduction plan. The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period. The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Demand Response Program: In Consumers’ 2018 IRP and general rate cases, the MPSC has approved the recovery of demand response costs. Consumers annually files a reconciliation with the MPSC to review actual demand response costs against amounts approved.

Regulatory Liabilities

Income Taxes, Net: Consumers records regulatory assets and liabilities to reflect the difference between deferred income taxes recognized for financial reporting purposes and amounts previously reflected in Consumers’ rates. This net balance will decrease over the remaining life of the related temporary differences and flow through income tax expense. The majority of the net regulatory liability recorded related to income taxes is associated with plant assets that are subject to normalization, which is governed by the Internal Revenue Code, and will be returned to customers over the remaining book life of the related plant assets, the average of which is 44 years for gas plant assets and 27 years for electric plant assets. For additional details on deferred income taxes, see Note 12, Income Taxes.

Reserve for Customer Refunds: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. In May 2021, the MPSC approved a filing submitted by Consumers that proposed the refund take the form of incremental spending in 2021 and 2022 above amounts included in rates on various programs, including electric service restoration and gas and electric technology expenses. If Consumers does not achieve the incremental spending, the remaining balance will be provided to electric or gas utility customers through a bill credit.

Voluntary Transmission Asset Sale Gain Share: In October 2020, Consumers completed a sale of the electric utility’s remaining transmission equipment to METC. In December 2020, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with electric utility customers through incremental service restoration spending in 2021; this application was approved by the MPSC in February 2021. As a result, the $14 million gain was recorded on Consumers’ consolidated balance sheets as a current regulatory liability at December 31, 2020 and was shared with customers in 2021.

Cost of Removal: The MPSC allows Consumers to collect amounts from customers to fund future asset removal activities. This regulatory liability is reduced as costs of removal are incurred. The refund period of this regulatory liability approximates the useful life of the assets to be removed.

Renewable Energy Grant: In 2013, Consumers received a $69 million renewable energy grant for Lake Winds® Energy Park, which began operations in 2012. This grant reduces Consumers’ cost of complying with Michigan’s renewable portfolio standard and, accordingly, reduces the overall renewable energy surcharge to be collected from customers. The regulatory liability recorded for the grant will be amortized over the life of Lake Winds® Energy Park.

Renewable Energy Plan: Consumers has collected surcharges to fund its renewable energy plan. Amounts not yet spent under the plan are recorded as a regulatory liability, which is amortized as incremental costs are incurred to operate and depreciate Consumers’ renewable generation facilities and to purchase RECs under renewable energy purchase agreements. Incremental costs represent costs incurred in excess of amounts recovered through the PSCR process.

Consumers Electric Utility

2021 Electric Rate Case: In March 2021, Consumers filed an application with the MPSC seeking an annual rate increase of $225 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending December 31, 2022. In July 2021, Consumers reduced its requested annual rate increase to $201 million. In December 2021, the MPSC approved an annual rate increase of $27 million, based on a 9.9 percent authorized return on equity. This increase reflects the net impact of the approved settlement agreement in Consumers’ electric depreciation rate case, which reduced annual depreciation expense by $27 million.

In its final order, the MPSC disallowed cost recovery for fleet assets and certain other categories of recently completed capital expenditures incurred by Consumers. As a result of this disallowance, Consumers recorded an impairment charge of $41 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. This charge includes an assessment of probable loss of $11 million on similar categories of gas utility capital expenditures that are pending recovery in Consumers’ 2021 gas rate case. Though Consumers plans to pursue full recovery of certain of these electric and gas capital expenditures, the position taken by the MPSC in this electric rate case provides significant uncertainty around whether Consumers will ultimately succeed.

In January 2022, Consumers filed a petition for rehearing requesting the MPSC reconsider its disallowance of $11 million in capital expenditures for which the MPSC had already approved recovery in a previous electric rate order; this amount was not included in the impairment charge based on Consumers’ assessment of the merits of the petition for rehearing. The order disallowed recovery of other categories of capital expenditures, requiring that Consumers provide additional cost/benefit analysis and other information in its next electric rate case to support cost recovery. Consumers has incurred approximately $23 million related to these programs as of December 31, 2021 and, for certain ongoing projects, expects to incur additional capital expenditures in 2022 and beyond. While Consumers intends to

support fully the prudency of such capital expenditures, it is reasonably possible that the MPSC will disallow some or all of these capital expenditures. An additional material disallowance of incurred capital costs could negatively affect CMS Energy’s and Consumers’ future results of operations. Consumers cannot predict the outcome of these proceedings.

Finally, the order disallowed various other categories of capital expenditures in the projected test year, primarily challenging the accuracy of Consumers’ projection of these expenditures through 2022. While these are presently excluded from rate base, Consumers believes it will be successful in recovering the actual capital expenditures incurred for these programs in future rate cases.

As a result of the order, in December 2021, Consumers committed to a plan to sell fleet assets with a fair value of $15 million. To reflect these held-for-sale assets at their fair value, less expected selling costs, Consumers recorded an additional impairment charge of $4 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021.

Power Supply Cost Recovery and Gas Cost Recovery

The PSCR and GCR ratemaking processes are designed to allow Consumers to recover all of its power supply and purchased natural gas costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its PSCR and GCR billing charges monthly in order to minimize the underrecovery or overrecovery amount in the annual reconciliations. Underrecoveries represent probable future revenues that will be recovered from customers; overrecoveries represent previously collected revenues that will be refunded to customers.

Presented in the following table are the assets and liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
Assets
GCR underrecoveries		$	25		$	—
Accounts receivable and accrued revenue		$	25		$	—
Liabilities
PSCR overrecoveries		$	12		$	5
GCR overrecoveries		—			15
Accrued rate refunds		$	12		$	20

PSCR Plans and Reconciliations: In October 2021, the MPSC issued an order in Consumers’ 2019 PSCR reconciliation, authorizing recovery of $1.9 billion of power costs and authorizing Consumers to reflect in its 2020 PSCR reconciliation the overrecovery of $18 million.

In April 2021, the MPSC issued an order in Consumers’ 2020 PSCR plan authorizing the 2020 PSCR charge that Consumers self-implemented beginning in January 2020. In March 2021, Consumers filed its 2020 PSCR reconciliation, requesting full recovery of $1.8 billion of power costs and authorization to reflect in its 2021 PSCR reconciliation the underrecovery of $4 million.

In January 2022, the MPSC issued an order in Consumers’ amended 2021 PSCR plan authorizing the 2021 PSCR charge that Consumers self-implemented beginning in January 2021.

GCR Plans and Reconciliations: In May 2021, the MPSC approved a settlement agreement in Consumers’ 2019-2020 GCR reconciliation, authorizing recovery of $0.5 billion of gas costs and authorizing Consumers to reflect in its 2020-2021 GCR reconciliation the overrecovery of $6 million.

In June 2021, Consumers filed its 2020-2021 GCR reconciliation, requesting full recovery of $0.4 billion of gas costs and authorization to reflect in its 2021-2022 GCR reconciliation the overrecovery of $1 million.

Consumers submitted its 2021-2022 GCR plan to the MPSC in December 2020 and self-implemented its proposed 2021-2022 GCR charge in April 2021. The MPSC approved a settlement agreement in this proceeding in September 2021, authorizing the GCR charge that Consumers had self-implemented.

Consumers Energy Company

Public Utilities, General Disclosures [Line Items]

Regulatory Matters

Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost recovery from customers, the MPSC’s authority to approve voluntary revenue refunds, and other matters. Consumers is unable to predict the outcome of these appeals.

Regulatory Assets and Liabilities

Consumers is subject to the actions of the MPSC and FERC and therefore prepares its consolidated financial statements in accordance with the provisions of regulatory accounting. A utility must apply regulatory accounting when its rates are designed to recover specific costs of providing regulated services. Under regulatory accounting, Consumers records regulatory assets or liabilities for certain transactions that would have been treated as expense or revenue by non‑regulated businesses.

Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31	End of Recovery or Refund Period		2021			2020
Regulatory assets
Current
Energy waste reduction plan incentive1		2022		$	42		$	34
Deferred capital spending2		2021		—			6
Other		2022		4			2
Total current regulatory assets				$	46		$	42
Non-current
Postretirement benefits3		various		$	837		$	1,231
Costs of coal-fueled electric generating units to be retired2		various		678			678
ARO4		various		247			216
Securitized costs2		2029		193			221
MGP sites4		various		112			120
Unamortized loss on reacquired debt4		various		104			108
Energy waste reduction plan incentive1		2023		46			42
Energy waste reduction plan4		various		13			16
Demand response program4		various		10			10
Other		various		19			11
Total non-current regulatory assets				$	2,259		$	2,653
Total regulatory assets				$	2,305		$	2,695
Regulatory liabilities
Current
Income taxes, net		2022		$	138		$	105
Reserve for customer refunds		2022		2			28
Voluntary transmission asset sale gain share		2021		—			14
Other		2022		6			4
Total current regulatory liabilities				$	146		$	151
Non-current
Cost of removal		various		$	2,375		$	2,245
Income taxes, net		various		1,297			1,419
Postretirement benefits		various		54			—
Renewable energy grant		2043		47			49
Renewable energy plan		2028		13			9
ARO		various		—			11
Other		various		16			11
Total non-current regulatory liabilities				$	3,802		$	3,744
Total regulatory liabilities				$	3,948		$	3,895

1These regulatory assets have arisen from an alternative revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2The MPSC has provided, or Consumers expects, a specific return on these regulatory assets.

3This regulatory asset is included in rate base, thereby providing a return.

4These regulatory assets represent incurred costs for which the MPSC has provided, or Consumers expects, recovery without a return on investment.

Regulatory Assets

Energy Waste Reduction Plan Incentive: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

In October 2021, the MPSC approved a settlement agreement authorizing Consumers to collect $42 million during 2022 as an incentive for exceeding its statutory savings targets in 2020. Consumers recognized incentive revenue under this program of $42 million in 2020.

Consumers also exceeded its statutory savings targets in 2021, achieved certain other goals, and will request the MPSC’s approval to collect $46 million, the maximum performance incentive, in the energy waste reduction reconciliation to be filed in May 2022. Consumers recognized incentive revenue under this program of $46 million in 2021.

Deferred Capital Spending: In 2019, the MPSC approved a settlement agreement in Consumers’ 2018 electric rate case, which provided deferred accounting treatment for distribution-related capital investments exceeding certain threshold amounts. Thus, for actual capital spending above the threshold amounts detailed in the settlement agreement, Consumers had deferred as a regulatory asset the associated depreciation and property tax expense as well as the debt component of the overall rate of return on such spending.

Postretirement Benefits: As part of the ratemaking process, the MPSC allows Consumers to recover the costs of postretirement benefits. Accordingly, Consumers defers the net impact of actuarial losses and gains, prior service costs and credits, and settlements associated with postretirement benefits as a regulatory asset or liability. The asset or liability will decrease as the deferred items are amortized and recognized as components of net periodic benefit cost. For details about settlements and the amortization periods, see Note 10, Retirement Benefits.

Costs of Coal-fueled Electric Generating Units to be Retired: In 2019, the MPSC approved the settlement agreement reached in Consumers’ 2018 IRP, under which Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. Under Michigan law, electric utilities have been permitted to use highly rated, low-cost securitization bonds to finance the recovery of qualified costs. In 2019, Consumers removed from total plant, property, and equipment an amount representing the projected remaining book value of the two coal-fueled electric generating units upon their retirement, and recorded it as a regulatory asset. Until securitization, the book value of the generating units will remain in rate base and receive full regulatory returns in general rate cases.

In December 2020, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of the two coal-fueled electric generating units upon their retirement. An intervenor appealed the order, contending that it should not have to pay the securitization surcharge. In November 2021, the Michigan Court of Appeals affirmed the MPSC’s determination that the intervenor must pay the securitization charge.

ARO: The recovery of the underlying asset investments and related removal and monitoring costs of recorded AROs is approved by the MPSC in depreciation rate cases. Consumers records a regulatory asset and a regulatory liability for timing differences between the recognition of AROs for financial reporting purposes and the recovery of these costs from customers. The recovery period approximates the useful life of the assets to be removed.

Securitized Costs: In 2013, the MPSC issued a securitization financing order authorizing Consumers to issue securitization bonds in order to finance the recovery of the remaining book value of seven smaller coal-fueled electric generating units that Consumers retired in 2016 and three smaller natural gas-fueled electric generating units that Consumers retired in 2015. Upon receipt of the MPSC’s order, Consumers removed the book value of the ten units from plant, property, and equipment and recorded this amount as a regulatory asset. Consumers is amortizing the regulatory asset over the life of the related securitization bonds, which it issued through a subsidiary in 2014. For additional details regarding the securitization bonds, see Note 4, Financings and Capitalization.

MGP Sites: Consumers is incurring environmental remediation and other response activity costs at 23 former MGP facilities. The MPSC allows Consumers to recover from its natural gas customers over a ten-year period the costs incurred to remediate the MGP sites.

Unamortized Loss on Reacquired Debt: Under regulatory accounting, any unamortized discount, premium, or expense related to debt redeemed with the proceeds of new debt is capitalized and amortized over the life of the new debt.

Energy Waste Reduction Plan: The MPSC allows Consumers to collect surcharges from customers to fund its energy waste reduction plan. The amount of spending incurred in excess of surcharges collected is recorded as a regulatory asset and amortized as surcharges are collected from customers over the plan period. The amount of surcharges collected in excess of spending incurred is recorded as a regulatory liability and amortized as costs are incurred.

Demand Response Program: In Consumers’ 2018 IRP and general rate cases, the MPSC has approved the recovery of demand response costs. Consumers annually files a reconciliation with the MPSC to review actual demand response costs against amounts approved.

Regulatory Liabilities

Income Taxes, Net: Consumers records regulatory assets and liabilities to reflect the difference between deferred income taxes recognized for financial reporting purposes and amounts previously reflected in Consumers’ rates. This net balance will decrease over the remaining life of the related temporary differences and flow through income tax expense. The majority of the net regulatory liability recorded related to income taxes is associated with plant assets that are subject to normalization, which is governed by the Internal Revenue Code, and will be returned to customers over the remaining book life of the related plant assets, the average of which is 44 years for gas plant assets and 27 years for electric plant assets. For additional details on deferred income taxes, see Note 12, Income Taxes.

Reserve for Customer Refunds: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. In May 2021, the MPSC approved a filing submitted by Consumers that proposed the refund take the form of incremental spending in 2021 and 2022 above amounts included in rates on various programs, including electric service restoration and gas and electric technology expenses. If Consumers does not achieve the incremental spending, the remaining balance will be provided to electric or gas utility customers through a bill credit.

Voluntary Transmission Asset Sale Gain Share: In October 2020, Consumers completed a sale of the electric utility’s remaining transmission equipment to METC. In December 2020, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with electric utility customers through incremental service restoration spending in 2021; this application was approved by the MPSC in February 2021. As a result, the $14 million gain was recorded on Consumers’ consolidated balance sheets as a current regulatory liability at December 31, 2020 and was shared with customers in 2021.

Cost of Removal: The MPSC allows Consumers to collect amounts from customers to fund future asset removal activities. This regulatory liability is reduced as costs of removal are incurred. The refund period of this regulatory liability approximates the useful life of the assets to be removed.

Renewable Energy Grant: In 2013, Consumers received a $69 million renewable energy grant for Lake Winds® Energy Park, which began operations in 2012. This grant reduces Consumers’ cost of complying with Michigan’s renewable portfolio standard and, accordingly, reduces the overall renewable energy surcharge to be collected from customers. The regulatory liability recorded for the grant will be amortized over the life of Lake Winds® Energy Park.

Renewable Energy Plan: Consumers has collected surcharges to fund its renewable energy plan. Amounts not yet spent under the plan are recorded as a regulatory liability, which is amortized as incremental costs are incurred to operate and depreciate Consumers’ renewable generation facilities and to purchase RECs under renewable energy purchase agreements. Incremental costs represent costs incurred in excess of amounts recovered through the PSCR process.

Consumers Electric Utility

2021 Electric Rate Case: In March 2021, Consumers filed an application with the MPSC seeking an annual rate increase of $225 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending December 31, 2022. In July 2021, Consumers reduced its requested annual rate increase to $201 million. In December 2021, the MPSC approved an annual rate increase of $27 million, based on a 9.9 percent authorized return on equity. This increase reflects the net impact of the approved settlement agreement in Consumers’ electric depreciation rate case, which reduced annual depreciation expense by $27 million.

In its final order, the MPSC disallowed cost recovery for fleet assets and certain other categories of recently completed capital expenditures incurred by Consumers. As a result of this disallowance, Consumers recorded an impairment charge of $41 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. This charge includes an assessment of probable loss of $11 million on similar categories of gas utility capital expenditures that are pending recovery in Consumers’ 2021 gas rate case. Though Consumers plans to pursue full recovery of certain of these electric and gas capital expenditures, the position taken by the MPSC in this electric rate case provides significant uncertainty around whether Consumers will ultimately succeed.

In January 2022, Consumers filed a petition for rehearing requesting the MPSC reconsider its disallowance of $11 million in capital expenditures for which the MPSC had already approved recovery in a previous electric rate order; this amount was not included in the impairment charge based on Consumers’ assessment of the merits of the petition for rehearing. The order disallowed recovery of other categories of capital expenditures, requiring that Consumers provide additional cost/benefit analysis and other information in its next electric rate case to support cost recovery. Consumers has incurred approximately $23 million related to these programs as of December 31, 2021 and, for certain ongoing projects, expects to incur additional capital expenditures in 2022 and beyond. While Consumers intends to

support fully the prudency of such capital expenditures, it is reasonably possible that the MPSC will disallow some or all of these capital expenditures. An additional material disallowance of incurred capital costs could negatively affect CMS Energy’s and Consumers’ future results of operations. Consumers cannot predict the outcome of these proceedings.

Finally, the order disallowed various other categories of capital expenditures in the projected test year, primarily challenging the accuracy of Consumers’ projection of these expenditures through 2022. While these are presently excluded from rate base, Consumers believes it will be successful in recovering the actual capital expenditures incurred for these programs in future rate cases.

As a result of the order, in December 2021, Consumers committed to a plan to sell fleet assets with a fair value of $15 million. To reflect these held-for-sale assets at their fair value, less expected selling costs, Consumers recorded an additional impairment charge of $4 million within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021.

Power Supply Cost Recovery and Gas Cost Recovery

The PSCR and GCR ratemaking processes are designed to allow Consumers to recover all of its power supply and purchased natural gas costs if incurred under reasonable and prudent policies and practices. The MPSC reviews these costs, policies, and practices in annual plan and reconciliation proceedings. Consumers adjusts its PSCR and GCR billing charges monthly in order to minimize the underrecovery or overrecovery amount in the annual reconciliations. Underrecoveries represent probable future revenues that will be recovered from customers; overrecoveries represent previously collected revenues that will be refunded to customers.

Presented in the following table are the assets and liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
Assets
GCR underrecoveries		$	25		$	—
Accounts receivable and accrued revenue		$	25		$	—
Liabilities
PSCR overrecoveries		$	12		$	5
GCR overrecoveries		—			15
Accrued rate refunds		$	12		$	20

PSCR Plans and Reconciliations: In October 2021, the MPSC issued an order in Consumers’ 2019 PSCR reconciliation, authorizing recovery of $1.9 billion of power costs and authorizing Consumers to reflect in its 2020 PSCR reconciliation the overrecovery of $18 million.

In April 2021, the MPSC issued an order in Consumers’ 2020 PSCR plan authorizing the 2020 PSCR charge that Consumers self-implemented beginning in January 2020. In March 2021, Consumers filed its 2020 PSCR reconciliation, requesting full recovery of $1.8 billion of power costs and authorization to reflect in its 2021 PSCR reconciliation the underrecovery of $4 million.

In January 2022, the MPSC issued an order in Consumers’ amended 2021 PSCR plan authorizing the 2021 PSCR charge that Consumers self-implemented beginning in January 2021.

GCR Plans and Reconciliations: In May 2021, the MPSC approved a settlement agreement in Consumers’ 2019-2020 GCR reconciliation, authorizing recovery of $0.5 billion of gas costs and authorizing Consumers to reflect in its 2020-2021 GCR reconciliation the overrecovery of $6 million.

In June 2021, Consumers filed its 2020-2021 GCR reconciliation, requesting full recovery of $0.4 billion of gas costs and authorization to reflect in its 2021-2022 GCR reconciliation the overrecovery of $1 million.

Consumers submitted its 2021-2022 GCR plan to the MPSC in December 2020 and self-implemented its proposed 2021-2022 GCR charge in April 2021. The MPSC approved a settlement agreement in this proceeding in September 2021, authorizing the GCR charge that Consumers had self-implemented.

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Contingencies and Commitments

12 Months Ended

Dec. 31, 2021

Other Commitments [Line Items]

Contingencies and Commitments

Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities. Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made. Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Bay Harbor: CMS Land retained environmental remediation obligations for the collection and treatment of leachate at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and EGLE finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit, which was renewed in January 2022 and is valid through 2025.

At December 31, 2021, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $57 million. CMS Energy expects to pay the following amounts for long-term leachate disposal and operating and maintenance costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy
Long-term leachate disposal and operating and maintenance costs		$	4		$	4		$	4		$	4		$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim: In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea. The government of Equatorial Guinea claims that, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating with CMS Energy. CMS Energy has concluded that the government’s tax claim is without merit and believes the likelihood of material loss to be remote, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $2 million and $4 million. At December 31, 2021, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA. CERCLA liability is joint and several. In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site. The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. In 2011, Consumers received a follow-up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River. All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million. Various factors, including the number and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At December 31, 2021, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability, as no amount in the range was considered a better estimate than any other amount.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB: In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed part of the PCB material and replaced it with non‑PCB material. Consumers has had several communications with the EPA regarding this matter, but cannot predict the financial impact or outcome.

MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. In 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with a claim against Consumers that was related to the Clean Air Act. In November 2020, the MCV Partnership and Consumers signed a settlement agreement resolving all remaining disputes between the parties, and filed the settlement and associated agreements with the MPSC for approval. In March 2021, the MPSC approved the settlement and associated agreements.

Consumers Gas Utility Contingencies

Gas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At December 31, 2021, Consumers had a recorded liability of $57 million for its remaining obligations for these sites. This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent. The undiscounted amount of the remaining obligation is $61 million. Consumers expects to pay the following amounts for remediation and other response activity costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
Consumers
Remediation and other response activity costs		$	3		$	9		$	24		$	11		$	1

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period. At December 31, 2021, Consumers had a regulatory asset of $112 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million. At December 31, 2021, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of

the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages.

In September 2020, the MPSC disallowed the recovery of $7 million in incremental gas purchases related to the fire. In January 2021, the MPSC denied Consumers’ petition for a rehearing challenging this disallowance. In February 2021, Consumers filed an appeal of the MPSC’s denial with the Michigan Court of Appeals. Consumers could also be subject to disallowances of costs associated with the repair and modification of the Ray Compressor Station. At December 31, 2021, Consumers had incurred capital expenditures of $17 million to restore and modify the compressor station.

As of December 31, 2021, Consumers had recorded an insurance recovery of $13 million related to the compressor station. During 2021, Consumers recognized $6 million of the insurance recovery as a reduction to plant, property, and equipment, $3 million as a reduction of maintenance and other operating expenses, and $4 million as operating revenue, which represented recovery of incremental gas purchases related to the fire.

At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on CMS Energy’s and Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2021:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from purchase of VIE1	September 2020	indefinite		$	314		$	—
Indemnity obligations from stock and asset sale agreements2	various	indefinite		225			4
Guarantee3	July 2011	indefinite		30			—
Consumers
Guarantee3	July 2011	indefinite		$	30		$	—

1In conjunction with the purchase of its interest in Aviator Wind Equity Holdings, CMS Enterprises assumed certain indemnity obligations that protect the associated tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest in Aviator Wind. CMS Enterprises would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on CMS Enterprises’ ownership interest in Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes and breaches of representations and warranties. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note and an indemnity provided in connection with the sale of EnerBank to Regions Bank. For further details on the sale, see Note 20, Exit Activities and Discontinued Operations. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

3This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. At December 31, 2021, the carrying value of these indemnity obligations was $1 million. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

In addition to the matters disclosed in this Note, Note 2, Regulatory Matters, and Note 20, Exit Activities and Discontinued Operations, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Contractual Commitments

Purchase Obligations: Purchase obligations arise from long-term contracts for the purchase of commodities and related services, plant purchase commitments, and construction and service agreements. The commodities and related services include long-term PPAs, natural gas and associated transportation, and coal and associated transportation. Related-party PPAs are between Consumers and certain affiliates

of CMS Enterprises. Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2021 for each of the periods shown:

In Millions
	Payments Due
	Total			2022			2023			2024			2025			2026			Beyond 2026
CMS Energy, including Consumers
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		4,445			1,489			1,657			412			639			36			212
Total purchase obligations		$	12,473		$	2,317		$	2,404		$	1,174		$	1,348		$	642		$	4,588
Consumers
PPAs
MCV PPA		$	2,204		$	349		$	348		$	346		$	306		$	231		$	624
Palisades PPA		116			116			—			—			—			—			—
Related-party PPAs		342			65			65			65			47			29			71
Other PPAs		5,366			298			334			351			356			346			3,681
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		3,950			1,381			1,596			364			594			12			3
Total purchase obligations		$	11,978		$	2,209		$	2,343		$	1,126		$	1,303		$	618		$	4,379

MCV PPA: Consumers has a PPA with the MCV Partnership giving Consumers the right to purchase up to 1,240 MW of capacity and energy produced by the MCV Facility. The PPA was amended during 2020 and was approved by the MPSC in 2021. The amended and restated MCV PPA provides for:

•an extension of the termination date from March 2025 to May 2030

•a capacity charge of $10.14 per MWh of available capacity through March 2025 and $5.00 per MWh of available capacity from March 2025 through the termination date of the PPA

•a fixed energy charge of $6.30 per MWh for on-peak hours and $6.00 for off-peak hours

•a variable energy charge based on the MCV Partnership’s cost of production for energy delivered to Consumers

•a $5 million annual contribution by the MCV Partnership to a renewable resources program through March 2025

Capacity and energy charges under the MCV PPA were $348 million in 2021, $298 million in 2020, and $318 million in 2019.

Palisades PPA: Consumers has a PPA expiring in May 2022 with Entergy to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. For all delivered energy, the Palisades PPA has escalating capacity and variable energy charges. Total capacity and energy charges under the Palisades PPA were $413 million in 2021, $403 million in 2020, and $395 million in 2019. For further details about Palisades, see Note 8, Leases and Palisades Financing.

Other PPAs: Consumers has PPAs expiring through 2048 with various counterparties. The majority of the PPAs have capacity and energy charges for delivered energy. In addition, CMS Energy and Consumers account for several of their PPAs as leases. Capacity and energy charges under these PPAs were $338 million in 2021, $327 million in 2020, and $336 million in 2019. See Note 8, Leases and Palisades Financing for more information about CMS Energy’s and Consumers’ lease obligations.

Consumers Energy Company

Other Commitments [Line Items]

Contingencies and Commitments

Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities. Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made. Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Bay Harbor: CMS Land retained environmental remediation obligations for the collection and treatment of leachate at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and EGLE finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit, which was renewed in January 2022 and is valid through 2025.

At December 31, 2021, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $57 million. CMS Energy expects to pay the following amounts for long-term leachate disposal and operating and maintenance costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy
Long-term leachate disposal and operating and maintenance costs		$	4		$	4		$	4		$	4		$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim: In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea. The government of Equatorial Guinea claims that, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating with CMS Energy. CMS Energy has concluded that the government’s tax claim is without merit and believes the likelihood of material loss to be remote, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $2 million and $4 million. At December 31, 2021, Consumers had a recorded liability of $2 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA. CERCLA liability is joint and several. In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site. The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. In 2011, Consumers received a follow-up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River. All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million. Various factors, including the number and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At December 31, 2021, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability, as no amount in the range was considered a better estimate than any other amount.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB: In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed part of the PCB material and replaced it with non‑PCB material. Consumers has had several communications with the EPA regarding this matter, but cannot predict the financial impact or outcome.

MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. In 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with a claim against Consumers that was related to the Clean Air Act. In November 2020, the MCV Partnership and Consumers signed a settlement agreement resolving all remaining disputes between the parties, and filed the settlement and associated agreements with the MPSC for approval. In March 2021, the MPSC approved the settlement and associated agreements.

Consumers Gas Utility Contingencies

Gas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At December 31, 2021, Consumers had a recorded liability of $57 million for its remaining obligations for these sites. This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent. The undiscounted amount of the remaining obligation is $61 million. Consumers expects to pay the following amounts for remediation and other response activity costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
Consumers
Remediation and other response activity costs		$	3		$	9		$	24		$	11		$	1

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period. At December 31, 2021, Consumers had a regulatory asset of $112 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million. At December 31, 2021, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of

the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages.

In September 2020, the MPSC disallowed the recovery of $7 million in incremental gas purchases related to the fire. In January 2021, the MPSC denied Consumers’ petition for a rehearing challenging this disallowance. In February 2021, Consumers filed an appeal of the MPSC’s denial with the Michigan Court of Appeals. Consumers could also be subject to disallowances of costs associated with the repair and modification of the Ray Compressor Station. At December 31, 2021, Consumers had incurred capital expenditures of $17 million to restore and modify the compressor station.

As of December 31, 2021, Consumers had recorded an insurance recovery of $13 million related to the compressor station. During 2021, Consumers recognized $6 million of the insurance recovery as a reduction to plant, property, and equipment, $3 million as a reduction of maintenance and other operating expenses, and $4 million as operating revenue, which represented recovery of incremental gas purchases related to the fire.

At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on CMS Energy’s and Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2021:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from purchase of VIE1	September 2020	indefinite		$	314		$	—
Indemnity obligations from stock and asset sale agreements2	various	indefinite		225			4
Guarantee3	July 2011	indefinite		30			—
Consumers
Guarantee3	July 2011	indefinite		$	30		$	—

1In conjunction with the purchase of its interest in Aviator Wind Equity Holdings, CMS Enterprises assumed certain indemnity obligations that protect the associated tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest in Aviator Wind. CMS Enterprises would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on CMS Enterprises’ ownership interest in Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes and breaches of representations and warranties. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note and an indemnity provided in connection with the sale of EnerBank to Regions Bank. For further details on the sale, see Note 20, Exit Activities and Discontinued Operations. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

3This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. At December 31, 2021, the carrying value of these indemnity obligations was $1 million. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

In addition to the matters disclosed in this Note, Note 2, Regulatory Matters, and Note 20, Exit Activities and Discontinued Operations, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Contractual Commitments

Purchase Obligations: Purchase obligations arise from long-term contracts for the purchase of commodities and related services, plant purchase commitments, and construction and service agreements. The commodities and related services include long-term PPAs, natural gas and associated transportation, and coal and associated transportation. Related-party PPAs are between Consumers and certain affiliates

of CMS Enterprises. Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2021 for each of the periods shown:

In Millions
	Payments Due
	Total			2022			2023			2024			2025			2026			Beyond 2026
CMS Energy, including Consumers
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		4,445			1,489			1,657			412			639			36			212
Total purchase obligations		$	12,473		$	2,317		$	2,404		$	1,174		$	1,348		$	642		$	4,588
Consumers
PPAs
MCV PPA		$	2,204		$	349		$	348		$	346		$	306		$	231		$	624
Palisades PPA		116			116			—			—			—			—			—
Related-party PPAs		342			65			65			65			47			29			71
Other PPAs		5,366			298			334			351			356			346			3,681
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		3,950			1,381			1,596			364			594			12			3
Total purchase obligations		$	11,978		$	2,209		$	2,343		$	1,126		$	1,303		$	618		$	4,379

MCV PPA: Consumers has a PPA with the MCV Partnership giving Consumers the right to purchase up to 1,240 MW of capacity and energy produced by the MCV Facility. The PPA was amended during 2020 and was approved by the MPSC in 2021. The amended and restated MCV PPA provides for:

•an extension of the termination date from March 2025 to May 2030

•a capacity charge of $10.14 per MWh of available capacity through March 2025 and $5.00 per MWh of available capacity from March 2025 through the termination date of the PPA

•a fixed energy charge of $6.30 per MWh for on-peak hours and $6.00 for off-peak hours

•a variable energy charge based on the MCV Partnership’s cost of production for energy delivered to Consumers

•a $5 million annual contribution by the MCV Partnership to a renewable resources program through March 2025

Capacity and energy charges under the MCV PPA were $348 million in 2021, $298 million in 2020, and $318 million in 2019.

Palisades PPA: Consumers has a PPA expiring in May 2022 with Entergy to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. For all delivered energy, the Palisades PPA has escalating capacity and variable energy charges. Total capacity and energy charges under the Palisades PPA were $413 million in 2021, $403 million in 2020, and $395 million in 2019. For further details about Palisades, see Note 8, Leases and Palisades Financing.

Other PPAs: Consumers has PPAs expiring through 2048 with various counterparties. The majority of the PPAs have capacity and energy charges for delivered energy. In addition, CMS Energy and Consumers account for several of their PPAs as leases. Capacity and energy charges under these PPAs were $338 million in 2021, $327 million in 2020, and $336 million in 2019. See Note 8, Leases and Palisades Financing for more information about CMS Energy’s and Consumers’ lease obligations.

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Financings and Capitalization

12 Months Ended

Dec. 31, 2021

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Presented in the following table is CMS Energy’s long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity	2021			2020
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Term loan facility	variable		2021		—			200
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	4,185
Consumers					8,505			8,197
CMS Enterprises, including subsidiaries
Term loan facility	variable	4	2025		78			85
Total principal amount outstanding					$	12,568		$	12,467
Current amounts					(373)			(571)
Unamortized discounts					(31)			(33)
Unamortized issuance costs					(118)			(119)
Total long-term debt					$	12,046		$	11,744

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent.

4A subsidiary of CMS Enterprises issued non‑recourse debt to finance the acquisition of a wind generation project in Northwest Ohio. The interest rate for the debt is three-month LIBOR plus 1.500 percent through October 2022 and three-month LIBOR plus 1.750 percent thereafter. At December 31, 2021 and 2020, the interest rate was 1.724 percent and 1.754 percent, respectively. The same subsidiary of CMS Enterprises entered into interest rate swaps with the lending banks to fix the interest charges associated with the debt, at a rate of 4.702 percent through October 2022 and 4.952 percent thereafter. Principal and interest payments are made quarterly. For information about the interest rate swaps, see Note 5, Fair Value Measurements.

Presented in the following table is Consumers’ long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity		2021			2020
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,197		$	7,897
Tax-exempt revenue bonds	0.875	2	2035			35			—
	1.800	3	2049			75			75
						$	110		$	75
Securitization bonds	3.290	4	2025-2029	5		198			225
Total principal amount outstanding						$	8,505		$	8,197
Current amounts						(365)			(364)
Unamortized discounts						(28)			(29)
Unamortized issuance costs						(62)			(62)
Total long-term debt						$	8,050		$	7,742

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor (zero percent at December 31, 2021) and (zero percent at December 31, 2020). The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2021.

2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.290 percent at December 31, 2021 and 3.250 percent at December 31, 2020.

5Principal and interest payments are made semiannually.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2021:

	Principal (In Millions)			Interest Rate	Issuance Date	Maturity Date
Consumers
First mortgage bonds		$	300	2.650%	August 2021	August 2052
Tax-exempt revenue bonds1		35		0.875%	October 2021	April 2035

1    

Presented in the following table is a summary of major long-term debt retirements during year ended December 31, 2021:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
CMS Energy, parent only
Term Loan facility		$	200	variable	October 2021	November 2021

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Its current authorization terminates on July 31, 2022. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In December 2021, Consumers filed an application for authority to issue securities between April 1, 2022 and March 31, 2024, replacing the current authorization.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2021, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	—		$	250		$	250		$	300
Consumers		365			654			332			31			32
CMS Enterprises, including subsidiaries		8			9			10			51			—
Total CMS Energy		$	373		$	663		$	592		$	332		$	332
Consumers
Long-term debt		$	365		$	654		$	332		$	31		$	32

Credit Facilities: The following credit facilities with banks were available at December 31, 2021:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20241		$	550		$	—		$	24		$	526
September 23, 20222		31			—			31			—
CMS Enterprises, including subsidiaries
September 25, 20253		$	39		$	—		$	39		$	—
September 30, 20254		18			—			8			10
Consumers5
June 5, 2024		$	850		$	—		$	12		$	838
November 19, 2023		250			—			8			242
April 18, 2022		30			—			30			—

1There were no borrowings under this facility during the year ended December 31, 2021.

2The maximum aggregate of letters of credit that may be issued under this facility is $50 million. The amount remaining under the facility is uncommitted.

3This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

4Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2021.

5Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2021.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers

does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2021, there were no commercial paper notes outstanding under this program.

In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of one month LIBOR minus 0.100 percent. At December 31, 2021, outstanding borrowings under the agreement were $392 million bearing an interest rate of zero percent. In January 2022, Consumers repaid $392 million of its loan outstanding with CMS Energy.

Dividend Restrictions: At December 31, 2021, payment of dividends by CMS Energy on its common stock was limited to $6.4 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2021, Consumers had $1.8 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

During the year ended December 31, 2021, Consumers paid $722 million in dividends on its common stock to CMS Energy.

Capitalization: The authorized capital stock of CMS Energy consists of:

•350 million shares of CMS Energy Common Stock, par value $0.01 per share

•10 million shares of CMS Energy Preferred Stock, par value $0.01 per share

Issuance of Common Stock: In 2020, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock. Under the program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise.

CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2021:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			December 31, 2021
September 15, 2020	June 30, 2022	846,759		$	61.04		$	58.51
December 22, 2020	June 22, 2022	115,595		61.81			59.73

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded

on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of December 31, 2021, CMS Energy would have been required to deliver 94,588 shares.

Issuance of Preferred Stock: In 2021, CMS Energy issued 9.2 million depositary shares, each representing a 1/1,000th interest in a share of its cumulative Series C preferred stock, traded on the New York Stock Exchange under the symbol CMS PRC, at a price of $25.00 per depositary share. The transaction resulted in net proceeds of $224 million, which was used for general corporate purposes. Dividends on the preferred stock accumulate at an annual rate of 4.200 percent and are payable quarterly.

The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at a price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus accumulated and unpaid dividends, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation.

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2021 and 2020:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

Consumers Energy Company

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Presented in the following table is CMS Energy’s long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity	2021			2020
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Term loan facility	variable		2021		—			200
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	4,185
Consumers					8,505			8,197
CMS Enterprises, including subsidiaries
Term loan facility	variable	4	2025		78			85
Total principal amount outstanding					$	12,568		$	12,467
Current amounts					(373)			(571)
Unamortized discounts					(31)			(33)
Unamortized issuance costs					(118)			(119)
Total long-term debt					$	12,046		$	11,744

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent.

4A subsidiary of CMS Enterprises issued non‑recourse debt to finance the acquisition of a wind generation project in Northwest Ohio. The interest rate for the debt is three-month LIBOR plus 1.500 percent through October 2022 and three-month LIBOR plus 1.750 percent thereafter. At December 31, 2021 and 2020, the interest rate was 1.724 percent and 1.754 percent, respectively. The same subsidiary of CMS Enterprises entered into interest rate swaps with the lending banks to fix the interest charges associated with the debt, at a rate of 4.702 percent through October 2022 and 4.952 percent thereafter. Principal and interest payments are made quarterly. For information about the interest rate swaps, see Note 5, Fair Value Measurements.

Presented in the following table is Consumers’ long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity		2021			2020
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,197		$	7,897
Tax-exempt revenue bonds	0.875	2	2035			35			—
	1.800	3	2049			75			75
						$	110		$	75
Securitization bonds	3.290	4	2025-2029	5		198			225
Total principal amount outstanding						$	8,505		$	8,197
Current amounts						(365)			(364)
Unamortized discounts						(28)			(29)
Unamortized issuance costs						(62)			(62)
Total long-term debt						$	8,050		$	7,742

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor (zero percent at December 31, 2021) and (zero percent at December 31, 2020). The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2021.

2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.290 percent at December 31, 2021 and 3.250 percent at December 31, 2020.

5Principal and interest payments are made semiannually.

Financings: Presented in the following table is a summary of major long-term debt issuances during 2021:

	Principal (In Millions)			Interest Rate	Issuance Date	Maturity Date
Consumers
First mortgage bonds		$	300	2.650%	August 2021	August 2052
Tax-exempt revenue bonds1		35		0.875%	October 2021	April 2035

1    

Presented in the following table is a summary of major long-term debt retirements during year ended December 31, 2021:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
CMS Energy, parent only
Term Loan facility		$	200	variable	October 2021	November 2021

First Mortgage Bonds: Consumers secures its first mortgage bonds by a mortgage and lien on substantially all of its property. Consumers’ ability to issue first mortgage bonds is restricted by certain provisions in the First Mortgage Bond Indenture and the need for regulatory approvals under federal law. Restrictive issuance provisions in the First Mortgage Bond Indenture include achieving a two-times interest coverage ratio and having sufficient unfunded net property additions.

Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Its current authorization terminates on July 31, 2022. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In December 2021, Consumers filed an application for authority to issue securities between April 1, 2022 and March 31, 2024, replacing the current authorization.

Securitization Bonds: Certain regulatory assets held by Consumers’ subsidiary, Consumers 2014 Securitization Funding, collateralize Consumers’ securitization bonds. The bondholders have no recourse to Consumers’ assets except for those held by the subsidiary that issued the bonds. Consumers collects securitization surcharges to cover the principal and interest on the bonds as well as certain other qualified costs. The surcharges collected are remitted to a trustee and are not available to creditors of Consumers or creditors of Consumers’ affiliates other than the subsidiary that issued the bonds.

Debt Maturities: At December 31, 2021, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	—		$	250		$	250		$	300
Consumers		365			654			332			31			32
CMS Enterprises, including subsidiaries		8			9			10			51			—
Total CMS Energy		$	373		$	663		$	592		$	332		$	332
Consumers
Long-term debt		$	365		$	654		$	332		$	31		$	32

Credit Facilities: The following credit facilities with banks were available at December 31, 2021:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20241		$	550		$	—		$	24		$	526
September 23, 20222		31			—			31			—
CMS Enterprises, including subsidiaries
September 25, 20253		$	39		$	—		$	39		$	—
September 30, 20254		18			—			8			10
Consumers5
June 5, 2024		$	850		$	—		$	12		$	838
November 19, 2023		250			—			8			242
April 18, 2022		30			—			30			—

1There were no borrowings under this facility during the year ended December 31, 2021.

2The maximum aggregate of letters of credit that may be issued under this facility is $50 million. The amount remaining under the facility is uncommitted.

3This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

4Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2021.

5Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2021.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers

does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At December 31, 2021, there were no commercial paper notes outstanding under this program.

In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of one month LIBOR minus 0.100 percent. At December 31, 2021, outstanding borrowings under the agreement were $392 million bearing an interest rate of zero percent. In January 2022, Consumers repaid $392 million of its loan outstanding with CMS Energy.

Dividend Restrictions: At December 31, 2021, payment of dividends by CMS Energy on its common stock was limited to $6.4 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at December 31, 2021, Consumers had $1.8 billion of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that, under a variety of circumstances, dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

During the year ended December 31, 2021, Consumers paid $722 million in dividends on its common stock to CMS Energy.

Capitalization: The authorized capital stock of CMS Energy consists of:

•350 million shares of CMS Energy Common Stock, par value $0.01 per share

•10 million shares of CMS Energy Preferred Stock, par value $0.01 per share

Issuance of Common Stock: In 2020, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock. Under the program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions, or otherwise.

CMS Energy may sell shares of its common stock having an aggregate sales price of up to $500 million. Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2021:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			December 31, 2021
September 15, 2020	June 30, 2022	846,759		$	61.04		$	58.51
December 22, 2020	June 22, 2022	115,595		61.81			59.73

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded

on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of December 31, 2021, CMS Energy would have been required to deliver 94,588 shares.

Issuance of Preferred Stock: In 2021, CMS Energy issued 9.2 million depositary shares, each representing a 1/1,000th interest in a share of its cumulative Series C preferred stock, traded on the New York Stock Exchange under the symbol CMS PRC, at a price of $25.00 per depositary share. The transaction resulted in net proceeds of $224 million, which was used for general corporate purposes. Dividends on the preferred stock accumulate at an annual rate of 4.200 percent and are payable quarterly.

The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at a price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus accumulated and unpaid dividends, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation.

Preferred Stock of Subsidiary: Consumers’ preferred stock is traded on the New York Stock Exchange under the symbol CMS-PB. Presented in the following table are details of Consumers’ preferred stock at December 31, 2021 and 2020:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

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Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements

Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

•Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

•Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
December 31	2021			2020			2021			2020
Assets1
Restricted cash equivalents		$	24		$	17		$	22		$	15
Nonqualified deferred compensation plan assets		27			23			21			18
Derivative instruments		2			1			2			1
Total assets		$	53		$	41		$	45		$	34
Liabilities1
Nonqualified deferred compensation plan liabilities		$	27		$	23		$	21		$	18
Derivative instruments		7			11			—			—
Total liabilities		$	34		$	34		21			$	18

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Restricted Cash Equivalents: Restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 16, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. CMS Energy’s and Consumers’ derivatives are classified as Level 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market-based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $78 million at December 31, 2021 and $85 million at December 31, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within interest on long-term debt on CMS Energy’s consolidated statements of income. CMS Energy recorded gains (losses) of $2 million in 2021, $(6) million in 2020, and $(4) million in 2019. There were no material impacts on

interest on long-term debt associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $4 million at December 31, 2021 and $9 million at December 31, 2020. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the periods presented.

The majority of derivatives classified as Level 3 are FTRs held by Consumers. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Presented in the following table are Consumers’ assets, by level within the fair value hierarchy, reported at fair value on a nonrecurring basis during the year ended December 31, 2021:

In Millions
	Level 1			Level 2			Level 3			Gains (Losses)
Assets held for sale		$	—		$	15		$	—	$	(4)

In 2021, Consumers wrote down fleet assets held for sale from their carrying amount of $19 million to their fair value, less selling costs, of $15 million, resulting in an impairment charge of $4 million, which was recorded within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. The fair value was determined based on the market prices of similar fleet vehicles. For additional information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

Consumers Energy Company

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements

Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

•Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

•Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

•Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
December 31	2021			2020			2021			2020
Assets1
Restricted cash equivalents		$	24		$	17		$	22		$	15
Nonqualified deferred compensation plan assets		27			23			21			18
Derivative instruments		2			1			2			1
Total assets		$	53		$	41		$	45		$	34
Liabilities1
Nonqualified deferred compensation plan liabilities		$	27		$	23		$	21		$	18
Derivative instruments		7			11			—			—
Total liabilities		$	34		$	34		21			$	18

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Restricted Cash Equivalents: Restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 16, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. CMS Energy’s and Consumers’ derivatives are classified as Level 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market-based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $78 million at December 31, 2021 and $85 million at December 31, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within interest on long-term debt on CMS Energy’s consolidated statements of income. CMS Energy recorded gains (losses) of $2 million in 2021, $(6) million in 2020, and $(4) million in 2019. There were no material impacts on

interest on long-term debt associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $4 million at December 31, 2021 and $9 million at December 31, 2020. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the periods presented.

The majority of derivatives classified as Level 3 are FTRs held by Consumers. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Presented in the following table are Consumers’ assets, by level within the fair value hierarchy, reported at fair value on a nonrecurring basis during the year ended December 31, 2021:

In Millions
	Level 1			Level 2			Level 3			Gains (Losses)
Assets held for sale		$	—		$	15		$	—	$	(4)

In 2021, Consumers wrote down fleet assets held for sale from their carrying amount of $19 million to their fair value, less selling costs, of $15 million, resulting in an impairment charge of $4 million, which was recorded within maintenance and other operating expenses on its consolidated statements of income for the year ended December 31, 2021. The fair value was determined based on the market prices of similar fleet vehicles. For additional information, see Item 8. Financial Statements and Supplementary Data—Notes to the Consolidated Financial Statements—Note 2, Regulatory Matters.

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Financial Instruments

12 Months Ended

Dec. 31, 2021

Financial Instruments [Line Items]

Financial Instruments

Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value. The table excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	December 31, 2021															December 31, 2020
	Carrying Amount			Fair Value												Carrying Amount			Fair Value
				Total			Level												Total			Level
							1			2			3									1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Liabilities
Long-term debt2		12,419			13,800			1,189			10,656			1,955			12,315			14,601			1,249			11,267			2,085
Long-term payables3		31			32			—			—			32			33			35			—			—			35
Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Notes receivable – related party4		104			104			—			—			104			107			107			—			—			107
Liabilities
Long-term debt5		8,415			9,410			—			7,455			1,955			8,106			9,801			—			7,716			2,085

1Includes current portion of long-term accounts receivable of $9 million at December 31, 2021 and $12 million at December 31, 2020.

2Includes current portion of long-term debt of $373 million at December 31, 2021 and $571 million at December 31, 2020.

3Includes current portion of long-term payables of $23 million at December 31, 2021 and $6 million at December 31, 2020.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2021 and 2020.

5Includes current portion of long-term debt of $365 million at December 31, 2021 and $364 million at December 31, 2020.

Consumers Energy Company

Financial Instruments [Line Items]

Financial Instruments

Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value. The table excludes cash, cash equivalents, short-term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	December 31, 2021															December 31, 2020
	Carrying Amount			Fair Value												Carrying Amount			Fair Value
				Total			Level												Total			Level
							1			2			3									1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Liabilities
Long-term debt2		12,419			13,800			1,189			10,656			1,955			12,315			14,601			1,249			11,267			2,085
Long-term payables3		31			32			—			—			32			33			35			—			—			35
Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Notes receivable – related party4		104			104			—			—			104			107			107			—			—			107
Liabilities
Long-term debt5		8,415			9,410			—			7,455			1,955			8,106			9,801			—			7,716			2,085

1Includes current portion of long-term accounts receivable of $9 million at December 31, 2021 and $12 million at December 31, 2020.

2Includes current portion of long-term debt of $373 million at December 31, 2021 and $571 million at December 31, 2020.

3Includes current portion of long-term payables of $23 million at December 31, 2021 and $6 million at December 31, 2020.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2021 and 2020.

5Includes current portion of long-term debt of $365 million at December 31, 2021 and $364 million at December 31, 2020.

The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

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Plant, Property, and Equipment

12 Months Ended

Dec. 31, 2021

Public Utility, Property, Plant and Equipment [Line Items]

Plant, Property, and Equipment

Plant, Property, and Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions
December 31	Estimated Depreciable Life in Years	2021			2020
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers	3 - 125		$	28,771		$	26,757
Enterprises
Independent power production1	2 - 40		1,121			1,112
Other	3 - 5		1			1
Plant, property, and equipment, gross			$	29,893		$	27,870
Construction work in progress			961			1,085
Accumulated depreciation and amortization			(8,502)			(7,938)
Total plant, property, and equipment2			$	22,352		$	21,017
Consumers
Plant, property, and equipment, gross
Electric
Generation	22 - 125		$	6,704		$	6,376
Distribution	20 - 75		9,815			9,130
Other	5 - 50		1,309			1,326
Assets under finance leases and other financing3			319			323
Gas
Distribution	20 - 85		6,338			5,702
Transmission	17 - 75		2,319			2,003
Underground storage facilities4	27 - 75		1,117			1,046
Other	5 - 50		814			817
Assets under finance leases3			13			13
Other non-utility property	3 - 51		23			21
Plant, property, and equipment, gross			$	28,771		$	26,757
Construction work in progress			915			1,058
Accumulated depreciation and amortization			(8,371)			(7,844)
Total plant, property, and equipment2			$	21,315		$	19,971

1A significant portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 8, Leases and Palisades Financing.

2Consumers’ plant additions were $2.4 billion for the year ended December 31, 2021 and $2.0 billion for the year ended December 31, 2020. Consumers’ plant retirements, which include the impact of disallowances and transfers to held for sale, were $361 million for the year ended December 31, 2021, and $220 million for the year ended December 31, 2020.

3For information regarding the amortization terms of Consumers’ assets under finance leases and other financing, see Note 8, Leases and Palisades Financing.

4Underground storage includes base natural gas of $26 million at December 31, 2021 and 2020. Base natural gas is not subject to depreciation.

Intangible Assets: Included in net plant, property, and equipment are intangible assets. Presented in the following table are details about CMS Energy’s and Consumers’ intangible assets:

In Millions
Description	Amortization Life in Years	December 31, 2021						December 31, 2020
		Gross Cost1			Accumulated Amortization			Gross Cost1			Accumulated Amortization
CMS Energy, including Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			26			16
Total			$	1,102		$	684		$	1,105		$	658
Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			25			16
Total			$	1,102		$	684		$	1,104		$	658

1Consumers’ intangible asset additions were $88 million for the year ended December 31, 2021 and $69 million for the year ended December 31, 2020. Consumers’ intangible asset retirements were $91 million for the year ended December 31, 2021 and $65 million for the year ended December 31, 2020.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use

computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects, except pollution control facilities on its fossil-fuel-fired power plants. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset. Presented in the following table are Consumers’ average AFUDC capitalization rates:

Years Ended December 31	2021		2020		2019
Electric	6.2	%	6.9	%	6.4	%
Gas	5.6		5.7		5.8

Assets Under Finance Leases and Other Financing: Presented in the following table are further details about changes in Consumers’ assets under finance leases and other financing:

In Millions
Years Ended December 31	2021			2020
Consumers
Balance at beginning of period		$	336		$	340
Additions		—			—
Net retirements and other adjustments		(4)			(4)
Balance at end of period		$	332		$	336

Assets under finance leases and other financing are presented as gross amounts. Consumers’ accumulated amortization of assets under finance leases and other financing was $272 million at December 31, 2021 and $254 million at December 31, 2020.

Depreciation and Amortization: Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		136			97
Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		5			3

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and

gas segments. Consumers performs depreciation studies periodically to determine appropriate group lives. Presented in the following table are the composite depreciation rates for Consumers’ segment properties:

Years Ended December 31	2021		2020		2019
Electric utility property	3.9	%	3.9	%	3.9	%
Gas utility property	2.9		2.9		2.9
Other property	9.4		9.8		10.0

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment		$	975		$	901		$	841
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,114		$	1,043		$	989
Consumers
Depreciation expense – plant, property, and equipment		$	938		$	881		$	827
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,077		$	1,023		$	975

Presented in the following table is CMS Energy’s and Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84
Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84

Jointly Owned Regulated Utility Facilities

Presented in the following table are Consumers’ investments in jointly owned regulated utility facilities at December 31, 2021:

In Millions, Except Ownership Share
	J.H. Campbell Unit 3				Ludington				Other
Ownership share		93.3		%		51.0		%		various
Utility plant in service		$	1,751			$	499			$	395
Accumulated depreciation		(897)				(198)				(112)
Construction work in progress		21				92				13
Net investment		$	875			$	393			$	296

Consumers includes its share of the direct expenses of the jointly owned plants in operating expenses. Consumers shares operation, maintenance, and other expenses of these jointly owned utility facilities in proportion to each participant’s undivided ownership interest. Consumers is required to provide only its share of financing for the jointly owned utility facilities.

Consumers Energy Company

Public Utility, Property, Plant and Equipment [Line Items]

Plant, Property, and Equipment

Plant, Property, and Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions
December 31	Estimated Depreciable Life in Years	2021			2020
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers	3 - 125		$	28,771		$	26,757
Enterprises
Independent power production1	2 - 40		1,121			1,112
Other	3 - 5		1			1
Plant, property, and equipment, gross			$	29,893		$	27,870
Construction work in progress			961			1,085
Accumulated depreciation and amortization			(8,502)			(7,938)
Total plant, property, and equipment2			$	22,352		$	21,017
Consumers
Plant, property, and equipment, gross
Electric
Generation	22 - 125		$	6,704		$	6,376
Distribution	20 - 75		9,815			9,130
Other	5 - 50		1,309			1,326
Assets under finance leases and other financing3			319			323
Gas
Distribution	20 - 85		6,338			5,702
Transmission	17 - 75		2,319			2,003
Underground storage facilities4	27 - 75		1,117			1,046
Other	5 - 50		814			817
Assets under finance leases3			13			13
Other non-utility property	3 - 51		23			21
Plant, property, and equipment, gross			$	28,771		$	26,757
Construction work in progress			915			1,058
Accumulated depreciation and amortization			(8,371)			(7,844)
Total plant, property, and equipment2			$	21,315		$	19,971

1A significant portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 8, Leases and Palisades Financing.

2Consumers’ plant additions were $2.4 billion for the year ended December 31, 2021 and $2.0 billion for the year ended December 31, 2020. Consumers’ plant retirements, which include the impact of disallowances and transfers to held for sale, were $361 million for the year ended December 31, 2021, and $220 million for the year ended December 31, 2020.

3For information regarding the amortization terms of Consumers’ assets under finance leases and other financing, see Note 8, Leases and Palisades Financing.

4Underground storage includes base natural gas of $26 million at December 31, 2021 and 2020. Base natural gas is not subject to depreciation.

Intangible Assets: Included in net plant, property, and equipment are intangible assets. Presented in the following table are details about CMS Energy’s and Consumers’ intangible assets:

In Millions
Description	Amortization Life in Years	December 31, 2021						December 31, 2020
		Gross Cost1			Accumulated Amortization			Gross Cost1			Accumulated Amortization
CMS Energy, including Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			26			16
Total			$	1,102		$	684		$	1,105		$	658
Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			25			16
Total			$	1,102		$	684		$	1,104		$	658

1Consumers’ intangible asset additions were $88 million for the year ended December 31, 2021 and $69 million for the year ended December 31, 2020. Consumers’ intangible asset retirements were $91 million for the year ended December 31, 2021 and $65 million for the year ended December 31, 2020.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use

computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects, except pollution control facilities on its fossil-fuel-fired power plants. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset. Presented in the following table are Consumers’ average AFUDC capitalization rates:

Years Ended December 31	2021		2020		2019
Electric	6.2	%	6.9	%	6.4	%
Gas	5.6		5.7		5.8

Assets Under Finance Leases and Other Financing: Presented in the following table are further details about changes in Consumers’ assets under finance leases and other financing:

In Millions
Years Ended December 31	2021			2020
Consumers
Balance at beginning of period		$	336		$	340
Additions		—			—
Net retirements and other adjustments		(4)			(4)
Balance at end of period		$	332		$	336

Assets under finance leases and other financing are presented as gross amounts. Consumers’ accumulated amortization of assets under finance leases and other financing was $272 million at December 31, 2021 and $254 million at December 31, 2020.

Depreciation and Amortization: Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		136			97
Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		5			3

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and

gas segments. Consumers performs depreciation studies periodically to determine appropriate group lives. Presented in the following table are the composite depreciation rates for Consumers’ segment properties:

Years Ended December 31	2021		2020		2019
Electric utility property	3.9	%	3.9	%	3.9	%
Gas utility property	2.9		2.9		2.9
Other property	9.4		9.8		10.0

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment		$	975		$	901		$	841
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,114		$	1,043		$	989
Consumers
Depreciation expense – plant, property, and equipment		$	938		$	881		$	827
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,077		$	1,023		$	975

Presented in the following table is CMS Energy’s and Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84
Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84

Jointly Owned Regulated Utility Facilities

Presented in the following table are Consumers’ investments in jointly owned regulated utility facilities at December 31, 2021:

In Millions, Except Ownership Share
	J.H. Campbell Unit 3				Ludington				Other
Ownership share		93.3		%		51.0		%		various
Utility plant in service		$	1,751			$	499			$	395
Accumulated depreciation		(897)				(198)				(112)
Construction work in progress		21				92				13
Net investment		$	875			$	393			$	296

Consumers includes its share of the direct expenses of the jointly owned plants in operating expenses. Consumers shares operation, maintenance, and other expenses of these jointly owned utility facilities in proportion to each participant’s undivided ownership interest. Consumers is required to provide only its share of financing for the jointly owned utility facilities.

XML

Leases and Palisades Financing

12 Months Ended

Dec. 31, 2021

Leases [Line Items]

Leases and Palisades Financing

Leases and Palisades Financing

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2021 and 2020.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

CMS Energy and Consumers report operating, variable, and short-term lease costs as operating expenses on their consolidated statements of income, except for certain amounts that may be capitalized to other assets. Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

Lessor

CMS Energy and Consumers are the lessor under power sales and natural gas delivery agreements that are accounted for as leases.

CMS Energy has power sales agreements that are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. For the year ended December 31, 2021, lease revenue from these power sales agreements was $194 million, which included variable lease payments of $138 million. For the year ended December 31, 2020, lease revenue from these power sales agreements was $148 million, which included variable lease payments of $93 million.

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2021
2022	$	48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	196

Consumers has an agreement to build, own, operate, and maintain a compressed natural gas fueling station through December 2038. This agreement is accounted for as a direct finance lease, under which the lessee has the option to purchase the natural gas fueling station at the end of the lease term. Fixed monthly payments escalate annually with inflation.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. This agreement is accounted for as a direct finance lease and will automatically extend annually unless terminated by either party. The effects of the lease are eliminated on CMS Energy’s consolidated financial statements.

Minimum rental payments to be received under Consumers’ direct financing leases are $1 million for each of the next five years and $17 million for the years thereafter. The lease receivable was $10 million as of December 31, 2021, which does not include unearned income of $12 million.

Minimum rental payments to be received under CMS Energy’s direct finance lease are less than $1 million for each of the next five years and $6 million for the years thereafter. The lease receivable was $5 million as of December 31, 2021, which does not include unearned income of $4 million.

Palisades Financing

In 2007, Consumers sold Palisades to Entergy and entered into a 15-year PPA to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. Consumers accounted for this transaction as a financing because of its continuing involvement with Palisades through security provided to Entergy for the PPA obligation and other arrangements. Palisades has therefore remained on Consumers’ consolidated balance sheets and Consumers has continued to depreciate it. At the time of the sale, Consumers recorded the sales proceeds as a financing obligation, and has subsequently recorded a portion of the payments under the PPA as interest expense and as a reduction of the financing obligation.

Total amortization and interest charges under the financing were $14 million for the years ended December 31, 2021 and 2020, and $15 million for the year ended December 31, 2019. At December 31, 2021, the Palisades asset and financing obligation both had a balance of $3 million. The finance obligation reflects Consumers’ remaining minimum Palisades PPA payments.

Consumers Energy Company

Leases [Line Items]

Leases and Palisades Financing

Leases and Palisades Financing

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2021 and 2020.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

CMS Energy and Consumers report operating, variable, and short-term lease costs as operating expenses on their consolidated statements of income, except for certain amounts that may be capitalized to other assets. Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

Lessor

CMS Energy and Consumers are the lessor under power sales and natural gas delivery agreements that are accounted for as leases.

CMS Energy has power sales agreements that are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. For the year ended December 31, 2021, lease revenue from these power sales agreements was $194 million, which included variable lease payments of $138 million. For the year ended December 31, 2020, lease revenue from these power sales agreements was $148 million, which included variable lease payments of $93 million.

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2021
2022	$	48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	196

Consumers has an agreement to build, own, operate, and maintain a compressed natural gas fueling station through December 2038. This agreement is accounted for as a direct finance lease, under which the lessee has the option to purchase the natural gas fueling station at the end of the lease term. Fixed monthly payments escalate annually with inflation.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. This agreement is accounted for as a direct finance lease and will automatically extend annually unless terminated by either party. The effects of the lease are eliminated on CMS Energy’s consolidated financial statements.

Minimum rental payments to be received under Consumers’ direct financing leases are $1 million for each of the next five years and $17 million for the years thereafter. The lease receivable was $10 million as of December 31, 2021, which does not include unearned income of $12 million.

Minimum rental payments to be received under CMS Energy’s direct finance lease are less than $1 million for each of the next five years and $6 million for the years thereafter. The lease receivable was $5 million as of December 31, 2021, which does not include unearned income of $4 million.

Palisades Financing

In 2007, Consumers sold Palisades to Entergy and entered into a 15-year PPA to purchase virtually all of the capacity and energy produced by Palisades, up to the annual average capacity of 798 MW. Consumers accounted for this transaction as a financing because of its continuing involvement with Palisades through security provided to Entergy for the PPA obligation and other arrangements. Palisades has therefore remained on Consumers’ consolidated balance sheets and Consumers has continued to depreciate it. At the time of the sale, Consumers recorded the sales proceeds as a financing obligation, and has subsequently recorded a portion of the payments under the PPA as interest expense and as a reduction of the financing obligation.

Total amortization and interest charges under the financing were $14 million for the years ended December 31, 2021 and 2020, and $15 million for the year ended December 31, 2019. At December 31, 2021, the Palisades asset and financing obligation both had a balance of $3 million. The finance obligation reflects Consumers’ remaining minimum Palisades PPA payments.

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Asset Retirement Obligations

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligations [Line Items]

Asset Retirement Obligations

Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life. CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

Company and ARO Description	In-Service Date	Long-Lived Assets
CMS Energy, including Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage
Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage

No assets have been restricted for purposes of settling AROs.

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2020			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2021
CMS Energy, including Consumers
Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605
Renewable generation assets		23			—			—			—			—			23
Total CMS Energy		$	553		$	71		$	(53)		$	24		$	33		$	628
Consumers
Coal ash disposal areas		$	148		$	—		$	(34)		$	5		$	38		$	157
Gas distribution cut, purge, and cap		240			39			(10)			13			—			282
Asbestos abatement		36			—			—			2			—			38
Renewable generation assets		74			16			—			3			—			93
Gas wells plug and abandon		32			16			(9)			1			(5)			35
Total Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605

In Millions
Company and ARO Description	ARO Liability 12/31/2019			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2020
CMS Energy, including Consumers
Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530
Renewable generation assets		3			19			—			1			—			23
Total CMS Energy		$	477		$	65		$	(41)		$	24		$	28		$	553
Consumers
Coal ash disposal areas		$	166		$	—		$	(24)		$	6		$	—		$	148
Gas distribution cut, purge, and cap		231			1			(5)			13			—			240
Asbestos abatement		34			—			—			2			—			36
Renewable generation assets		21			24			—			1			28			74
Gas wells plug and abandon		22			16			(7)			1			—			32
Cable under Straits of Mackinac		—			5			(5)			—			—			—
Total Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530

Consumers Energy Company

Asset Retirement Obligations [Line Items]

Asset Retirement Obligations

Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life. CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

Company and ARO Description	In-Service Date	Long-Lived Assets
CMS Energy, including Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage
Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage

No assets have been restricted for purposes of settling AROs.

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2020			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2021
CMS Energy, including Consumers
Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605
Renewable generation assets		23			—			—			—			—			23
Total CMS Energy		$	553		$	71		$	(53)		$	24		$	33		$	628
Consumers
Coal ash disposal areas		$	148		$	—		$	(34)		$	5		$	38		$	157
Gas distribution cut, purge, and cap		240			39			(10)			13			—			282
Asbestos abatement		36			—			—			2			—			38
Renewable generation assets		74			16			—			3			—			93
Gas wells plug and abandon		32			16			(9)			1			(5)			35
Total Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605

In Millions
Company and ARO Description	ARO Liability 12/31/2019			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2020
CMS Energy, including Consumers
Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530
Renewable generation assets		3			19			—			1			—			23
Total CMS Energy		$	477		$	65		$	(41)		$	24		$	28		$	553
Consumers
Coal ash disposal areas		$	166		$	—		$	(24)		$	6		$	—		$	148
Gas distribution cut, purge, and cap		231			1			(5)			13			—			240
Asbestos abatement		34			—			—			2			—			36
Renewable generation assets		21			24			—			1			28			74
Gas wells plug and abandon		22			16			(7)			1			—			32
Cable under Straits of Mackinac		—			5			(5)			—			—			—
Total Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530

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Retirement Benefits

12 Months Ended

Dec. 31, 2021

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

Benefit Plans: CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans. These plans include:

•non‑contributory, qualified DB Pension Plans (closed to new non‑union participants as of July 1, 2003 and closed to new union participants as of September 1, 2005)

•a non‑contributory, qualified DCCP for employees hired on or after July 1, 2003

•benefits to certain management employees under a non‑contributory, nonqualified DB SERP (closed to new participants as of March 31, 2006)

•a non‑contributory, nonqualified DC SERP for certain management employees hired or promoted on or after April 1, 2006

•a contributory, qualified defined contribution 401(k) plan

•health care and life insurance benefits under an OPEB Plan

DB Pension Plans: Participants in the pension plans include present and former employees of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries. Pension plan trust assets are not distinguishable by company. Effective December 31, 2017, CMS Energy’s and Consumers’ then-existing pension plan was amended to include only retired and former employees already covered; this amended plan is referred to as DB Pension Plan B. Also effective December 31, 2017, active employees were moved to a newly created pension plan, referred to as DB Pension Plan A, whose benefits mirror those provided under DB Pension Plan B. Maintaining separate plans for the two groups allows CMS Energy and Consumers to employ a more targeted investment strategy and provides additional opportunities to mitigate risk and volatility.

In November 2021, CMS Energy and Consumers determined that 2021 lump-sum payments to retired employees under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once such settlements meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of October 31, 2021 and recognized a settlement loss of $18 million; $18 million of this amount was recognized by Consumers and deferred as a regulatory asset. At December 31, 2021, CMS Energy, including Consumers, recognized an additional settlement loss of $4 million for the period November 1, 2021 to December 31, 2021; $3 million of this amount was recognized by Consumers and deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

DCCP: CMS Energy and Consumers provide an employer contribution to the DCCP 401(k) plan for employees hired on or after July 1, 2003. The contribution ranges from five percent to ten percent of base pay, depending on years of service and employee class. Employees are not required to contribute in order to receive the plan’s employer contribution. DCCP expense for CMS Energy, including Consumers, was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019. DCCP expense for Consumers was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019.

DB SERP: The DB SERP is a nonqualified plan as defined by the Internal Revenue Code. DB SERP benefits are paid from a rabbi trust established in 1988. The trust assets are not considered plan assets under ASC 715. DB SERP rabbi trust earnings are taxable. Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Trust assets		$	142		$	146
ABO		149			159
Contributions		—			8
Consumers
Trust assets		$	104		$	107
ABO		108			115
Contributions		—			5

DC SERP: On April 1, 2006, CMS Energy and Consumers implemented a DC SERP and froze further new participation in the DB SERP. The DC SERP provides participants benefits ranging from five percent to 15 percent of total compensation. The DC SERP requires a minimum of five years of participation before vesting. CMS Energy’s and Consumers’ contributions to the plan, if any, are placed in a grantor trust. For CMS Energy and Consumers, trust assets were $13 million at December 31, 2021 and $11 million at December 31, 2020. DC SERP assets are included in other non‑current assets on CMS Energy’s and Consumers’ consolidated balance sheets. CMS Energy’s and Consumers’ DC SERP expense was $2 million for the years ended December 31, 2021, 2020, and 2019.

401(k) Plan: The 401(k) plan employer match equals 100 percent of eligible contributions up to the first three percent of an employee’s wages and 50 percent of eligible contributions up to the next two percent of an employee’s wages. The total 401(k) plan cost for CMS Energy, including Consumers, was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019. The total 401(k) plan cost for Consumers was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $27 million for the year ended December 31, 2019.

OPEB Plan: Participants in the OPEB Plan include all regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least ten full years of applicable continuous service. Regular full-time employees who qualify for disability retirement under the DB Pension Plans or are disabled and covered by the DCCP and who have 15 years of applicable continuous service may also participate in the OPEB Plan. Retiree health care costs were based on the assumption that costs would increase 6.25 percent in 2022 and 6.50 percent in 2021 for those under 65 and would increase 6.75 percent in 2022 and 7.00 percent in 2021 for those over 65. The rate of increase was assumed to decline to 4.75 percent by 2028 and thereafter for all retirees.

Assumptions: Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31	2021		2020		2019
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	3.02	%	2.73	%	3.37	%
DB Pension Plan B	2.79		2.41		3.17
DB SERP	2.78		2.40		3.15
OPEB Plan	2.99		2.69		3.32
Rate of compensation increase
DB Pension Plan A	3.60		3.70		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	2.83	%	3.44	%	4.55	%
DB SERP	2.84		3.46		4.58
OPEB Plan	3.03		3.57		4.63
Interest cost discount rate2,3
DB Pension Plan A	1.97		2.92		4.08
DB Pension Plan B	1.70		2.74		3.93
DB SERP	1.72		2.74		3.94
OPEB Plan	1.99		2.88		4.03
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		6.75		7.00
OPEB Plan	6.75		6.75		7.00
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2021			2020			2019			2021			2020			2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	53		$	50		$	41		$	18		$	16		$	14
Interest cost		63			83			103			23			33			41
Settlement loss		1			1			—			—			—			—
Expected return on plan assets		(208)			(191)			(162)			(109)			(100)			(88)
Amortization of:
Net loss		100			95			50			8			15			26
Prior service cost (credit)		4			1			1			(53)			(56)			(62)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	41		$	33		$	(113)		$	(92)		$	(69)
Consumers
Net periodic cost (credit)
Service cost		$	51		$	49		$	40		$	17		$	15		$	13
Interest cost		59			78			97			23			31			40
Expected return on plan assets		(197)			(181)			(153)			(102)			(93)			(82)
Amortization of:
Net loss		96			90			47			8			15			26
Prior service cost (credit)		4			1			1			(51)			(54)			(61)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	39		$	32		$	(105)		$	(86)		$	(64)

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Reconciliations: Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2021			2020				2021			2020			2021			2020
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Service cost		53			50				—			—			18			16
Interest cost		60			79				3			4			23			33
Plan amendments		—			24				—			—			5			—
Actuarial loss (gain)		(108)		1	355		1		(4)			16			(32)		1	39		1
Benefits paid		(201)			(215)				(10)			(10)			(53)			(48)
Benefit obligation at end of period		$	3,070		$	3,266			$	149		$	160		$	1,166		$	1,205
Plan assets at fair value at beginning of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Actual return on plan assets		398			371				—			—			194			182
Company contribution		—			700				10			10			—			1
Actual benefits paid		(201)			(215)				(10)			(10)			(52)			(47)
Plan assets at fair value at end of period		$	3,599		$	3,402			$	—		$	—		$	1,787		$	1,645
Funded status		$	529	2	$	136	2		$	(149)		$	(160)		$	621		$	440
Consumers
Benefit obligation at beginning of period									$	117		$	109		$	1,158		$	1,120
Service cost									—			—			17			15
Interest cost									2			3			23			31
Plan amendments									—			—			5			—
Actuarial loss (gain)									(3)			12			(30)		1	37		1
Benefits paid									(7)			(7)			(51)			(45)
Benefit obligation at end of period									$	109		$	117		$	1,122		$	1,158
Plan assets at fair value at beginning of period									$	—		$	—		$	1,535		$	1,410
Actual return on plan assets									—			—			182			169
Company contribution									7			7			—			1
Actual benefits paid									(7)			(7)			(49)			(45)
Plan assets at fair value at end of period									$	—		$	—		$	1,668		$	1,535
Funded status									$	(109)		$	(117)		$	546		$	377

1The actuarial gains for 2021 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates. The actuarial loss for 2020 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $510 million at December 31, 2021 and $138 million at December 31, 2020.

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	529		$	136
OPEB Plan		621			440
Current liabilities
DB SERP		10			10
Non-current liabilities
DB SERP		139			150
Consumers
Non-current assets
DB Pension Plans		$	510		$	138
OPEB Plan		546			377
Current liabilities
DB SERP		7			7
Non-current liabilities
DB SERP		102			110

The ABO for the DB Pension Plans was $2.7 billion at December 31, 2021 and $2.9 billion at December 31, 2020. At December 31, 2021 and 2020, the PBO and ABO did not exceed plan assets for any of the defined benefit pension plans.

Items Not Yet Recognized as a Component of Net Periodic Benefit Cost: Presented in the following table are the amounts recognized in regulatory assets, regulatory liabilities, and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets and regulatory liabilities, see Note 2, Regulatory Matters.

In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2021			2020			2021			2020
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss (gain)		94			120			(17)			(10)
Prior service cost (credit)		—			1			(5)			(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	931		$	1,344		$	(76)		$	(8)
Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss		41			47			—			—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	878		$	1,270		$	(54)		$	8

Plan Assets: Presented in the following tables are the fair values of the assets of CMS Energy’s DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy. For additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	DB Pension Plans
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	30		$	30		$	—		$	115		$	115		$	—
U.S. government and agencies securities		209			—			209			150			—			150
Corporate debt		595			—			595			540			—			540
State and municipal bonds		13			—			13			11			—			11
Foreign corporate bonds		66			—			66			41			—			41
Mutual funds		785			785			—			971			971			—
		$	1,698		$	815		$	883		$	1,828		$	1,086		$	742
Pooled funds		1,901									1,574
Total		$	3,599								$	3,402

In Millions
	OPEB Plan
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	21		$	21		$	—		$	33		$	33		$	—
U.S. government and agencies securities		25			—			25			18			—			18
Corporate debt		73			—			73			64			—			64
State and municipal bonds		2			—			2			2			—			2
Foreign corporate bonds		8			—			8			5			—			5
Common stocks		85			85			—			66			66			—
Mutual funds		941			941			—			807			807			—
		$	1,155		$	1,047		$	108		$	995		$	906		$	89
Pooled funds		632									650
Total		$	1,787								$	1,645

Cash and Short-Term Investments: Cash and short-term investments consist of money market funds with daily liquidity.

U.S. Government and Agencies Securities: U.S. government and agencies securities consist of U.S. Treasury notes and other debt securities backed by the U.S. government and related agencies. These securities are valued based on quoted market prices.

Corporate Debt: Corporate debt investments consist of investment grade bonds of U.S. issuers from diverse industries. These securities are valued based on quoted market prices, when available, or yields available on comparable securities of issuers with similar credit ratings.

State and Municipal Bonds: State and municipal bonds are valued using a matrix-pricing model that incorporates Level 2 market-based information. The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported securities trades, broker/dealer quotes, bond ratings, and general information on market movements for investment grade state and municipal securities normally considered by market participants when pricing such debt securities.

Foreign Corporate Bonds: Foreign corporate debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Common Stocks: Common stocks in the OPEB Plan consist of equity securities that are actively managed and tracked to the S&P 500 Index. These securities are valued at their quoted closing prices.

Mutual Funds: Mutual funds represent shares in registered investment companies that are priced based on the daily quoted net asset values that are publicly available and are the basis for transactions to buy or sell shares in the funds.

Pooled Funds: Pooled funds include both common and collective trust funds as well as special funds that contain only employee benefit plan assets from two or more unrelated benefit plans. These funds primarily consist of U.S. and foreign equity securities, but also include U.S. and foreign fixed-income securities and multi-asset investments. Since these investments are valued at their net asset value as a practical expedient, they are not classified in the fair value hierarchy.

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2021:

	DB Pension Plans			OPEB Plan
Equity securities		54.0	%		55.0	%
Fixed-income securities		28.0			28.0
Real asset investments		12.0			12.0
Multi-asset investments		5.0			4.0
Cash and Cash Equivalents		1.0			1.0
		100.0	%		100.0	%

CMS Energy’s target 2021 asset allocation for the assets of the DB Pension Plans was 54 percent equity, 29 percent fixed income, 12 percent real assets, and five percent multi-asset investments.

CMS Energy established union and non‑union VEBA trusts to fund future retiree health and life insurance benefits. These trusts are funded through the ratemaking process for Consumers and through direct contributions from the non‑utility subsidiaries. CMS Energy’s target 2021 asset allocation for the health trusts was 55 percent equity, 30 percent fixed income, 12 percent real assets, and three percent multi-asset investments. CMS Energy’s target asset allocation for the life trusts was 53 percent equity, 32 percent fixed income, and 15 percent multi-asset investments.

The goal of these target allocations was to maximize the long-term return on plan assets, while maintaining a prudent level of risk. The level of acceptable risk is a function of the liabilities of the plans. Equity investments are diversified mostly across the S&P 500 Index, with lesser allocations to the S&P MidCap and SmallCap Indexes and Foreign Equity Funds. Fixed-income investments are diversified across investment grade instruments of government and corporate issuers, as well as high-yield and global bond funds. Real asset investments are diversified across real estate investment trusts, public infrastructure, and public resource equity. Multi-asset investments are global tactical asset allocations.

CMS Energy uses annual liability measurements, quarterly portfolio reviews, and periodic asset/liability studies to evaluate the need for adjustments to the portfolio allocations.

Contributions: Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
DB Pension Plans		$	—		$	700
OPEB Plan		—			1
Consumers
DB Pension Plans		$	—		$	682
OPEB Plan		—			1

Contributions comprise required amounts and discretionary contributions. Neither CMS Energy nor Consumers plans to contribute to the DB Pension Plans or OPEB Plan in 2022. Actual future contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB Pension Plans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

Benefit Payments: Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:

In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2022		$	185		$	10		$	52
2023		181			10			54
2024		178			10			56
2025		180			10			58
2026		178			9			59
2027-2031		876			45			308
Consumers
2022		$	175		$	7		$	49
2023		171			7			52
2024		169			7			54
2025		170			7			55
2026		169			6			56
2027-2031		830			31			294

Collective Bargaining Agreements: At December 31, 2021, unions represented 41 percent of CMS Energy’s employees and 42 percent of Consumers’ employees. The UWUA represents Consumers’ operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. The UWUA and USW agreements expired and new agreements were ratified in 2020. These union contracts expire in 2025.

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

Benefit Plans: CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans. These plans include:

•non‑contributory, qualified DB Pension Plans (closed to new non‑union participants as of July 1, 2003 and closed to new union participants as of September 1, 2005)

•a non‑contributory, qualified DCCP for employees hired on or after July 1, 2003

•benefits to certain management employees under a non‑contributory, nonqualified DB SERP (closed to new participants as of March 31, 2006)

•a non‑contributory, nonqualified DC SERP for certain management employees hired or promoted on or after April 1, 2006

•a contributory, qualified defined contribution 401(k) plan

•health care and life insurance benefits under an OPEB Plan

DB Pension Plans: Participants in the pension plans include present and former employees of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries. Pension plan trust assets are not distinguishable by company. Effective December 31, 2017, CMS Energy’s and Consumers’ then-existing pension plan was amended to include only retired and former employees already covered; this amended plan is referred to as DB Pension Plan B. Also effective December 31, 2017, active employees were moved to a newly created pension plan, referred to as DB Pension Plan A, whose benefits mirror those provided under DB Pension Plan B. Maintaining separate plans for the two groups allows CMS Energy and Consumers to employ a more targeted investment strategy and provides additional opportunities to mitigate risk and volatility.

In November 2021, CMS Energy and Consumers determined that 2021 lump-sum payments to retired employees under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once such settlements meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of October 31, 2021 and recognized a settlement loss of $18 million; $18 million of this amount was recognized by Consumers and deferred as a regulatory asset. At December 31, 2021, CMS Energy, including Consumers, recognized an additional settlement loss of $4 million for the period November 1, 2021 to December 31, 2021; $3 million of this amount was recognized by Consumers and deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

DCCP: CMS Energy and Consumers provide an employer contribution to the DCCP 401(k) plan for employees hired on or after July 1, 2003. The contribution ranges from five percent to ten percent of base pay, depending on years of service and employee class. Employees are not required to contribute in order to receive the plan’s employer contribution. DCCP expense for CMS Energy, including Consumers, was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019. DCCP expense for Consumers was $41 million for the year ended December 31, 2021, $31 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019.

DB SERP: The DB SERP is a nonqualified plan as defined by the Internal Revenue Code. DB SERP benefits are paid from a rabbi trust established in 1988. The trust assets are not considered plan assets under ASC 715. DB SERP rabbi trust earnings are taxable. Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Trust assets		$	142		$	146
ABO		149			159
Contributions		—			8
Consumers
Trust assets		$	104		$	107
ABO		108			115
Contributions		—			5

DC SERP: On April 1, 2006, CMS Energy and Consumers implemented a DC SERP and froze further new participation in the DB SERP. The DC SERP provides participants benefits ranging from five percent to 15 percent of total compensation. The DC SERP requires a minimum of five years of participation before vesting. CMS Energy’s and Consumers’ contributions to the plan, if any, are placed in a grantor trust. For CMS Energy and Consumers, trust assets were $13 million at December 31, 2021 and $11 million at December 31, 2020. DC SERP assets are included in other non‑current assets on CMS Energy’s and Consumers’ consolidated balance sheets. CMS Energy’s and Consumers’ DC SERP expense was $2 million for the years ended December 31, 2021, 2020, and 2019.

401(k) Plan: The 401(k) plan employer match equals 100 percent of eligible contributions up to the first three percent of an employee’s wages and 50 percent of eligible contributions up to the next two percent of an employee’s wages. The total 401(k) plan cost for CMS Energy, including Consumers, was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $28 million for the year ended December 31, 2019. The total 401(k) plan cost for Consumers was $31 million for the year ended December 31, 2021, $29 million for the year ended December 31, 2020, and $27 million for the year ended December 31, 2019.

OPEB Plan: Participants in the OPEB Plan include all regular full-time employees covered by the employee health care plan on the day before retirement from either CMS Energy or Consumers at age 55 or older with at least ten full years of applicable continuous service. Regular full-time employees who qualify for disability retirement under the DB Pension Plans or are disabled and covered by the DCCP and who have 15 years of applicable continuous service may also participate in the OPEB Plan. Retiree health care costs were based on the assumption that costs would increase 6.25 percent in 2022 and 6.50 percent in 2021 for those under 65 and would increase 6.75 percent in 2022 and 7.00 percent in 2021 for those over 65. The rate of increase was assumed to decline to 4.75 percent by 2028 and thereafter for all retirees.

Assumptions: Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31	2021		2020		2019
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	3.02	%	2.73	%	3.37	%
DB Pension Plan B	2.79		2.41		3.17
DB SERP	2.78		2.40		3.15
OPEB Plan	2.99		2.69		3.32
Rate of compensation increase
DB Pension Plan A	3.60		3.70		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	2.83	%	3.44	%	4.55	%
DB SERP	2.84		3.46		4.58
OPEB Plan	3.03		3.57		4.63
Interest cost discount rate2,3
DB Pension Plan A	1.97		2.92		4.08
DB Pension Plan B	1.70		2.74		3.93
DB SERP	1.72		2.74		3.94
OPEB Plan	1.99		2.88		4.03
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		6.75		7.00
OPEB Plan	6.75		6.75		7.00
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2021			2020			2019			2021			2020			2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	53		$	50		$	41		$	18		$	16		$	14
Interest cost		63			83			103			23			33			41
Settlement loss		1			1			—			—			—			—
Expected return on plan assets		(208)			(191)			(162)			(109)			(100)			(88)
Amortization of:
Net loss		100			95			50			8			15			26
Prior service cost (credit)		4			1			1			(53)			(56)			(62)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	41		$	33		$	(113)		$	(92)		$	(69)
Consumers
Net periodic cost (credit)
Service cost		$	51		$	49		$	40		$	17		$	15		$	13
Interest cost		59			78			97			23			31			40
Expected return on plan assets		(197)			(181)			(153)			(102)			(93)			(82)
Amortization of:
Net loss		96			90			47			8			15			26
Prior service cost (credit)		4			1			1			(51)			(54)			(61)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	39		$	32		$	(105)		$	(86)		$	(64)

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Reconciliations: Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2021			2020				2021			2020			2021			2020
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Service cost		53			50				—			—			18			16
Interest cost		60			79				3			4			23			33
Plan amendments		—			24				—			—			5			—
Actuarial loss (gain)		(108)		1	355		1		(4)			16			(32)		1	39		1
Benefits paid		(201)			(215)				(10)			(10)			(53)			(48)
Benefit obligation at end of period		$	3,070		$	3,266			$	149		$	160		$	1,166		$	1,205
Plan assets at fair value at beginning of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Actual return on plan assets		398			371				—			—			194			182
Company contribution		—			700				10			10			—			1
Actual benefits paid		(201)			(215)				(10)			(10)			(52)			(47)
Plan assets at fair value at end of period		$	3,599		$	3,402			$	—		$	—		$	1,787		$	1,645
Funded status		$	529	2	$	136	2		$	(149)		$	(160)		$	621		$	440
Consumers
Benefit obligation at beginning of period									$	117		$	109		$	1,158		$	1,120
Service cost									—			—			17			15
Interest cost									2			3			23			31
Plan amendments									—			—			5			—
Actuarial loss (gain)									(3)			12			(30)		1	37		1
Benefits paid									(7)			(7)			(51)			(45)
Benefit obligation at end of period									$	109		$	117		$	1,122		$	1,158
Plan assets at fair value at beginning of period									$	—		$	—		$	1,535		$	1,410
Actual return on plan assets									—			—			182			169
Company contribution									7			7			—			1
Actual benefits paid									(7)			(7)			(49)			(45)
Plan assets at fair value at end of period									$	—		$	—		$	1,668		$	1,535
Funded status									$	(109)		$	(117)		$	546		$	377

1The actuarial gains for 2021 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates. The actuarial loss for 2020 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $510 million at December 31, 2021 and $138 million at December 31, 2020.

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	529		$	136
OPEB Plan		621			440
Current liabilities
DB SERP		10			10
Non-current liabilities
DB SERP		139			150
Consumers
Non-current assets
DB Pension Plans		$	510		$	138
OPEB Plan		546			377
Current liabilities
DB SERP		7			7
Non-current liabilities
DB SERP		102			110

The ABO for the DB Pension Plans was $2.7 billion at December 31, 2021 and $2.9 billion at December 31, 2020. At December 31, 2021 and 2020, the PBO and ABO did not exceed plan assets for any of the defined benefit pension plans.

Items Not Yet Recognized as a Component of Net Periodic Benefit Cost: Presented in the following table are the amounts recognized in regulatory assets, regulatory liabilities, and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets and regulatory liabilities, see Note 2, Regulatory Matters.

In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2021			2020			2021			2020
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss (gain)		94			120			(17)			(10)
Prior service cost (credit)		—			1			(5)			(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	931		$	1,344		$	(76)		$	(8)
Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss		41			47			—			—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	878		$	1,270		$	(54)		$	8

Plan Assets: Presented in the following tables are the fair values of the assets of CMS Energy’s DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy. For additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	DB Pension Plans
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	30		$	30		$	—		$	115		$	115		$	—
U.S. government and agencies securities		209			—			209			150			—			150
Corporate debt		595			—			595			540			—			540
State and municipal bonds		13			—			13			11			—			11
Foreign corporate bonds		66			—			66			41			—			41
Mutual funds		785			785			—			971			971			—
		$	1,698		$	815		$	883		$	1,828		$	1,086		$	742
Pooled funds		1,901									1,574
Total		$	3,599								$	3,402

In Millions
	OPEB Plan
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	21		$	21		$	—		$	33		$	33		$	—
U.S. government and agencies securities		25			—			25			18			—			18
Corporate debt		73			—			73			64			—			64
State and municipal bonds		2			—			2			2			—			2
Foreign corporate bonds		8			—			8			5			—			5
Common stocks		85			85			—			66			66			—
Mutual funds		941			941			—			807			807			—
		$	1,155		$	1,047		$	108		$	995		$	906		$	89
Pooled funds		632									650
Total		$	1,787								$	1,645

Cash and Short-Term Investments: Cash and short-term investments consist of money market funds with daily liquidity.

U.S. Government and Agencies Securities: U.S. government and agencies securities consist of U.S. Treasury notes and other debt securities backed by the U.S. government and related agencies. These securities are valued based on quoted market prices.

Corporate Debt: Corporate debt investments consist of investment grade bonds of U.S. issuers from diverse industries. These securities are valued based on quoted market prices, when available, or yields available on comparable securities of issuers with similar credit ratings.

State and Municipal Bonds: State and municipal bonds are valued using a matrix-pricing model that incorporates Level 2 market-based information. The fair value of the bonds is derived from various observable inputs, including benchmark yields, reported securities trades, broker/dealer quotes, bond ratings, and general information on market movements for investment grade state and municipal securities normally considered by market participants when pricing such debt securities.

Foreign Corporate Bonds: Foreign corporate debt securities are valued based on quoted market prices, when available, or on yields available on comparable securities of issuers with similar credit ratings.

Common Stocks: Common stocks in the OPEB Plan consist of equity securities that are actively managed and tracked to the S&P 500 Index. These securities are valued at their quoted closing prices.

Mutual Funds: Mutual funds represent shares in registered investment companies that are priced based on the daily quoted net asset values that are publicly available and are the basis for transactions to buy or sell shares in the funds.

Pooled Funds: Pooled funds include both common and collective trust funds as well as special funds that contain only employee benefit plan assets from two or more unrelated benefit plans. These funds primarily consist of U.S. and foreign equity securities, but also include U.S. and foreign fixed-income securities and multi-asset investments. Since these investments are valued at their net asset value as a practical expedient, they are not classified in the fair value hierarchy.

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2021:

	DB Pension Plans			OPEB Plan
Equity securities		54.0	%		55.0	%
Fixed-income securities		28.0			28.0
Real asset investments		12.0			12.0
Multi-asset investments		5.0			4.0
Cash and Cash Equivalents		1.0			1.0
		100.0	%		100.0	%

CMS Energy’s target 2021 asset allocation for the assets of the DB Pension Plans was 54 percent equity, 29 percent fixed income, 12 percent real assets, and five percent multi-asset investments.

CMS Energy established union and non‑union VEBA trusts to fund future retiree health and life insurance benefits. These trusts are funded through the ratemaking process for Consumers and through direct contributions from the non‑utility subsidiaries. CMS Energy’s target 2021 asset allocation for the health trusts was 55 percent equity, 30 percent fixed income, 12 percent real assets, and three percent multi-asset investments. CMS Energy’s target asset allocation for the life trusts was 53 percent equity, 32 percent fixed income, and 15 percent multi-asset investments.

The goal of these target allocations was to maximize the long-term return on plan assets, while maintaining a prudent level of risk. The level of acceptable risk is a function of the liabilities of the plans. Equity investments are diversified mostly across the S&P 500 Index, with lesser allocations to the S&P MidCap and SmallCap Indexes and Foreign Equity Funds. Fixed-income investments are diversified across investment grade instruments of government and corporate issuers, as well as high-yield and global bond funds. Real asset investments are diversified across real estate investment trusts, public infrastructure, and public resource equity. Multi-asset investments are global tactical asset allocations.

CMS Energy uses annual liability measurements, quarterly portfolio reviews, and periodic asset/liability studies to evaluate the need for adjustments to the portfolio allocations.

Contributions: Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
DB Pension Plans		$	—		$	700
OPEB Plan		—			1
Consumers
DB Pension Plans		$	—		$	682
OPEB Plan		—			1

Contributions comprise required amounts and discretionary contributions. Neither CMS Energy nor Consumers plans to contribute to the DB Pension Plans or OPEB Plan in 2022. Actual future contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB Pension Plans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

Benefit Payments: Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:

In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2022		$	185		$	10		$	52
2023		181			10			54
2024		178			10			56
2025		180			10			58
2026		178			9			59
2027-2031		876			45			308
Consumers
2022		$	175		$	7		$	49
2023		171			7			52
2024		169			7			54
2025		170			7			55
2026		169			6			56
2027-2031		830			31			294

Collective Bargaining Agreements: At December 31, 2021, unions represented 41 percent of CMS Energy’s employees and 42 percent of Consumers’ employees. The UWUA represents Consumers’ operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. The UWUA and USW agreements expired and new agreements were ratified in 2020. These union contracts expire in 2025.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock-Based Compensation

Stock-Based Compensation

CMS Energy and Consumers provide a PISP to officers, employees, and non‑employee directors based on their contributions to the successful management of the company. The PISP has a ten-year term, expiring in May 2030.

In 2021, all awards were in the form of restricted stock or restricted stock units. The PISP also allows for unrestricted common stock, stock options, stock appreciation rights, phantom shares, performance units, and incentive options, none of which was granted in 2021, 2020, or 2019.

Shares awarded or subject to stock options, phantom shares, or performance units may not exceed 6.5 million shares from June 2020 through May 2030. CMS Energy and Consumers may issue awards of up to 5,927,297 shares of common stock under the PISP as of December 31, 2021. Shares for which payment or exercise is in cash, as well as shares that expire, terminate, or are canceled or forfeited, may be awarded or granted again under the PISP.

All awards under the PISP vest fully upon death. Upon a change of control of CMS Energy or termination under an officer separation agreement, the awards will vest in accordance with specific officer agreements. If stated in the award, for restricted stock recipients who terminate employment due to retirement or disability, a pro-rata portion of the award will vest upon termination, with any market-based award also contingent upon the outcome of the market condition and any performance-based award contingent upon the outcome of the performance condition. The pro-rata portion is equal to the portion of the service period served between the award grant date and the employee’s termination date. The remaining portion of the awards will be forfeited. All awards for directors vest fully upon retirement. Restricted shares may be forfeited if employment terminates for any other reason or if the minimum service requirements are not met, as described in the award document.

Restricted Stock Awards: Restricted stock awards for employees under the PISP are in the form of performance-based, market-based, and time-lapse restricted stock. Award recipients receive shares of CMS Energy common stock that have dividend and voting rights. The dividends on time-lapse restricted stock are paid in cash or in CMS Energy common stock. The dividends on performance-based and market-based restricted stock are paid in restricted shares equal to the value of the dividends. These additional restricted shares are subject to the same vesting conditions as the underlying restricted stock shares.

Performance-based restricted stock vesting is contingent on meeting at least a 36-month service requirement and a performance condition. The performance condition is based on an adjusted measure of CMS Energy’s EPS growth relative to a peer group over a three-year period. The awards granted in 2021, 2020, and 2019 require a 38-month service period. Market-based restricted stock vesting is generally contingent on meeting a three-year service requirement and a market condition. The market condition is based on a comparison of CMS Energy’s total shareholder return with the median total shareholder return of a peer group over the same three-year period. Depending on the outcome of the performance condition or the market condition, a recipient may earn a total award ranging from zero to 200 percent of the initial grant. Time-lapse restricted stock generally vests after a service period of three years.

Restricted Stock Units: In 2021, 2020, and 2019, CMS Energy and Consumers granted restricted stock units to certain non‑employee directors who elected to defer their restricted stock awards. The restricted stock units generally vest after a service period of one year or, if earlier, at the next annual meeting. The restricted stock units will be distributed to the recipients as shares in accordance with the directors’ deferral agreements. Restricted stock units do not have voting rights, but do have dividend rights. In lieu of cash dividend payments, the dividends on restricted stock units are paid in additional units equal to the value of the dividends. These additional restricted stock units are subject to the same vesting and

distribution conditions as the underlying restricted stock units. No restricted stock units were forfeited during 2021.

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

	CMS Energy, including Consumers				Consumers
Year Ended December 31, 2021	Number of Shares	Weighted-Average Grant Date Fair Value per Share			Number of Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	817,357		$	51.68	781,531		$	51.73
Granted
Restricted stock	547,201		43.52		517,141		42.85
Restricted stock units	13,867		54.11		13,093		53.93
Vested
Restricted stock	(408,011)		29.46		(388,009)		29.55
Restricted stock units	(15,577)		48.15		(14,891)		48.09
Forfeited – restricted stock	(22,264)		57.90		(21,780)		58.01
Nonvested at end of period	932,573		$	56.56	887,085		$	56.19

Year Ended December 31, 2021	CMS Energy, including Consumers	Consumers
Granted
Time-lapse awards	118,290	112,128
Market-based awards	143,843	135,638
Performance-based awards	143,843	135,638
Restricted stock units	11,725	11,035
Dividends on market-based awards	15,661	14,890
Dividends on performance-based awards	15,964	15,175
Dividends on restricted stock units	2,142	2,058
Additional market-based shares based on achievement of condition	59,736	56,505
Additional performance-based shares based on achievement of condition	49,864	47,167
Total granted	561,068	530,234

CMS Energy and Consumers charge the fair value of the restricted stock awards to expense over the required service period and charge the fair value of the restricted stock units to expense immediately. For performance-based awards, CMS Energy and Consumers estimate the number of shares expected to vest at the end of the performance period based on the probable achievement of the performance objective. Performance-based and market-based restricted stock awards have graded vesting features for retirement-eligible employees, and CMS Energy and Consumers recognize expense for those awards on a graded vesting schedule over the required service period. Expense for performance-based and market-based restricted stock awards for non‑retirement-eligible employees and time-lapse awards is recognized on a straight-line basis over the required service period.

The fair value of performance-based and time-lapse restricted stock and restricted stock units is based on the price of CMS Energy’s common stock on the grant date. The fair value of market-based restricted stock awards is calculated on the grant date using a Monte Carlo simulation. CMS Energy and Consumers

base expected volatilities on the historical volatility of the price of CMS Energy common stock. The risk-free rate for valuation of the market-based restricted stock awards was based on the three-year U.S. Treasury yield at the award grant date.

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31	2021		2020		2019
Expected volatility	27.6	%	14.2	%	14.9	%
Expected dividend yield	2.8		2.4		2.8
Risk-free rate	0.2		1.6		2.5

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	43.52		$	45.56		$	43.57
Restricted stock units granted		54.11			49.76			50.35
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	42.85		$	45.53		$	43.57
Restricted stock units granted		53.93			49.70			51.15

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Fair value of shares that vested during the year		$	25		$	22		$	26
Compensation expense recognized		22			11			22
Income tax benefit recognized		1			3			1
Consumers
Fair value of shares that vested during the year		$	24		$	21		$	25
Compensation expense recognized		21			10			21
Income tax benefit recognized		1			3			1

At December 31, 2021, $24.1 million of total unrecognized compensation cost was related to restricted stock for CMS Energy, including Consumers, and $22.9 million of total unrecognized compensation cost was related to restricted stock for Consumers. CMS Energy and Consumers expect to recognize this cost over a weighted-average period of two years.

Consumers Energy Company

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Stock-Based Compensation

Stock-Based Compensation

CMS Energy and Consumers provide a PISP to officers, employees, and non‑employee directors based on their contributions to the successful management of the company. The PISP has a ten-year term, expiring in May 2030.

In 2021, all awards were in the form of restricted stock or restricted stock units. The PISP also allows for unrestricted common stock, stock options, stock appreciation rights, phantom shares, performance units, and incentive options, none of which was granted in 2021, 2020, or 2019.

Shares awarded or subject to stock options, phantom shares, or performance units may not exceed 6.5 million shares from June 2020 through May 2030. CMS Energy and Consumers may issue awards of up to 5,927,297 shares of common stock under the PISP as of December 31, 2021. Shares for which payment or exercise is in cash, as well as shares that expire, terminate, or are canceled or forfeited, may be awarded or granted again under the PISP.

All awards under the PISP vest fully upon death. Upon a change of control of CMS Energy or termination under an officer separation agreement, the awards will vest in accordance with specific officer agreements. If stated in the award, for restricted stock recipients who terminate employment due to retirement or disability, a pro-rata portion of the award will vest upon termination, with any market-based award also contingent upon the outcome of the market condition and any performance-based award contingent upon the outcome of the performance condition. The pro-rata portion is equal to the portion of the service period served between the award grant date and the employee’s termination date. The remaining portion of the awards will be forfeited. All awards for directors vest fully upon retirement. Restricted shares may be forfeited if employment terminates for any other reason or if the minimum service requirements are not met, as described in the award document.

Restricted Stock Awards: Restricted stock awards for employees under the PISP are in the form of performance-based, market-based, and time-lapse restricted stock. Award recipients receive shares of CMS Energy common stock that have dividend and voting rights. The dividends on time-lapse restricted stock are paid in cash or in CMS Energy common stock. The dividends on performance-based and market-based restricted stock are paid in restricted shares equal to the value of the dividends. These additional restricted shares are subject to the same vesting conditions as the underlying restricted stock shares.

Performance-based restricted stock vesting is contingent on meeting at least a 36-month service requirement and a performance condition. The performance condition is based on an adjusted measure of CMS Energy’s EPS growth relative to a peer group over a three-year period. The awards granted in 2021, 2020, and 2019 require a 38-month service period. Market-based restricted stock vesting is generally contingent on meeting a three-year service requirement and a market condition. The market condition is based on a comparison of CMS Energy’s total shareholder return with the median total shareholder return of a peer group over the same three-year period. Depending on the outcome of the performance condition or the market condition, a recipient may earn a total award ranging from zero to 200 percent of the initial grant. Time-lapse restricted stock generally vests after a service period of three years.

Restricted Stock Units: In 2021, 2020, and 2019, CMS Energy and Consumers granted restricted stock units to certain non‑employee directors who elected to defer their restricted stock awards. The restricted stock units generally vest after a service period of one year or, if earlier, at the next annual meeting. The restricted stock units will be distributed to the recipients as shares in accordance with the directors’ deferral agreements. Restricted stock units do not have voting rights, but do have dividend rights. In lieu of cash dividend payments, the dividends on restricted stock units are paid in additional units equal to the value of the dividends. These additional restricted stock units are subject to the same vesting and

distribution conditions as the underlying restricted stock units. No restricted stock units were forfeited during 2021.

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

	CMS Energy, including Consumers				Consumers
Year Ended December 31, 2021	Number of Shares	Weighted-Average Grant Date Fair Value per Share			Number of Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	817,357		$	51.68	781,531		$	51.73
Granted
Restricted stock	547,201		43.52		517,141		42.85
Restricted stock units	13,867		54.11		13,093		53.93
Vested
Restricted stock	(408,011)		29.46		(388,009)		29.55
Restricted stock units	(15,577)		48.15		(14,891)		48.09
Forfeited – restricted stock	(22,264)		57.90		(21,780)		58.01
Nonvested at end of period	932,573		$	56.56	887,085		$	56.19

Year Ended December 31, 2021	CMS Energy, including Consumers	Consumers
Granted
Time-lapse awards	118,290	112,128
Market-based awards	143,843	135,638
Performance-based awards	143,843	135,638
Restricted stock units	11,725	11,035
Dividends on market-based awards	15,661	14,890
Dividends on performance-based awards	15,964	15,175
Dividends on restricted stock units	2,142	2,058
Additional market-based shares based on achievement of condition	59,736	56,505
Additional performance-based shares based on achievement of condition	49,864	47,167
Total granted	561,068	530,234

CMS Energy and Consumers charge the fair value of the restricted stock awards to expense over the required service period and charge the fair value of the restricted stock units to expense immediately. For performance-based awards, CMS Energy and Consumers estimate the number of shares expected to vest at the end of the performance period based on the probable achievement of the performance objective. Performance-based and market-based restricted stock awards have graded vesting features for retirement-eligible employees, and CMS Energy and Consumers recognize expense for those awards on a graded vesting schedule over the required service period. Expense for performance-based and market-based restricted stock awards for non‑retirement-eligible employees and time-lapse awards is recognized on a straight-line basis over the required service period.

The fair value of performance-based and time-lapse restricted stock and restricted stock units is based on the price of CMS Energy’s common stock on the grant date. The fair value of market-based restricted stock awards is calculated on the grant date using a Monte Carlo simulation. CMS Energy and Consumers

base expected volatilities on the historical volatility of the price of CMS Energy common stock. The risk-free rate for valuation of the market-based restricted stock awards was based on the three-year U.S. Treasury yield at the award grant date.

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31	2021		2020		2019
Expected volatility	27.6	%	14.2	%	14.9	%
Expected dividend yield	2.8		2.4		2.8
Risk-free rate	0.2		1.6		2.5

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	43.52		$	45.56		$	43.57
Restricted stock units granted		54.11			49.76			50.35
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	42.85		$	45.53		$	43.57
Restricted stock units granted		53.93			49.70			51.15

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Fair value of shares that vested during the year		$	25		$	22		$	26
Compensation expense recognized		22			11			22
Income tax benefit recognized		1			3			1
Consumers
Fair value of shares that vested during the year		$	24		$	21		$	25
Compensation expense recognized		21			10			21
Income tax benefit recognized		1			3			1

At December 31, 2021, $24.1 million of total unrecognized compensation cost was related to restricted stock for CMS Energy, including Consumers, and $22.9 million of total unrecognized compensation cost was related to restricted stock for Consumers. CMS Energy and Consumers expect to recognize this cost over a weighted-average period of two years.

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Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes [Line Items]

Income Taxes

Income TaxesCMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
Years Ended December 31	2021				2020				2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823			$	809			$	764
Income tax expense at statutory rate		173				170				160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39				44				46
TCJA excess deferred taxes1		(50)				(35)				(31)
Production tax credits		(40)				(28)				(20)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Research and development tax credits, net3		(3)				(11)				(2)
Refund of alternative minimum tax sequestration4		—				(9)				—
Other, net		4				(3)				(9)
Income tax expense		$	95			$	115			$	131
Effective tax rate		11.5		%		14.2		%		17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024			$	989			$	928
Income tax expense at statutory rate		215				208				195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54				47				53
TCJA excess deferred taxes1		(50)				(35)				(31)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Production tax credits		(33)				(19)				(12)
Research and development tax credits, net3		(3)				(11)				(2)
Other, net		1				(4)				(5)
Income tax expense		$	156			$	173			$	185
Effective tax rate		15.2		%		17.5		%		19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24
Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts on CMS Energy’s and Consumers’ consolidated financial statements.

Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041
Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030
General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

CMS Energy has provided a valuation allowance of $2 million for the local tax loss carryforward. CMS Energy and Consumers expect to utilize fully their tax loss and credit carryforwards for which no valuation allowance has been provided. It is reasonably possible that further adjustments will be made to the valuation allowances within one year.

In 2021, the sale of EnerBank to Regions Bank resulted in utilization of most of the federal net operating loss carryforwards. EnerBank is not included in CMS Energy’s Michigan tax filing, therefore state net operating loss carryforwards were not impacted by the sale of EnerBank.

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—
Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—
Balance at end of period		$	34		$	31		$	34

If recognized, all of these uncertain tax benefits would affect CMS Energy’s and Consumers’ annual effective tax rates in future years. A trial is anticipated in 2022 with the Michigan Tax Tribunal related to the methodology of state apportionment for Consumers’ electricity sales to MISO; however, a final conclusion is not anticipated in the next 12 months.

CMS Energy and Consumers recognize accrued interest and penalties, where applicable, as part of income tax expense. CMS Energy, including Consumers, recognized no interest or penalties for each of the years ended December 31, 2021, 2020, or 2019.

The amount of income taxes paid is subject to ongoing audits by federal, state, local, and foreign tax authorities, which can result in proposed assessments. CMS Energy’s federal income tax returns for 2018 and subsequent years remain subject to examination by the IRS. CMS Energy’s Michigan Corporate Income Tax returns for 2013 and subsequent years remain subject to examination by the State of Michigan. CMS Energy’s and Consumers’ estimate of the potential outcome for any uncertain tax issue is highly judgmental. CMS Energy and Consumers believe that their accrued tax liabilities at December 31, 2021 were adequate for all years.

Consumers Energy Company

Income Taxes [Line Items]

Income Taxes

Income TaxesCMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
Years Ended December 31	2021				2020				2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823			$	809			$	764
Income tax expense at statutory rate		173				170				160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39				44				46
TCJA excess deferred taxes1		(50)				(35)				(31)
Production tax credits		(40)				(28)				(20)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Research and development tax credits, net3		(3)				(11)				(2)
Refund of alternative minimum tax sequestration4		—				(9)				—
Other, net		4				(3)				(9)
Income tax expense		$	95			$	115			$	131
Effective tax rate		11.5		%		14.2		%		17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024			$	989			$	928
Income tax expense at statutory rate		215				208				195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54				47				53
TCJA excess deferred taxes1		(50)				(35)				(31)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Production tax credits		(33)				(19)				(12)
Research and development tax credits, net3		(3)				(11)				(2)
Other, net		1				(4)				(5)
Income tax expense		$	156			$	173			$	185
Effective tax rate		15.2		%		17.5		%		19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24
Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Deferred tax assets and liabilities are recognized for the estimated future tax effect of temporary differences between the tax basis of assets or liabilities and the reported amounts on CMS Energy’s and Consumers’ consolidated financial statements.

Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041
Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030
General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

CMS Energy has provided a valuation allowance of $2 million for the local tax loss carryforward. CMS Energy and Consumers expect to utilize fully their tax loss and credit carryforwards for which no valuation allowance has been provided. It is reasonably possible that further adjustments will be made to the valuation allowances within one year.

In 2021, the sale of EnerBank to Regions Bank resulted in utilization of most of the federal net operating loss carryforwards. EnerBank is not included in CMS Energy’s Michigan tax filing, therefore state net operating loss carryforwards were not impacted by the sale of EnerBank.

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—
Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—
Balance at end of period		$	34		$	31		$	34

If recognized, all of these uncertain tax benefits would affect CMS Energy’s and Consumers’ annual effective tax rates in future years. A trial is anticipated in 2022 with the Michigan Tax Tribunal related to the methodology of state apportionment for Consumers’ electricity sales to MISO; however, a final conclusion is not anticipated in the next 12 months.

CMS Energy and Consumers recognize accrued interest and penalties, where applicable, as part of income tax expense. CMS Energy, including Consumers, recognized no interest or penalties for each of the years ended December 31, 2021, 2020, or 2019.

The amount of income taxes paid is subject to ongoing audits by federal, state, local, and foreign tax authorities, which can result in proposed assessments. CMS Energy’s federal income tax returns for 2018 and subsequent years remain subject to examination by the IRS. CMS Energy’s Michigan Corporate Income Tax returns for 2013 and subsequent years remain subject to examination by the State of Michigan. CMS Energy’s and Consumers’ estimate of the potential outcome for any uncertain tax issue is highly judgmental. CMS Energy and Consumers believe that their accrued tax liabilities at December 31, 2021 were adequate for all years.

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Earnings Per Share - CMS Energy

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Earnings Per Share - CMS Energy

Earnings Per Share—CMS Energy

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on income from continuing operations:

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			2019
Income available to common stockholders
Income from continuing operations		$	728		$	694		$	633
Less income (loss) attributable to noncontrolling interests		(23)			(3)			2
Less preferred stock dividends		5			—			—
Income from continuing operations available to common stockholders – basic and diluted		$	746		$	697		$	631
Average common shares outstanding
Weighted-average shares – basic		289.0			285.0			283.0
Add dilutive nonvested stock awards		0.5			0.7			0.7
Add dilutive forward equity sale contracts		—			0.6			0.6
Weighted-average shares – diluted		289.5			286.3			284.3
Income from continuing operations per average common share available to common stockholders
Basic		$	2.58		$	2.45		$	2.23
Diluted		2.58			2.44			2.22

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non‑participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS. The non‑participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non‑participating securities are also forfeited. Accordingly, the non‑participating

awards and stock dividends were included in the computation of diluted EPS, but not in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non‑participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS. For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

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Revenue

12 Months Ended

Dec. 31, 2021

Disaggregation of Revenue [Line Items]

Revenue

RevenuePresented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2019	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,407		$	1,922		$	—		$	6,329
Other		—			—			74			74
Revenue recognized from contracts with customers		$	4,407		$	1,922		$	74		$	6,403
Leasing income		—			—			174			174
Financing income		9			5			—			14
Consumers alternative-revenue programs		23			10			—			33
Total operating revenue – CMS Energy		$	4,439		$	1,937		$	248		$	6,624
Consumers
Consumers utility revenue
Residential		$	1,988		$	1,316					$	3,304
Commercial		1,502			372						1,874
Industrial		669			51						720
Other		248			183						431
Revenue recognized from contracts with customers		$	4,407		$	1,922					$	6,329
Financing income		9			5						14
Alternative-revenue programs		23			10						33
Total operating revenue – Consumers		$	4,439		$	1,937					$	6,376

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $22 million for the year ended December 31, 2021, $33 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $486 million at December 31, 2021 and $437 million at December 31, 2020.

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Revenues to Be Refunded: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. For additional information, see Note 2, Regulatory Matters.

Consumers Energy Company

Disaggregation of Revenue [Line Items]

Revenue

RevenuePresented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2019	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,407		$	1,922		$	—		$	6,329
Other		—			—			74			74
Revenue recognized from contracts with customers		$	4,407		$	1,922		$	74		$	6,403
Leasing income		—			—			174			174
Financing income		9			5			—			14
Consumers alternative-revenue programs		23			10			—			33
Total operating revenue – CMS Energy		$	4,439		$	1,937		$	248		$	6,624
Consumers
Consumers utility revenue
Residential		$	1,988		$	1,316					$	3,304
Commercial		1,502			372						1,874
Industrial		669			51						720
Other		248			183						431
Revenue recognized from contracts with customers		$	4,407		$	1,922					$	6,329
Financing income		9			5						14
Alternative-revenue programs		23			10						33
Total operating revenue – Consumers		$	4,439		$	1,937					$	6,376

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $22 million for the year ended December 31, 2021, $33 million for the year ended December 31, 2020, and $29 million for the year ended December 31, 2019.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable and accrued revenue on CMS Energy’s and Consumers’ consolidated balance sheets, were $486 million at December 31, 2021 and $437 million at December 31, 2020.

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Revenues to Be Refunded: In December 2020, the MPSC issued an order authorizing Consumers to refund $28 million voluntarily to utility customers. For additional information, see Note 2, Regulatory Matters.

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Other Income and Other Expense

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Line Items]

Other Income and Other Expense

Other Income and Other Expense

Other income was not significant for any of the periods presented. Presented in the following table are the components of other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Other expense
Donations		$	(6)		$	(35)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
Loss on reacquired and extinguished debt		—			(16)			—
All other		(7)			(6)			(4)
Total other expense – CMS Energy		$	(18)		$	(62)		$	(13)
Consumers
Other expense
Donations		$	(6)		$	(33)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
All other		(7)			(5)			(4)
Total other expense – Consumers		$	(18)		$	(43)		$	(13)

Consumers Energy Company

Other Income and Expenses [Line Items]

Other Income and Other Expense

Other Income and Other Expense

Other income was not significant for any of the periods presented. Presented in the following table are the components of other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Other expense
Donations		$	(6)		$	(35)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
Loss on reacquired and extinguished debt		—			(16)			—
All other		(7)			(6)			(4)
Total other expense – CMS Energy		$	(18)		$	(62)		$	(13)
Consumers
Other expense
Donations		$	(6)		$	(33)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
All other		(7)			(5)			(4)
Total other expense – Consumers		$	(18)		$	(43)		$	(13)

XML

Cash And Cash Equivalents

12 Months Ended

Dec. 31, 2021

Cash and Cash Equivalents [Line Items]

Cash And Cash Equivalents

Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Current assets held for sale		—			136
Cash and cash equivalents, including restricted amounts – CMS Energy		$	476		$	185
Consumers
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Cash and cash equivalents, including restricted amounts – Consumers		$	44		$	35

Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

Current Assets Held for Sale: On October 1, 2021, EnerBank was acquired by Regions Bank. EnerBank’s cash and cash equivalents are presented as assets held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Consumers Energy Company

Cash and Cash Equivalents [Line Items]

Cash And Cash Equivalents

Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Current assets held for sale		—			136
Cash and cash equivalents, including restricted amounts – CMS Energy		$	476		$	185
Consumers
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Cash and cash equivalents, including restricted amounts – Consumers		$	44		$	35

Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

Current Assets Held for Sale: On October 1, 2021, EnerBank was acquired by Regions Bank. EnerBank’s cash and cash equivalents are presented as assets held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

XML

Reportable Segments

12 Months Ended

Dec. 31, 2021

Segment Reporting Information [Line Items]

Reportable Segments

Reportable SegmentsReportable segments consist of business units defined by the products and services they offer. CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

Accounting policies for CMS Energy’s and Consumers’ segments are as described in Note 1, Significant Accounting Policies. The consolidated financial statements reflect the assets, liabilities, revenues, and expenses of the individual segments when appropriate. Accounts are allocated among the segments when common accounts are attributable to more than one segment. The allocations are based on certain measures of business activities, such as revenue, labor dollars, customers, other operating and maintenance expense, construction expense, leased property, taxes, or functional surveys. For example, customer receivables are allocated based on revenue, and pension provisions are allocated based on labor dollars.

Inter-segment sales and transfers are accounted for at current market prices and are eliminated in consolidated net income available to common stockholders by segment. Inter-segment sales and transfers were immaterial for all periods presented.

CMS Energy

The segments reported for CMS Energy are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

•enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

On October 1, 2021, EnerBank was acquired by Regions Bank. As a result, EnerBank is no longer included in the composition of CMS Energy’s reportable segments. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

CMS Energy presents corporate interest and other expenses, discontinued operations, and Consumers’ other consolidated entities within other reconciling items. Beginning in 2021, CMS Land, which holds the environmental remediation obligations at Bay Harbor, will be included within other reconciling items rather than within the enterprises segment. This change was not material and was made to align segment reporting with the legal organization and internal reporting of CMS Energy.

Consumers

The segments reported for Consumers are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by segment:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Enterprises		308			229			248
Total operating revenue – CMS Energy		$	7,329		$	6,418		$	6,624
Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Total operating revenue – Consumers		$	7,021		$	6,189		$	6,376
CMS Energy, including Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Enterprises		37			20			14
Other reconciling items		1			1			1
Total depreciation and amortization – CMS Energy		$	1,114		$	1,043		$	989
Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Other reconciling items		1			1			1
Total depreciation and amortization – Consumers		$	1,077		$	1,023		$	975

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Income from equity method investees1
Enterprises		$	10		$	5		$	10
Total income from equity method investees – CMS Energy		$	10		$	5		$	10
CMS Energy, including Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Enterprises		6			7			7
Other reconciling items		183			179			157
Total interest charges – CMS Energy		$	500		$	505		$	460
Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Other reconciling items		—			1			1
Total interest charges – Consumers		$	311		$	320		$	297
CMS Energy, including Consumers
Income tax expense (benefit)
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Enterprises		(2)			(4)			2
Other reconciling items		(59)			(54)			(56)
Total income tax expense – CMS Energy		$	95		$	115		$	131
Consumers
Income tax expense
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Total income tax expense – Consumers		$	156		$	173		$	185

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Enterprises		23			36			33
Other reconciling items		458			(96)			(95)
Total net income available to common stockholders – CMS Energy		$	1,348		$	755		$	680
Consumers
Net income (loss) available to common stockholder
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Other reconciling items		(1)			(1)			(1)
Total net income available to common stockholder – Consumers		$	866		$	814		$	741
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Enterprises		1,122			1,113			405
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – CMS Energy		$	29,893		$	27,870		$	25,368
Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – Consumers		$	28,771		$	26,757		$	24,963
CMS Energy, including Consumers
Investments in equity method investees1
Enterprises		$	71		$	70		$	71
Total investments in equity method investees – CMS Energy		$	71		$	70		$	71

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Total assets
Electric utility2		$	16,493		$	15,829		$	14,911
Gas utility2		10,517			9,429			8,659
Enterprises		1,312			1,276			527
Other reconciling items		431			3,132			2,740
Total assets – CMS Energy		$	28,753		$	29,666		$	26,837
Consumers
Total assets
Electric utility2		$	16,555		$	15,893		$	14,973
Gas utility2		10,564			9,477			8,706
Other reconciling items		21			29			20
Total assets – Consumers		$	27,140		$	25,399		$	23,699
CMS Energy, including Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Enterprises		17			108			5
Other reconciling items		2			1			1
Total capital expenditures – CMS Energy		$	2,161		$	2,275		$	2,139
Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Other reconciling items		2			1			1
Total capital expenditures – Consumers		$	2,144		$	2,167		$	2,134

1Consumers had no significant equity method investments.

2Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

3Amounts include assets placed under finance lease.

4Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Consumers Energy Company

Segment Reporting Information [Line Items]

Reportable Segments

Reportable SegmentsReportable segments consist of business units defined by the products and services they offer. CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

Accounting policies for CMS Energy’s and Consumers’ segments are as described in Note 1, Significant Accounting Policies. The consolidated financial statements reflect the assets, liabilities, revenues, and expenses of the individual segments when appropriate. Accounts are allocated among the segments when common accounts are attributable to more than one segment. The allocations are based on certain measures of business activities, such as revenue, labor dollars, customers, other operating and maintenance expense, construction expense, leased property, taxes, or functional surveys. For example, customer receivables are allocated based on revenue, and pension provisions are allocated based on labor dollars.

Inter-segment sales and transfers are accounted for at current market prices and are eliminated in consolidated net income available to common stockholders by segment. Inter-segment sales and transfers were immaterial for all periods presented.

CMS Energy

The segments reported for CMS Energy are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

•enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

On October 1, 2021, EnerBank was acquired by Regions Bank. As a result, EnerBank is no longer included in the composition of CMS Energy’s reportable segments. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

CMS Energy presents corporate interest and other expenses, discontinued operations, and Consumers’ other consolidated entities within other reconciling items. Beginning in 2021, CMS Land, which holds the environmental remediation obligations at Bay Harbor, will be included within other reconciling items rather than within the enterprises segment. This change was not material and was made to align segment reporting with the legal organization and internal reporting of CMS Energy.

Consumers

The segments reported for Consumers are:

•electric utility, consisting of regulated activities associated with the generation, purchase, distribution, and sale of electricity in Michigan

•gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by segment:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Enterprises		308			229			248
Total operating revenue – CMS Energy		$	7,329		$	6,418		$	6,624
Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Total operating revenue – Consumers		$	7,021		$	6,189		$	6,376
CMS Energy, including Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Enterprises		37			20			14
Other reconciling items		1			1			1
Total depreciation and amortization – CMS Energy		$	1,114		$	1,043		$	989
Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Other reconciling items		1			1			1
Total depreciation and amortization – Consumers		$	1,077		$	1,023		$	975

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Income from equity method investees1
Enterprises		$	10		$	5		$	10
Total income from equity method investees – CMS Energy		$	10		$	5		$	10
CMS Energy, including Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Enterprises		6			7			7
Other reconciling items		183			179			157
Total interest charges – CMS Energy		$	500		$	505		$	460
Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Other reconciling items		—			1			1
Total interest charges – Consumers		$	311		$	320		$	297
CMS Energy, including Consumers
Income tax expense (benefit)
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Enterprises		(2)			(4)			2
Other reconciling items		(59)			(54)			(56)
Total income tax expense – CMS Energy		$	95		$	115		$	131
Consumers
Income tax expense
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Total income tax expense – Consumers		$	156		$	173		$	185

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Enterprises		23			36			33
Other reconciling items		458			(96)			(95)
Total net income available to common stockholders – CMS Energy		$	1,348		$	755		$	680
Consumers
Net income (loss) available to common stockholder
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Other reconciling items		(1)			(1)			(1)
Total net income available to common stockholder – Consumers		$	866		$	814		$	741
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Enterprises		1,122			1,113			405
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – CMS Energy		$	29,893		$	27,870		$	25,368
Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – Consumers		$	28,771		$	26,757		$	24,963
CMS Energy, including Consumers
Investments in equity method investees1
Enterprises		$	71		$	70		$	71
Total investments in equity method investees – CMS Energy		$	71		$	70		$	71

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Total assets
Electric utility2		$	16,493		$	15,829		$	14,911
Gas utility2		10,517			9,429			8,659
Enterprises		1,312			1,276			527
Other reconciling items		431			3,132			2,740
Total assets – CMS Energy		$	28,753		$	29,666		$	26,837
Consumers
Total assets
Electric utility2		$	16,555		$	15,893		$	14,973
Gas utility2		10,564			9,477			8,706
Other reconciling items		21			29			20
Total assets – Consumers		$	27,140		$	25,399		$	23,699
CMS Energy, including Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Enterprises		17			108			5
Other reconciling items		2			1			1
Total capital expenditures – CMS Energy		$	2,161		$	2,275		$	2,139
Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Other reconciling items		2			1			1
Total capital expenditures – Consumers		$	2,144		$	2,167		$	2,134

1Consumers had no significant equity method investments.

2Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

3Amounts include assets placed under finance lease.

4Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

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Related Party Transactions - Consumers

12 Months Ended

Dec. 31, 2021

Consumers Energy Company

Related Party Transaction [Line Items]

Related Party Transactions - Consumers

Related-Party Transactions—Consumers

Consumers enters into a number of transactions with related parties in the normal course of business. These transactions include but are not limited to:

•purchases of electricity from affiliates of CMS Enterprises

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

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	2021			2020			2019
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	77		$	64		$	75

Amounts payable to related parties for purchased power and other services were $22 million at December 31, 2021 and $13 million at December 31, 2020. Accounts receivable from related parties were $7 million at December 31, 2021 and $16 million at December 31, 2020.

CMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.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, 2021 and 2020.

Consumers has a natural gas transportation agreement with a subsidiary of CMS Energy that extends through 2038, related to a pipeline owned by Consumers. For additional details about the agreement, see Note 8, Leases and Palisades Financing.

In June 2021, Consumers entered into an agreement with DIG, CMS Generation Michigan Power, and CMS ERM to purchase the enterprises segment’s three natural gas-fueled generating units, totaling 1,001 MW of nameplate capacity for $515 million, subject to certain adjustments. The parties plan to close the sale, which is dependent upon regulatory approvals, in 2025.

In December 2021, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million. For additional details about the agreement, see Note 4, Financings and Capitalization

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Variable Interest Entities

12 Months Ended

Dec. 31, 2021

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest EntitiesCMS Enterprises has a 51-percent ownership interest in Aviator Wind Equity Holdings, which holds a Class B membership interest in Aviator Wind, a 525-MW wind generation project in Coke County, Texas. The Class A membership interest in Aviator Wind is held by a tax equity investor, BHE Renewables, LLC, a subsidiary of Berkshire Hathaway Energy Company. Earnings, tax attributes, and cash flows generated by Aviator Wind are allocated among and distributed to the membership classes in accordance with the ratios specified in the associated limited liability company operating agreement;

these ratios change over time and are not representative of the ownership interest percentages of each membership class.

Aviator Wind Equity Holdings and Aviator Wind represent VIEs. In accordance with the associated limited liability company operating agreement, the tax equity investor is guaranteed preferred returns from Aviator Wind. However, CMS Enterprises manages and controls the operating activities of Aviator Wind Equity Holdings and, ultimately, Aviator Wind. As a result, CMS Enterprises is the primary beneficiary of Aviator Wind Equity Holdings and Aviator Wind, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies. CMS Enterprises consolidates Aviator Wind Equity Holdings and Aviator Wind and presents the Class A membership interest and 49 percent of the Class B membership interest in Aviator Wind as noncontrolling interests.

Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:

In Millions
December 31	2021			2020
Current
Cash and cash equivalents		$	20		$	7
Accounts receivable		3			5
Prepayments and other current assets		1			1
Non-current
Plant, property, and equipment, net		671			692
Total assets1		$	695		$	705
Current
Accounts payable		$	15		$	3
Non-current
Asset retirement obligations		20			19
Total liabilities		$	35		$	22

1Assets may be used only to meet VIEs’ obligations and commitments.

CMS Enterprises is obligated under certain indemnities that protect the tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. For additional details on these indemnity obligations, see Note 3, Contingencies and Commitments—Guarantees.

Since Aviator Wind’s income and cash flows are not distributed among its investors based on ownership interest percentages, CMS Enterprises allocates Aviator Wind’s income (loss) among its investors by applying the hypothetical liquidation at book value method. This method calculates each investor’s earnings based on a hypothetical liquidation of Aviator Wind at the net book value of its underlying net assets as of the balance sheet date. The liquidation tax gain (loss) is allocated to each investor’s capital account, resulting in income (loss) equal to the period change in the investor’s capital account balance. CMS Enterprises then receives 51 percent of the earnings, tax attributes, and cash flows that were allocated to Aviator Wind Equity Holdings.Other VIEs: CMS Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While CMS Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability

to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships.

Presented in the following table is information about these partnerships:

Name	Nature of the Entity	Nature of CMS Energy’s Involvement
T.E.S. Filer City	Coal-fueled power generator	Long-term PPA between partnership and Consumers
		Employee assignment agreement
Grayling	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Genesee	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Craven	Wood waste-fueled power generator	Operating and management contract

1Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers.

The creditors of these partnerships do not have recourse to the general credit of CMS Energy or Consumers. CMS Energy and Consumers have not provided any financial or other support during the periods presented that was not previously contractually required.

CMS Energy’s investment in these partnerships is included in investments on its consolidated balance sheets in the amount of $71 million at December 31, 2021 and $70 million at December 31, 2020.

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Exit Activities and Discontinued Operations

12 Months Ended

Dec. 31, 2021

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Exit Activities and Discontinued Operations

Exit Activities and Discontinued OperationsExit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC.

As of December 31, 2021, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $7 million has been deferred as a regulatory asset. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
Years Ended December 31	2021			2020
Retention benefit liability at beginning of period		$	11		$	4
Costs incurred and charged to maintenance and other operating expenses		—			13
Costs deferred as a regulatory asset		7			—
Costs incurred and capitalized		1			2
Costs paid or settled		(5)			(8)
Retention benefit liability at the end of the period1		$	14		$	11

1Includes current portion of other liabilities of $5 million at December 31, 2021 and $3 million at December 31, 2020.

Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million. CMS Energy intends to use the proceeds from the sale to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation.

In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believes is inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment will be submitted to a mutually agreed upon independent accounting firm for final determination. While CMS Energy does not believe material loss is probable, it cannot predict the outcome of this matter.

EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020.

The table below presents the financial results of EnerBank included in income from discontinued operations:

In Millions
Years Ended December 31	2021			2020			2019
Operating revenue		$	209		$	262		$	221
Expenses
Operating expenses		60			130			97
Interest expense		34			56			59
Income before income taxes		$	115		$	76		$	65
Gain on sale		657			—			—
Income from discontinued operations before income taxes		$	772		$	76		$	65
Income tax expense		170			18			16
Income from discontinued operations, net of tax		$	602		$	58		$	49

The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:

In Millions
December 31	2020
Assets
Current
Cash and cash equivalents		$	136
Accounts receivable and other current assets		18
Notes receivable, less allowance of $32		275
Total current assets		$	429
Non‑current
Plant, property, and equipment, net		$	22
Notes receivable, less allowance of $91		2,612
Other non‑current assets		46
Total non‑current assets		$	2,680
Total assets		$	3,109
Liabilities
Current
Current portion of long-term debt		$	915
Accounts payable and other current liabilities		38
Total current liabilities		$	953
Non‑current
Long-term debt		$	1,890
Other non‑current liabilities		4
Total non‑current liabilities		$	1,894
Total liabilities		$	2,847

Consumers Energy Company

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Exit Activities and Discontinued Operations

Exit Activities and Discontinued OperationsExit Activities: Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn coal-fueled electric generating units in 2023. In 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. In its order in Consumers’ 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs; Consumers began deferring these costs as a regulatory asset in 2021. Within its 2021 IRP, Consumers proposes to retire the J.H. Campbell coal-fueled generating units. No retention incentive costs related to this retirement will be recognized unless Consumers’ 2021 IRP is approved by the MPSC.

As of December 31, 2021, the cumulative cost incurred and charged to expense related to the D.E. Karn retention incentive program was $16 million. Additionally, an amount of $4 million has been capitalized as a cost of plant, property, and equipment and an amount of $7 million has been deferred as a regulatory asset. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
Years Ended December 31	2021			2020
Retention benefit liability at beginning of period		$	11		$	4
Costs incurred and charged to maintenance and other operating expenses		—			13
Costs deferred as a regulatory asset		7			—
Costs incurred and capitalized		1			2
Costs paid or settled		(5)			(8)
Retention benefit liability at the end of the period1		$	14		$	11

1Includes current portion of other liabilities of $5 million at December 31, 2021 and $3 million at December 31, 2020.

Discontinued Operations: On October 1, 2021, EnerBank was acquired by Regions Bank. CMS Energy received proceeds of over $1 billion from the transaction and recognized a pre-tax gain of $657 million. CMS Energy intends to use the proceeds from the sale to fund key initiatives in its core energy business related to safety, reliability, and its clean energy transformation.

In December 2021, CMS Energy submitted a notice of disagreement to Regions Bank relating to a $36 million negative post-closing purchase price adjustment that it believes is inconsistent with the merger agreement. In accordance with the merger agreement, the disputed adjustment will be submitted to a mutually agreed upon independent accounting firm for final determination. While CMS Energy does not believe material loss is probable, it cannot predict the outcome of this matter.

EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheet at December 31, 2020.

The table below presents the financial results of EnerBank included in income from discontinued operations:

In Millions
Years Ended December 31	2021			2020			2019
Operating revenue		$	209		$	262		$	221
Expenses
Operating expenses		60			130			97
Interest expense		34			56			59
Income before income taxes		$	115		$	76		$	65
Gain on sale		657			—			—
Income from discontinued operations before income taxes		$	772		$	76		$	65
Income tax expense		170			18			16
Income from discontinued operations, net of tax		$	602		$	58		$	49

The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:

In Millions
December 31	2020
Assets
Current
Cash and cash equivalents		$	136
Accounts receivable and other current assets		18
Notes receivable, less allowance of $32		275
Total current assets		$	429
Non‑current
Plant, property, and equipment, net		$	22
Notes receivable, less allowance of $91		2,612
Other non‑current assets		46
Total non‑current assets		$	2,680
Total assets		$	3,109
Liabilities
Current
Current portion of long-term debt		$	915
Accounts payable and other current liabilities		38
Total current liabilities		$	953
Non‑current
Long-term debt		$	1,890
Other non‑current liabilities		4
Total non‑current liabilities		$	1,894
Total liabilities		$	2,847

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Quarterly Financial And Common Stock Information (Unaudited)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Data [Abstract]

Quarterly Financial and Common Stock Information (Unaudited)

Quarterly Financial and Common Stock Information (Unaudited)

Presented in the table below are CMS Energy’s quarterly financial and common stock information. CMS Energy has reclassified certain prior period amounts to conform to the presentation in the present period. The most significant reclassification is related to the sale of EnerBank to Regions Bank. EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021 and 2020.

In Millions, Except Per Share Amounts
	2021
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	2,013		$	1,558		$	1,725		$	2,033
Operating income		430			252			260			204
Income From Continuing Operations		308			153			153			114
Income From Discontinued Operations, Net of Tax		34			18			30			520
Net income		342			171			183			634
Loss attributable to noncontrolling interests		(7)			(5)			(6)			(5)
Net Income Attributable to CMS Energy		349			176			189			639
Preferred Stock Dividends		—			—			3			2
Net income available to common stockholders		349			176			186			637
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Basic earnings per average common share1		1.21			0.61			0.64			2.20
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Diluted earnings per average common share1		1.21			0.61			0.64			2.20

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

In Millions, Except Per Share Amounts
	2020
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	1,802		$	1,382		$	1,507		$	1,727
Operating income		335			248			340			307
Income From Continuing Operations		229			129			198			138
Income From Discontinued Operations, Net of Tax		14			8			12			24
Net income		243			137			210			162
Income (loss) attributable to noncontrolling interests		—			1			(8)			4
Net income available to common stockholders		243			136			218			158
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.81			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Basic earnings per average common share1		0.86			0.48			0.76			0.55
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.80			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Diluted earnings per average common share1		0.85			0.48			0.76			0.55

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

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Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2021

Condensed Financial Information Disclosure [Abstract]

Schedule I - Condensed Financial Information of Registrant

Condensed Statements of Income

In Millions
Years Ended December 31	2021			2020			2019
Operating Expenses
Other operating expenses		$	(7)		$	(6)		$	(38)
Total operating expenses		(7)			(6)			(38)
Operating Loss		(7)			(6)			(38)
Other Income (Expense)
Equity earnings of subsidiaries		1,482			909			826
Nonoperating retirement benefits, net		(1)			(1)			(1)
Interest income		1			1			1
Other income		1			1			1
Other expense		—			(19)			—
Total other income		1,483			891			827
Interest Charges
Interest on long-term debt		183			178			156
Intercompany interest expense and other		7			7			10
Total interest charges		190			185			166
Income Before Income Taxes		1,286			700			623
Income Tax Benefit		(60)			(55)			(57)
Income From Continuing Operations		1,346			755			680
Income From Discontinued Operations, Net of Tax of $(5), $—, and $—		7			—			—
Net Income Attributable to CMS Energy		1,353			755			680
Preferred Stock Dividends		5			—			—
Net Income Available to Common Stockholders		$	1,348		$	755		$	680

The accompanying notes are an integral part of these statements.

(Continued)

CMS Energy—Parent Company

Condensed Statements of Cash Flows

In Millions
Years Ended December 31	2021			2020			2019
Cash Flows from Operating Activities
Net cash provided by operating activities		$	1,549		$	507		$	697
Cash Flows from Investing Activities
Investment in subsidiaries		(581)			(657)			(683)
Increase in notes receivable – intercompany		(83)			(307)			—
Net cash used in investing activities		(664)			(964)			(683)
Cash Flows from Financing Activities
Proceeds from issuance of debt		—			1,225			1,158
Issuance of common stock		26			253			12
Issuance of preferred stock		224			—			—
Retirement of long-term debt		(200)			(425)			(738)
Debt prepayment costs		—			(16)			—
Payment of dividends on common and preferred stock		(507)			(465)			(434)
Debt issuance costs and financing fees		(10)			(10)			(18)
Change in notes payable – intercompany		(28)			(105)			6
Net cash provided by (used in) financing activities		(495)			457			(14)
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts		390			—			—
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period		—			—			—
Cash and Cash Equivalents, Including Restricted Amounts, End of Period		$	390		$	—		$	—

The accompanying notes are an integral part of these statements.

(Continued)

CMS Energy—Parent Company

Condensed Balance Sheets

ASSETS
In Millions
December 31	2021			2020
Current Assets
Cash and cash equivalents		$	390		$	—
Notes and accrued interest receivable – intercompany		463			358
Accounts receivable – intercompany and related parties		5			3
Accrued taxes		—			48
Prepayments and other current assets		1			1
Total current assets		859			410
Other Non‑current Assets
Deferred income taxes		147			91
Investments in subsidiaries		9,870			9,372
Other investments		6			5
Other		8			5
Total other non‑current assets		10,031			9,473
Total Assets		$	10,890		$	9,883

LIABILITIES AND EQUITY
In Millions
December 31	2021			2020
Current Liabilities
Current portion of long-term debt		$	—		$	200
Accounts and notes payable – intercompany		61			69
Accrued interest, including intercompany		33			33
Accrued taxes		83			—
Other current liabilities		8			9
Total current liabilities		185			311
Non‑current Liabilities
Long-term debt		3,928			3,926
Notes payable – intercompany		112			116
Postretirement benefits		19			21
Other non‑current liabilities		15			13
Total non‑current liabilities		4,074			4,076
Equity
Common stockholders’ equity		6,407			5,496
Preferred stock		224			—
Total equity		6,631			5,496
Total Liabilities and Equity		$	10,890		$	9,883

The accompanying notes are an integral part of these statements.

Basis of PresentationCMS Energy’s condensed financial statements have been prepared on a parent-only basis. In accordance with Rule 12-04 of Regulation S-X, these parent-only financial statements do not include all of the information and notes required by GAAP for annual financial statements, and therefore these parent-only financial statements and other information included should be read in conjunction with CMS Energy’s audited consolidated financial statements contained within Item 8. Financial Statements and Supplementary Data.Guarantees

CMS Energy has issued guarantees with a maximum potential obligation of $633 million on behalf of some of its wholly owned subsidiaries and related parties. CMS Energy’s maximum potential obligation consists primarily of potential payments:

•to third parties under certain commodity purchase and swap agreements entered into with CMS ERM

•to third parties under certain agreements entered into with Grand River Wind, LLC, a wholly owned subsidiary of CMS Enterprises

•to EGLE on behalf of CMS Land and CMS Capital, for environmental remediation obligations at Bay Harbor

•to the U.S. Department of Energy on behalf of Consumers, in connection with Consumers’ 2011 settlement agreement with the U.S. Department of Energy regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers

•to a tax equity investor under certain agreements in connection with the purchase of a VIE

•to Regions Bank related to the sale of EnerBank

The expiry dates of these guarantees vary, depending upon contractual provisions or upon the statute of limitations under the relevant governing law.

Note Payable—IntercompanyCMS Energy has a demand note payable to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028. This note payable is not recorded at fair value; however, its carrying value approximates fair value at December 31, 2021. This fair value measurement is classified in Level 3 within the fair value hierarchy.Preferred Stock

In 2021, CMS Energy issued 9.2 million depositary shares, each representing a 1/1,000th interest in a share of its cumulative Series C preferred stock, traded on the New York Stock Exchange under the symbol CMS PRC, at a price of $25.00 per depositary share. The transaction resulted in net proceeds of $224 million, which was used for general corporate purposes. Dividends on the preferred stock accumulate at an annual rate of 4.200 percent and are payable quarterly.

The Series C preferred stock has no maturity or mandatory redemption date and is not redeemable at the option of the holders. CMS Energy may, at its option, redeem the Series C preferred stock, in whole or in part, at a price equal to $25,000 per share (equivalent to $25.00 per depositary share), plus accumulated and unpaid dividends, at any time on or after July 15, 2026. The Series C preferred stock ranks senior to CMS Energy’s common stock with respect to dividend rights and distribution rights upon liquidation.

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Schedule II - Valuation and Qualifying Accounts and Reserves

12 Months Ended

Dec. 31, 2021

SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]

Schedule II - Valuation and Qualifying Accounts and Reserves

CMS Energy Corporation

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20
Deferred tax valuation allowance
2021		$	1		$	1		$	—		$	—		$	2
2020		2			—			—			1			1
2019		8			—			—			6			2

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

Consumers Energy Company

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

Consumers Energy Company

SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]

Schedule II - Valuation and Qualifying Accounts and Reserves

CMS Energy Corporation

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20
Deferred tax valuation allowance
2021		$	1		$	1		$	—		$	—		$	2
2020		2			—			—			1			1
2019		8			—			—			6			2

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

Consumers Energy Company

Years Ended December 31, 2021, 2020, and 2019

In Millions
Description	Balance at Beginning of Period			Charged to Expense			Charged to Other Accounts			Deductions			Balance at End of Period
Allowance for uncollectible accounts1
2021		$	29		$	22		$	—		$	31		$	20
2020		20			33			—			24			29
2019		20			29			—			29			20

1Deductions represent write-offs of uncollectible accounts, net of recoveries.

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Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2021

Significant Accounting Policies [Line Items]

Principles of Consolidation

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, CMS Enterprises, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Contingencies

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

•they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas)

•they qualify for the normal purchases and sales exception

•they cannot be net settled due in part to the absence of an active market for the commodity

Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives.

Additionally, CMS Energy uses interest rate swaps to manage its interest rate risk on certain long-term debt transactions.

CMS Energy and Consumers record derivative contracts that do not qualify for the normal purchases and sales exception at fair value on their consolidated balance sheets. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

EPS

EPS: CMS Energy calculates basic and diluted EPS using the weighted-average number of shares of common stock and dilutive potential common stock outstanding during the period. Potential common stock, for purposes of determining diluted EPS, includes the effects of nonvested stock awards and forward equity sales. CMS Energy computes the effect on potential common stock using the treasury stock method. Diluted EPS excludes the impact of antidilutive securities, which are those securities resulting in an increase in EPS or a decrease in loss per share. For EPS computations, see Note 13, Earnings Per Share—CMS Energy.

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non‑participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS. The non‑participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non‑participating securities are also forfeited. Accordingly, the non‑participating

awards and stock dividends were included in the computation of diluted EPS, but not in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non‑participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS. For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

Impairment of Equity Method Investments

CMS Energy also assesses equity method investments for impairment whenever there has been a decline in value that is other than temporary. This assessment requires CMS Energy to determine the fair value of the equity method investment. CMS Energy determines fair value using valuation methodologies, including discounted cash flows, and assesses the ability of the investee to sustain an earnings capacity that justifies the carrying amount of the investment. CMS Energy records an impairment if the fair value is less than the carrying amount and the decline in value is considered to be other than temporary.

Investment Tax Credits

Investment Tax Credits: Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment. CMS Energy’s non‑regulated businesses use the deferral method of accounting for investment tax credits. Under the deferral method, the book basis of the associated assets is reduced by the amount of the credit, resulting in lower depreciation expense over the life of the assets. Furthermore, the tax basis of the assets is reduced by 50 percent of the related credit, resulting in a net deferred tax asset. CMS Energy recognizes the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.

Inventory - Gas and Coal

Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

Inventory - RECs and Emission Allowances

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and emission allowances are used to satisfy compliance obligations related to the generation of power. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

Inventory - Impairment

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions

MISO Transactions: MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

Property Taxes

Property Taxes: Property taxes are based on the taxable value of Consumers’ real and personal property assessed by local taxing authorities. Consumers records property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Reclassifications

Reclassifications: CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the present period. The most significant of these reclassifications is related to CMS Energy’s sale of EnerBank to Regions Bank in October 2021. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. Additionally, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Renewable Energy Grant

Renewable Energy Grant: In 2013, Consumers received a renewable energy cash grant for Lake Winds® Energy Park under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Upon receipt of the grant, Consumers recorded a regulatory liability, which Consumers is amortizing over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income. Consumers recorded the deferred income taxes related to the grant as a reduction of the book basis of Lake Winds® Energy Park.

Capitalization

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

Plant Retirement and Abandonment

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

AFUDC

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects, except pollution control facilities on its fossil-fuel-fired power plants. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset.

Planned Major Maintenance Activities

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Lessee

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life. CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Retirement Benefits - Pension

The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Retirement Benefits - Nonpension

The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Income taxes

CMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Accounts Receivable

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

Cash and Cash Equivalents

Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

Consolidation, Variable Interest Entity

Aviator Wind Equity Holdings and Aviator Wind represent VIEs. In accordance with the associated limited liability company operating agreement, the tax equity investor is guaranteed preferred returns from Aviator Wind. However, CMS Enterprises manages and controls the operating activities of Aviator Wind Equity Holdings and, ultimately, Aviator Wind. As a result, CMS Enterprises is the primary beneficiary of Aviator Wind Equity Holdings and Aviator Wind, as it has the power to direct the activities that most significantly impact the economic performance of the companies, as well as the obligation to absorb losses or the right to receive benefits from the companies.CMS Energy has variable interests in T.E.S. Filer City, Grayling, Genesee, and Craven. While CMS Energy owns 50 percent of each partnership, it is not the primary beneficiary of any of these partnerships because decision making is shared among unrelated parties, and no one party has the ability to direct the activities that most significantly impact the entities’ economic performance, such as operations and maintenance, plant dispatch, and fuel strategy. The partners must agree on all major decisions for each of the partnerships.

Consumers Energy Company

Significant Accounting Policies [Line Items]

Principles of Consolidation

Principles of Consolidation: CMS Energy and Consumers prepare their consolidated financial statements in conformity with GAAP. CMS Energy’s consolidated financial statements comprise CMS Energy, Consumers, CMS Enterprises, and all other entities in which CMS Energy has a controlling financial interest or is the primary beneficiary. Consumers’ consolidated financial statements comprise Consumers and all other entities in which it has a controlling financial interest. CMS Energy uses the equity method of accounting for investments in companies and partnerships that are not consolidated, where they have significant influence over operations and financial policies but are not the primary beneficiary. CMS Energy and Consumers eliminate intercompany transactions and balances.

Use of Estimates

Use of Estimates: CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures. Actual results could differ from those estimates.

Contingencies

Contingencies: CMS Energy and Consumers record estimated loss contingencies on their consolidated financial statements when it is probable that a loss has been incurred and when the amount of loss can be reasonably estimated. For environmental remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. CMS Energy and Consumers expense legal fees as incurred; fees incurred but not yet billed are accrued based on estimates of work performed.

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs

Debt Issuance Costs, Discounts, Premiums, and Refinancing Costs: Upon the issuance of long-term debt, CMS Energy and Consumers defer issuance costs, discounts, and premiums and amortize those amounts over the terms of the associated debt. Debt issuance costs are presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Upon the refinancing of long-term debt, Consumers, as a regulated entity, defers any remaining unamortized issuance costs, discounts, and premiums associated with the refinanced debt and amortizes those amounts over the term of the newly issued debt. For the non‑regulated portions of CMS Energy’s business, any remaining unamortized issuance costs, discounts, and premiums associated with extinguished debt are charged to earnings.

Derivative Instruments

Derivative Instruments: In order to support ongoing operations, CMS Energy and Consumers enter into contracts for the future purchase and sale of various commodities, such as electricity, natural gas, and coal. These forward contracts are generally long-term in nature and result in physical delivery of the commodity at a contracted price. Most of these contracts are not subject to derivative accounting for one or more of the following reasons:

•they do not have a notional amount (that is, a number of units specified in a derivative instrument, such as MWh of electricity or bcf of natural gas)

•they qualify for the normal purchases and sales exception

•they cannot be net settled due in part to the absence of an active market for the commodity

Consumers also uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Consumers accounts for FTRs as derivatives.

Additionally, CMS Energy uses interest rate swaps to manage its interest rate risk on certain long-term debt transactions.

CMS Energy and Consumers record derivative contracts that do not qualify for the normal purchases and sales exception at fair value on their consolidated balance sheets. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities. For details regarding CMS Energy’s and Consumers’ derivative instruments recorded at fair value, see Note 5, Fair Value Measurements.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets and Equity Method Investments: CMS Energy and Consumers perform tests of impairment if certain triggering events occur that indicate the carrying amount of an asset may not be recoverable or that there has been a decline in value that may be other than temporary.

CMS Energy and Consumers evaluate long-lived assets held in use for impairment by calculating the undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. If the undiscounted future cash flows are less than the carrying amount, CMS Energy and Consumers recognize an impairment loss equal to the amount by which the carrying amount exceeds the fair value. CMS Energy and Consumers estimate the fair value of the asset using quoted market prices, market prices of similar assets, or discounted future cash flow analyses.

Investment Tax Credits

Investment Tax Credits: Consumers amortizes its investment tax credits over the life of the related property in accordance with regulatory treatment. CMS Energy’s non‑regulated businesses use the deferral method of accounting for investment tax credits. Under the deferral method, the book basis of the associated assets is reduced by the amount of the credit, resulting in lower depreciation expense over the life of the assets. Furthermore, the tax basis of the assets is reduced by 50 percent of the related credit, resulting in a net deferred tax asset. CMS Energy recognizes the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.

Inventory - Gas and Coal

Inventory: CMS Energy and Consumers use the weighted-average cost method for valuing working gas, recoverable base gas in underground storage facilities, and materials and supplies inventory. CMS Energy and Consumers also use this method for valuing coal inventory, and they classify these amounts as generating plant fuel stock on their consolidated balance sheets.

Inventory - RECs and Emission Allowances

CMS Energy and Consumers account for RECs and emission allowances as inventory and use the weighted-average cost method to remove amounts from inventory. RECs and emission allowances are used to satisfy compliance obligations related to the generation of power. CMS Energy and Consumers classify these amounts within other assets on their consolidated balance sheets.

Inventory - Impairment

CMS Energy and Consumers evaluate inventory for impairment as required to ensure that its carrying value does not exceed the lower of cost or net realizable value.

MISO Transactions

MISO Transactions: MISO requires the submission of hourly day-ahead and real-time bids and offers for energy at locations across the MISO region. CMS Energy and Consumers account for MISO transactions on a net hourly basis in each of the real-time and day-ahead markets, netted across all MISO energy market locations. CMS Energy and Consumers record net hourly purchases in purchased and interchange power and net hourly sales in operating revenue on their consolidated statements of income. They record net billing adjustments upon receipt of settlement statements, record accruals for future net purchases and sales adjustments based on historical experience, and reconcile accruals to actual expenses and sales upon receipt of settlement statements.

Property Taxes

Property Taxes: Property taxes are based on the taxable value of Consumers’ real and personal property assessed by local taxing authorities. Consumers records property tax expense over the fiscal year of the taxing authority for which the taxes are levied. The deferred property tax balance represents the amount of Consumers’ accrued property tax that will be recognized over future governmental fiscal periods.

Reclassifications

Reclassifications: CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the present period. The most significant of these reclassifications is related to CMS Energy’s sale of EnerBank to Regions Bank in October 2021. The assets and liabilities of EnerBank are presented as held for sale on CMS Energy’s consolidated balance sheets at December 31, 2020. Additionally, EnerBank’s results of operations through the date of the sale are presented as income from discontinued operations on CMS Energy’s consolidated statements of income for the years ended December 31, 2021, 2020, and 2019. For information regarding the sale of EnerBank, see Note 20, Exit Activities and Discontinued Operations.

Renewable Energy Grant

Renewable Energy Grant: In 2013, Consumers received a renewable energy cash grant for Lake Winds® Energy Park under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. Upon receipt of the grant, Consumers recorded a regulatory liability, which Consumers is amortizing over the life of Lake Winds® Energy Park. Consumers presents the amortization as a reduction to maintenance and other operating expenses on its consolidated statements of income. Consumers recorded the deferred income taxes related to the grant as a reduction of the book basis of Lake Winds® Energy Park.

Capitalization

Capitalization: CMS Energy and Consumers record plant, property, and equipment at original cost when placed into service. The cost includes labor, material, applicable taxes, overhead such as pension and other benefits, and AFUDC, if applicable. Consumers’ plant, property, and equipment is generally recoverable through its general ratemaking process.Software: CMS Energy and Consumers capitalize the costs to purchase and develop internal-use computer software. These costs are expensed evenly over the estimated useful life of the internal-use computer software. If computer software is integral to computer hardware, then its cost is capitalized and depreciated with the hardware.

Plant Retirement and Abandonment

With the exception of utility property for which the remaining book value has been securitized, mothballed utility property stays in rate base and continues to be depreciated at the same rate as before the mothball period. When utility property is retired or otherwise disposed of in the ordinary course of business, Consumers records the original cost to accumulated depreciation, along with associated cost of removal, net of salvage. CMS Energy and Consumers recognize gains or losses on the retirement or disposal of non‑regulated assets in income. Consumers records cost of removal collected from customers, but not spent, as a regulatory liability.

AFUDC

AFUDC: Consumers capitalizes AFUDC on regulated major construction projects, except pollution control facilities on its fossil-fuel-fired power plants. AFUDC represents the estimated cost of debt and authorized return-on-equity funds used to finance construction additions. Consumers records the offsetting credit as a reduction of interest for the amount representing the borrowed funds component and as other income for the equity funds component on the consolidated statements of income. When construction is completed and the property is placed in service, Consumers depreciates and recovers the capitalized AFUDC from customers over the life of the related asset.

Regulatory Depreciation and Amortization

Consumers depreciates utility property on an asset-group basis, in which it applies a single MPSC-approved depreciation rate to the gross investment in a particular class of property within the electric and gas segments. Consumers performs depreciation studies periodically to determine appropriate group lives.

Planned Major Maintenance Activities

CMS Energy and Consumers record property repairs and minor property replacement as maintenance expense. CMS Energy and Consumers record planned major maintenance activities as operating expense unless the cost represents the acquisition of additional long-lived assets or the replacement of an existing long-lived asset.

Lessee

Lessee

CMS Energy and Consumers lease various assets from third parties, including coal-carrying railcars, real estate, service vehicles, and gas pipeline capacity. In addition, CMS Energy and Consumers account for several of their PPAs as leases.

CMS Energy and Consumers do not record right-of-use assets or lease liabilities on their consolidated balance sheets for rentals with lease terms of 12 months or less, most of which are for the lease of real estate and service vehicles. Lease expense for these rentals is recognized on a straight-line basis over the lease term.

CMS Energy and Consumers include future payments for all renewal options, fair market value extensions, and buyout provisions reasonably certain of exercise in their measurement of lease right-of-use assets and lease liabilities. In addition, certain leases for service vehicles contain end-of-lease adjustment clauses based on proceeds received from the sale or disposition of the vehicles. CMS Energy and Consumers also include executory costs in the measurement of their right-of-use assets and lease liabilities, except for maintenance costs related to their coal-carrying railcar leases.

Most of Consumers’ PPAs contain provisions at the end of the initial contract terms to renew the agreements annually under mutually agreed‑upon terms at the time of renewal. Energy and capacity payments that vary depending on quantities delivered are recognized as variable lease costs when incurred. Consumers accounts for a PPA with one of CMS Energy’s equity method subsidiaries as a finance lease.

Asset Retirement Obligations

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities associated with the closure of certain gas wells that have an indeterminate life. CMS Energy and Consumers have not recorded liabilities for assets that have immaterial cumulative disposal costs, such as substation batteries.

CMS Energy and Consumers calculate the fair value of ARO liabilities using an expected present-value technique that reflects assumptions about costs and inflation, and uses a credit-adjusted risk-free rate to discount the expected cash flows. CMS Energy’s ARO liabilities are primarily at Consumers.

Retirement Benefits - Pension

The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Retirement Benefits - Nonpension

The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

CMS Energy and Consumers amortize net gains and losses in excess of ten percent of the greater of the PBO or the MRV over the average remaining service period for DB Pension Plan A and the OPEB Plan and over the average remaining life expectancy of participants for DB Pension Plan B. For DB Pension Plan A, the estimated period of amortization of gains and losses was eight years for the years ended December 31, 2021 and 2020, and nine years for the year ended December 31, 2019. For DB Pension Plan B, the estimated period of amortization of gains and losses was 18 years for the year ended December 31, 2021, 19 years for the year ended December 31, 2020, and 20 years for the year ended December 31, 2019. For the OPEB Plan, the estimated amortization period was nine years for the years ended December 31, 2021 and 2020, and ten years for the year ended December 31, 2019.

Prior service cost (credit) amortization is established in the year in which the prior service cost (credit) first occurred, and is based on the same amortization period for all future years until the prior service cost

(credit) is fully amortized. CMS Energy and Consumers had new prior service costs for DB Pension Plan A in 2020. The estimated period of amortization of these new prior service costs is eight years.

CMS Energy and Consumers determine the MRV for the assets of the DB Pension Plans as the fair value of plan assets on the measurement date, adjusted by the gains or losses that will not be admitted into the MRV until future years. CMS Energy and Consumers reflect each year’s gain or loss in the MRV in equal amounts over a five-year period beginning on the date the original amount was determined. CMS Energy and Consumers determine the MRV for OPEB Plan assets as the fair value of assets on the measurement date.

Income taxes

CMS Energy and its subsidiaries file a consolidated U.S. federal income tax return as well as a Michigan Corporate Income Tax return for the unitary business group and various other state unitary group combined income tax returns. Income taxes are allocated based on each company’s separate taxable income in accordance with the CMS Energy tax sharing agreement.

Consumers Utility Revenue

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff-based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff-based sales performance obligations are described below.

•Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of Consumers’ service to stand ready to deliver.

•Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate-making process and represent the stand-alone selling price of a bundled product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed-term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past-due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

Unbilled Revenues

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month-end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class.

Alternative-Revenue Programs

Alternative‑Revenue Programs: Consumers accounts for its energy waste reduction incentive mechanism and financial compensation mechanism as alternative-revenue programs. Consumers recognizes revenue related to the energy waste reduction incentive as soon as energy savings exceed the annual targets established by the MPSC and recognizes revenue related to the financial compensation mechanism as payments are made on MPSC-approved PPAs. For additional information on these mechanisms, see Note 2, Regulatory Matters.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather‑normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative‑revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Cash and Cash Equivalents

Cash and Cash Equivalents: Cash and cash equivalents include short-term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

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Regulatory Matters (Tables) - Consumers Energy Company

12 Months Ended

Dec. 31, 2021

Public Utility, Property, Plant and Equipment [Line Items]

Schedule of Regulatory Assets

Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31	End of Recovery or Refund Period		2021			2020
Regulatory assets
Current
Energy waste reduction plan incentive1		2022		$	42		$	34
Deferred capital spending2		2021		—			6
Other		2022		4			2
Total current regulatory assets				$	46		$	42
Non-current
Postretirement benefits3		various		$	837		$	1,231
Costs of coal-fueled electric generating units to be retired2		various		678			678
ARO4		various		247			216
Securitized costs2		2029		193			221
MGP sites4		various		112			120
Unamortized loss on reacquired debt4		various		104			108
Energy waste reduction plan incentive1		2023		46			42
Energy waste reduction plan4		various		13			16
Demand response program4		various		10			10
Other		various		19			11
Total non-current regulatory assets				$	2,259		$	2,653
Total regulatory assets				$	2,305		$	2,695
Regulatory liabilities
Current
Income taxes, net		2022		$	138		$	105
Reserve for customer refunds		2022		2			28
Voluntary transmission asset sale gain share		2021		—			14
Other		2022		6			4
Total current regulatory liabilities				$	146		$	151
Non-current
Cost of removal		various		$	2,375		$	2,245
Income taxes, net		various		1,297			1,419
Postretirement benefits		various		54			—
Renewable energy grant		2043		47			49
Renewable energy plan		2028		13			9
ARO		various		—			11
Other		various		16			11
Total non-current regulatory liabilities				$	3,802		$	3,744
Total regulatory liabilities				$	3,948		$	3,895

1These regulatory assets have arisen from an alternative revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2The MPSC has provided, or Consumers expects, a specific return on these regulatory assets.

3This regulatory asset is included in rate base, thereby providing a return.

4These regulatory assets represent incurred costs for which the MPSC has provided, or Consumers expects, recovery without a return on investment.

Schedule of Regulatory Liabilities

Presented in the following table are the regulatory assets and liabilities on Consumers’ consolidated balance sheets:

In Millions
December 31	End of Recovery or Refund Period		2021			2020
Regulatory assets
Current
Energy waste reduction plan incentive1		2022		$	42		$	34
Deferred capital spending2		2021		—			6
Other		2022		4			2
Total current regulatory assets				$	46		$	42
Non-current
Postretirement benefits3		various		$	837		$	1,231
Costs of coal-fueled electric generating units to be retired2		various		678			678
ARO4		various		247			216
Securitized costs2		2029		193			221
MGP sites4		various		112			120
Unamortized loss on reacquired debt4		various		104			108
Energy waste reduction plan incentive1		2023		46			42
Energy waste reduction plan4		various		13			16
Demand response program4		various		10			10
Other		various		19			11
Total non-current regulatory assets				$	2,259		$	2,653
Total regulatory assets				$	2,305		$	2,695
Regulatory liabilities
Current
Income taxes, net		2022		$	138		$	105
Reserve for customer refunds		2022		2			28
Voluntary transmission asset sale gain share		2021		—			14
Other		2022		6			4
Total current regulatory liabilities				$	146		$	151
Non-current
Cost of removal		various		$	2,375		$	2,245
Income taxes, net		various		1,297			1,419
Postretirement benefits		various		54			—
Renewable energy grant		2043		47			49
Renewable energy plan		2028		13			9
ARO		various		—			11
Other		various		16			11
Total non-current regulatory liabilities				$	3,802		$	3,744
Total regulatory liabilities				$	3,948		$	3,895

1These regulatory assets have arisen from an alternative revenue program and are not associated with incurred costs or capital investments. Therefore, the MPSC has provided for recovery without a return.

2The MPSC has provided, or Consumers expects, a specific return on these regulatory assets.

3This regulatory asset is included in rate base, thereby providing a return.4These regulatory assets represent incurred costs for which the MPSC has provided, or Consumers expects, recovery without a return on investment

Schedule of Assets and Liabilities for PSCR and GCR Underrecoveries and Overrecoveries

Presented in the following table are the assets and liabilities for PSCR and GCR underrecoveries and overrecoveries reflected on Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
Assets
GCR underrecoveries		$	25		$	—
Accounts receivable and accrued revenue		$	25		$	—
Liabilities
PSCR overrecoveries		$	12		$	5
GCR overrecoveries		—			15
Accrued rate refunds		$	12		$	20

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Contingencies and Commitments (Tables)

12 Months Ended

Dec. 31, 2021

Site Contingency [Line Items]

Expected Remediation Costs By Year

CMS Energy expects to pay the following amounts for long-term leachate disposal and operating and maintenance costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy
Long-term leachate disposal and operating and maintenance costs		$	4		$	4		$	4		$	4		$	4

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2021:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from purchase of VIE1	September 2020	indefinite		$	314		$	—
Indemnity obligations from stock and asset sale agreements2	various	indefinite		225			4
Guarantee3	July 2011	indefinite		30			—
Consumers
Guarantee3	July 2011	indefinite		$	30		$	—

1In conjunction with the purchase of its interest in Aviator Wind Equity Holdings, CMS Enterprises assumed certain indemnity obligations that protect the associated tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest in Aviator Wind. CMS Enterprises would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on CMS Enterprises’ ownership interest in Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes and breaches of representations and warranties. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note and an indemnity provided in connection with the sale of EnerBank to Regions Bank. For further details on the sale, see Note 20, Exit Activities and Discontinued Operations. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

3This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Contractual purchase obligations

Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2021 for each of the periods shown:

In Millions
	Payments Due
	Total			2022			2023			2024			2025			2026			Beyond 2026
CMS Energy, including Consumers
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		4,445			1,489			1,657			412			639			36			212
Total purchase obligations		$	12,473		$	2,317		$	2,404		$	1,174		$	1,348		$	642		$	4,588
Consumers
PPAs
MCV PPA		$	2,204		$	349		$	348		$	346		$	306		$	231		$	624
Palisades PPA		116			116			—			—			—			—			—
Related-party PPAs		342			65			65			65			47			29			71
Other PPAs		5,366			298			334			351			356			346			3,681
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		3,950			1,381			1,596			364			594			12			3
Total purchase obligations		$	11,978		$	2,209		$	2,343		$	1,126		$	1,303		$	618		$	4,379

Consumers Energy Company

Site Contingency [Line Items]

Expected Remediation Costs By Year

Consumers expects to pay the following amounts for remediation and other response activity costs in each of the next five years:

In Millions
	2022			2023			2024			2025			2026
Consumers
Remediation and other response activity costs		$	3		$	9		$	24		$	11		$	1

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at December 31, 2021:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from purchase of VIE1	September 2020	indefinite		$	314		$	—
Indemnity obligations from stock and asset sale agreements2	various	indefinite		225			4
Guarantee3	July 2011	indefinite		30			—
Consumers
Guarantee3	July 2011	indefinite		$	30		$	—

1In conjunction with the purchase of its interest in Aviator Wind Equity Holdings, CMS Enterprises assumed certain indemnity obligations that protect the associated tax equity investor against losses incurred as a result of breaches of representations and warranties provided by Aviator Wind Equity Holdings and its subsidiaries. These obligations are generally capped at an amount equal to the tax equity investor’s capital contributions plus a specified return, less any distributions and tax benefits it receives, in connection with its membership interest in Aviator Wind. CMS Enterprises would recover 49 percent of any amounts paid to the tax equity investor from the other owner of Aviator Wind Equity Holdings. Additionally, Aviator Wind holds insurance coverage that would partially protect against losses incurred as a result of certain failures to qualify for production tax credits. For further details on CMS Enterprises’ ownership interest in Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

2These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, including claims related to taxes and breaches of representations and warranties. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note and an indemnity provided in connection with the sale of EnerBank to Regions Bank. For further details on the sale, see Note 20, Exit Activities and Discontinued Operations. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

3This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Contractual purchase obligations

Presented in the following table are CMS Energy’s and Consumers’ contractual purchase obligations at December 31, 2021 for each of the periods shown:

In Millions
	Payments Due
	Total			2022			2023			2024			2025			2026			Beyond 2026
CMS Energy, including Consumers
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		4,445			1,489			1,657			412			639			36			212
Total purchase obligations		$	12,473		$	2,317		$	2,404		$	1,174		$	1,348		$	642		$	4,588
Consumers
PPAs
MCV PPA		$	2,204		$	349		$	348		$	346		$	306		$	231		$	624
Palisades PPA		116			116			—			—			—			—			—
Related-party PPAs		342			65			65			65			47			29			71
Other PPAs		5,366			298			334			351			356			346			3,681
Total PPAs		$	8,028		$	828		$	747		$	762		$	709		$	606		$	4,376
Other		3,950			1,381			1,596			364			594			12			3
Total purchase obligations		$	11,978		$	2,209		$	2,343		$	1,126		$	1,303		$	618		$	4,379

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Financings and Capitalization (Tables)

12 Months Ended

Dec. 31, 2021

Debt Instrument [Line Items]

Summary Of Long-Term Debt

Presented in the following table is CMS Energy’s long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity	2021			2020
CMS Energy, including Consumers
CMS Energy, parent only
Senior notes	3.875		2024		$	250		$	250
	3.600		2025		250			250
	3.000		2026		300			300
	2.950		2027		275			275
	3.450		2027		350			350
	4.700		2043		250			250
	4.875		2044		300			300
					$	1,975		$	1,975
Term loan facility	variable		2021		—			200
Junior subordinated notes1	4.750	2	2050		500			500
	3.750	3	2050		400			400
	5.625		2078		200			200
	5.875		2078		280			280
	5.875		2079		630			630
					$	2,010		$	2,010
Total CMS Energy, parent only					$	3,985		$	4,185
Consumers					8,505			8,197
CMS Enterprises, including subsidiaries
Term loan facility	variable	4	2025		78			85
Total principal amount outstanding					$	12,568		$	12,467
Current amounts					(373)			(571)
Unamortized discounts					(31)			(33)
Unamortized issuance costs					(118)			(119)
Total long-term debt					$	12,046		$	11,744

1These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness.

2On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

3On December 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 2.900 percent.

4A subsidiary of CMS Enterprises issued non‑recourse debt to finance the acquisition of a wind generation project in Northwest Ohio. The interest rate for the debt is three-month LIBOR plus 1.500 percent through October 2022 and three-month LIBOR plus 1.750 percent thereafter. At December 31, 2021 and 2020, the interest rate was 1.724 percent and 1.754 percent, respectively. The same subsidiary of CMS Enterprises entered into interest rate swaps with the lending banks to fix the interest charges associated with the debt, at a rate of 4.702 percent through October 2022 and 4.952 percent thereafter. Principal and interest payments are made quarterly. For information about the interest rate swaps, see Note 5, Fair Value Measurements.

Schedule of Major Long-Term Debt Transactions

Presented in the following table is a summary of major long-term debt retirements during year ended December 31, 2021:

	Principal (In Millions)			Interest Rate	Retirement Date	Maturity Date
CMS Energy, parent only
Term Loan facility		$	200	variable	October 2021	November 2021

Schedule of Debt Maturities

2021, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	—		$	250		$	250		$	300
Consumers		365			654			332			31			32
CMS Enterprises, including subsidiaries		8			9			10			51			—
Total CMS Energy		$	373		$	663		$	592		$	332		$	332
Consumers
Long-term debt		$	365		$	654		$	332		$	31		$	32

Schedule of Revolving Credit Facilities

The following credit facilities with banks were available at December 31, 2021:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20241		$	550		$	—		$	24		$	526
September 23, 20222		31			—			31			—
CMS Enterprises, including subsidiaries
September 25, 20253		$	39		$	—		$	39		$	—
September 30, 20254		18			—			8			10
Consumers5
June 5, 2024		$	850		$	—		$	12		$	838
November 19, 2023		250			—			8			242
April 18, 2022		30			—			30			—

1There were no borrowings under this facility during the year ended December 31, 2021.

2The maximum aggregate of letters of credit that may be issued under this facility is $50 million. The amount remaining under the facility is uncommitted.

3This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

4Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2021.

5Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2021.

Schedule of Forward Contracts

Presented in the following table are details of CMS Energy’s forward sales contracts under this program at December 31, 2021:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			December 31, 2021
September 15, 2020	June 30, 2022	846,759		$	61.04		$	58.51
December 22, 2020	June 22, 2022	115,595		61.81			59.73

Consumers Energy Company

Debt Instrument [Line Items]

Summary Of Long-Term Debt

Presented in the following table is Consumers’ long-term debt at December 31:

In Millions
	Interest Rate (%)		Maturity		2021			2020
Consumers
First mortgage bonds
	0.350		2023			$	300		$	300
	3.375		2023			325			325
	3.125		2024			250			250
	3.190		2024			52			52
	3.680		2027			100			100
	3.390		2027			35			35
	3.800		2028			300			300
	3.180		2032			100			100
	5.800		2035			175			175
	3.520		2037			335			335
	4.010		2038			215			215
	6.170		2040			50			50
	4.970		2040			50			50
	4.310		2042			263			263
	3.950		2043			425			425
	4.100		2045			250			250
	3.250		2046			450			450
	3.950		2047			350			350
	4.050		2048			550			550
	4.350		2049			550			550
	3.750		2050			300			300
	3.100		2050			550			550
	3.500		2051			575			575
	2.650		2052			300			—
	3.860		2052			50			50
	4.280		2057			185			185
	2.500		2060			525			525
	4.350		2064			250			250
	variable	1	2069			76			76
	variable	1	2070			134			134
	variable	1	2070			127			127
						$	8,197		$	7,897
Tax-exempt revenue bonds	0.875	2	2035			35			—
	1.800	3	2049			75			75
						$	110		$	75
Securitization bonds	3.290	4	2025-2029	5		198			225
Total principal amount outstanding						$	8,505		$	8,197
Current amounts						(365)			(364)
Unamortized discounts						(28)			(29)
Unamortized issuance costs						(62)			(62)
Total long-term debt						$	8,050		$	7,742

1The variable-rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent, subject to a zero-percent floor (zero percent at December 31, 2021) and (zero percent at December 31, 2020). The holders of these variable-rate bonds may put them to Consumers for redemption on certain dates prior to their stated maturity, including dates within one year of December 31, 2021.

2The interest rate on these tax-exempt revenue bonds will reset on October 8, 2026.

3The interest rate on these tax‑exempt revenue bonds will reset on October 1, 2024.

4The weighted-average interest rate for Consumers’ securitization bonds issued through its subsidiary, Consumers 2014 Securitization Funding, was 3.290 percent at December 31, 2021 and 3.250 percent at December 31, 2020.

5Principal and interest payments are made semiannually.

Schedule of Major Long-Term Debt Transactions

Presented in the following table is a summary of major long-term debt issuances during 2021:

	Principal (In Millions)			Interest Rate	Issuance Date	Maturity Date
Consumers
First mortgage bonds		$	300	2.650%	August 2021	August 2052
Tax-exempt revenue bonds1		35		0.875%	October 2021	April 2035

1    These bonds were repurchased, in lieu of redemption, in July 2020. In October 2021, the bonds were remarketed to the public and the interest rate on the bonds will reset in October 2026.

Schedule of Debt Maturities

2021, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	—		$	—		$	250		$	250		$	300
Consumers		365			654			332			31			32
CMS Enterprises, including subsidiaries		8			9			10			51			—
Total CMS Energy		$	373		$	663		$	592		$	332		$	332
Consumers
Long-term debt		$	365		$	654		$	332		$	31		$	32

Schedule of Revolving Credit Facilities

The following credit facilities with banks were available at December 31, 2021:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 20241		$	550		$	—		$	24		$	526
September 23, 20222		31			—			31			—
CMS Enterprises, including subsidiaries
September 25, 20253		$	39		$	—		$	39		$	—
September 30, 20254		18			—			8			10
Consumers5
June 5, 2024		$	850		$	—		$	12		$	838
November 19, 2023		250			—			8			242
April 18, 2022		30			—			30			—

1There were no borrowings under this facility during the year ended December 31, 2021.

2The maximum aggregate of letters of credit that may be issued under this facility is $50 million. The amount remaining under the facility is uncommitted.

3This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 19, Variable Interest Entities.

4Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank. There were no borrowings under this facility during the year ended December 31, 2021.

5Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the year ended December 31, 2021.

Schedule of Preferred Stock

Presented in the following table are details of Consumers’ preferred stock at December 31, 2021 and 2020:

	Par Value			Optional Redemption Price			Number of Shares Authorized	Number of Shares Outstanding
Cumulative, with no mandatory redemption		$	100		$	110	7,500,000	373,148

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Assets And Liabilities Measured At Fair Value On A Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
December 31	2021			2020			2021			2020
Assets1
Restricted cash equivalents		$	24		$	17		$	22		$	15
Nonqualified deferred compensation plan assets		27			23			21			18
Derivative instruments		2			1			2			1
Total assets		$	53		$	41		$	45		$	34
Liabilities1
Nonqualified deferred compensation plan liabilities		$	27		$	23		$	21		$	18
Derivative instruments		7			11			—			—
Total liabilities		$	34		$	34		21			$	18

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Consumers Energy Company

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Assets And Liabilities Measured At Fair Value On A Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
December 31	2021			2020			2021			2020
Assets1
Restricted cash equivalents		$	24		$	17		$	22		$	15
Nonqualified deferred compensation plan assets		27			23			21			18
Derivative instruments		2			1			2			1
Total assets		$	53		$	41		$	45		$	34
Liabilities1
Nonqualified deferred compensation plan liabilities		$	27		$	23		$	21		$	18
Derivative instruments		7			11			—			—
Total liabilities		$	34		$	34		21			$	18

1All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Assets Reported at Fair Value on a Nonrecurring Basis

Presented in the following table are Consumers’ assets, by level within the fair value hierarchy, reported at fair value on a nonrecurring basis during the year ended December 31, 2021:

In Millions
	Level 1			Level 2			Level 3			Gains (Losses)
Assets held for sale		$	—		$	15		$	—	$	(4)

XML

Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Financial Instruments [Line Items]

Schedule Of Carrying Amounts And Fair Values Of Financial Instruments

For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	December 31, 2021															December 31, 2020
	Carrying Amount			Fair Value												Carrying Amount			Fair Value
				Total			Level												Total			Level
							1			2			3									1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Liabilities
Long-term debt2		12,419			13,800			1,189			10,656			1,955			12,315			14,601			1,249			11,267			2,085
Long-term payables3		31			32			—			—			32			33			35			—			—			35
Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Notes receivable – related party4		104			104			—			—			104			107			107			—			—			107
Liabilities
Long-term debt5		8,415			9,410			—			7,455			1,955			8,106			9,801			—			7,716			2,085

1Includes current portion of long-term accounts receivable of $9 million at December 31, 2021 and $12 million at December 31, 2020.

2Includes current portion of long-term debt of $373 million at December 31, 2021 and $571 million at December 31, 2020.

3Includes current portion of long-term payables of $23 million at December 31, 2021 and $6 million at December 31, 2020.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2021 and 2020.

5Includes current portion of long-term debt of $365 million at December 31, 2021 and $364 million at December 31, 2020.

Consumers Energy Company

Financial Instruments [Line Items]

Schedule Of Carrying Amounts And Fair Values Of Financial Instruments

For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	December 31, 2021															December 31, 2020
	Carrying Amount			Fair Value												Carrying Amount			Fair Value
				Total			Level												Total			Level
							1			2			3									1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Liabilities
Long-term debt2		12,419			13,800			1,189			10,656			1,955			12,315			14,601			1,249			11,267			2,085
Long-term payables3		31			32			—			—			32			33			35			—			—			35
Consumers
Assets
Long-term receivables1		$	14		$	14		$	—		$	—		$	14		$	17		$	17		$	—		$	—		$	17
Notes receivable – related party4		104			104			—			—			104			107			107			—			—			107
Liabilities
Long-term debt5		8,415			9,410			—			7,455			1,955			8,106			9,801			—			7,716			2,085

1Includes current portion of long-term accounts receivable of $9 million at December 31, 2021 and $12 million at December 31, 2020.

2Includes current portion of long-term debt of $373 million at December 31, 2021 and $571 million at December 31, 2020.

3Includes current portion of long-term payables of $23 million at December 31, 2021 and $6 million at December 31, 2020.

4Includes current portion of notes receivable – related party of $7 million at December 31, 2021 and 2020.

5Includes current portion of long-term debt of $365 million at December 31, 2021 and $364 million at December 31, 2020.

XML

Plant, Property, and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Public Utility, Property, Plant and Equipment [Line Items]

Schedule Of Property, Plant And Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions
December 31	Estimated Depreciable Life in Years	2021			2020
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers	3 - 125		$	28,771		$	26,757
Enterprises
Independent power production1	2 - 40		1,121			1,112
Other	3 - 5		1			1
Plant, property, and equipment, gross			$	29,893		$	27,870
Construction work in progress			961			1,085
Accumulated depreciation and amortization			(8,502)			(7,938)
Total plant, property, and equipment2			$	22,352		$	21,017
Consumers
Plant, property, and equipment, gross
Electric
Generation	22 - 125		$	6,704		$	6,376
Distribution	20 - 75		9,815			9,130
Other	5 - 50		1,309			1,326
Assets under finance leases and other financing3			319			323
Gas
Distribution	20 - 85		6,338			5,702
Transmission	17 - 75		2,319			2,003
Underground storage facilities4	27 - 75		1,117			1,046
Other	5 - 50		814			817
Assets under finance leases3			13			13
Other non-utility property	3 - 51		23			21
Plant, property, and equipment, gross			$	28,771		$	26,757
Construction work in progress			915			1,058
Accumulated depreciation and amortization			(8,371)			(7,844)
Total plant, property, and equipment2			$	21,315		$	19,971

1A significant portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 8, Leases and Palisades Financing.

2Consumers’ plant additions were $2.4 billion for the year ended December 31, 2021 and $2.0 billion for the year ended December 31, 2020. Consumers’ plant retirements, which include the impact of disallowances and transfers to held for sale, were $361 million for the year ended December 31, 2021, and $220 million for the year ended December 31, 2020.

3For information regarding the amortization terms of Consumers’ assets under finance leases and other financing, see Note 8, Leases and Palisades Financing.

4Underground storage includes base natural gas of $26 million at December 31, 2021 and 2020. Base natural gas is not subject to depreciation.

Schedule of Finite-Lived Intangible Assets by Major Class Table

Presented in the following table are details about CMS Energy’s and Consumers’ intangible assets:

In Millions
Description	Amortization Life in Years	December 31, 2021						December 31, 2020
		Gross Cost1			Accumulated Amortization			Gross Cost1			Accumulated Amortization
CMS Energy, including Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			26			16
Total			$	1,102		$	684		$	1,105		$	658
Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			25			16
Total			$	1,102		$	684		$	1,104		$	658

1Consumers’ intangible asset additions were $88 million for the year ended December 31, 2021 and $69 million for the year ended December 31, 2020. Consumers’ intangible asset retirements were $91 million for the year ended December 31, 2021 and $65 million for the year ended December 31, 2020.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Public Utilities Property Plant and Equipment Schedule of Accumulated Depreciation and Amortization Table

Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		136			97
Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		5			3

Schedule Of Depreciation And Amortization

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment		$	975		$	901		$	841
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,114		$	1,043		$	989
Consumers
Depreciation expense – plant, property, and equipment		$	938		$	881		$	827
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,077		$	1,023		$	975

Schedule Of Estimated Amortization Expense For Intangibles

Presented in the following table is CMS Energy’s and Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84
Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84

Consumers Energy Company

Public Utility, Property, Plant and Equipment [Line Items]

Schedule Of Property, Plant And Equipment

Presented in the following table are details of CMS Energy’s and Consumers’ plant, property, and equipment:

In Millions
December 31	Estimated Depreciable Life in Years	2021			2020
CMS Energy, including Consumers
Plant, property, and equipment, gross
Consumers	3 - 125		$	28,771		$	26,757
Enterprises
Independent power production1	2 - 40		1,121			1,112
Other	3 - 5		1			1
Plant, property, and equipment, gross			$	29,893		$	27,870
Construction work in progress			961			1,085
Accumulated depreciation and amortization			(8,502)			(7,938)
Total plant, property, and equipment2			$	22,352		$	21,017
Consumers
Plant, property, and equipment, gross
Electric
Generation	22 - 125		$	6,704		$	6,376
Distribution	20 - 75		9,815			9,130
Other	5 - 50		1,309			1,326
Assets under finance leases and other financing3			319			323
Gas
Distribution	20 - 85		6,338			5,702
Transmission	17 - 75		2,319			2,003
Underground storage facilities4	27 - 75		1,117			1,046
Other	5 - 50		814			817
Assets under finance leases3			13			13
Other non-utility property	3 - 51		23			21
Plant, property, and equipment, gross			$	28,771		$	26,757
Construction work in progress			915			1,058
Accumulated depreciation and amortization			(8,371)			(7,844)
Total plant, property, and equipment2			$	21,315		$	19,971

1A significant portion of independent power production assets are leased to others under operating leases. For information regarding CMS Energy’s operating leases of owned assets, see Note 8, Leases and Palisades Financing.

2Consumers’ plant additions were $2.4 billion for the year ended December 31, 2021 and $2.0 billion for the year ended December 31, 2020. Consumers’ plant retirements, which include the impact of disallowances and transfers to held for sale, were $361 million for the year ended December 31, 2021, and $220 million for the year ended December 31, 2020.

3For information regarding the amortization terms of Consumers’ assets under finance leases and other financing, see Note 8, Leases and Palisades Financing.

4Underground storage includes base natural gas of $26 million at December 31, 2021 and 2020. Base natural gas is not subject to depreciation.

Assets Under Finance Leases and Other Financing: Presented in the following table are further details about changes in Consumers’ assets under finance leases and other financing:

In Millions
Years Ended December 31	2021			2020
Consumers
Balance at beginning of period		$	336		$	340
Additions		—			—
Net retirements and other adjustments		(4)			(4)
Balance at end of period		$	332		$	336

Schedule of Finite-Lived Intangible Assets by Major Class Table

Presented in the following table are details about CMS Energy’s and Consumers’ intangible assets:

In Millions
Description	Amortization Life in Years	December 31, 2021						December 31, 2020
		Gross Cost1			Accumulated Amortization			Gross Cost1			Accumulated Amortization
CMS Energy, including Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			26			16
Total			$	1,102		$	684		$	1,105		$	658
Consumers
Software development	3 - 15		$	840		$	592		$	856		$	568
Rights of way	50 - 85		211			60			197			57
Franchises and consents	5 - 50		16			10			16			10
Leasehold improvements	various2		9			6			10			7
Other intangibles	various		26			16			25			16
Total			$	1,102		$	684		$	1,104		$	658

1Consumers’ intangible asset additions were $88 million for the year ended December 31, 2021 and $69 million for the year ended December 31, 2020. Consumers’ intangible asset retirements were $91 million for the year ended December 31, 2021 and $65 million for the year ended December 31, 2020.

2Leasehold improvements are amortized over the life of the lease, which may change whenever the lease is renewed or extended.

Public Utilities, Allowance For Funds Used During Construction Average Rate

Presented in the following table are Consumers’ average AFUDC capitalization rates:

Years Ended December 31	2021		2020		2019
Electric	6.2	%	6.9	%	6.4	%
Gas	5.6		5.7		5.8

Public Utilities Property Plant and Equipment Schedule of Accumulated Depreciation and Amortization Table

Presented in the following table are further details about CMS Energy’s and Consumers’ accumulated depreciation and amortization:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		136			97
Consumers
Utility plant assets		$	8,366		$	7,841
Non-utility plant assets		5			3

Public Utilities Property Plant and Equipment Schedule of Composite Depreciation Rate Table

Presented in the following table are the composite depreciation rates for Consumers’ segment properties:

Years Ended December 31	2021		2020		2019
Electric utility property	3.9	%	3.9	%	3.9	%
Gas utility property	2.9		2.9		2.9
Other property	9.4		9.8		10.0

Schedule Of Depreciation And Amortization

Presented in the following table are the components of CMS Energy’s and Consumers’ depreciation and amortization expense:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Depreciation expense – plant, property, and equipment		$	975		$	901		$	841
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,114		$	1,043		$	989
Consumers
Depreciation expense – plant, property, and equipment		$	938		$	881		$	827
Amortization expense
Software		108			112			119
Other intangible assets		4			4			3
Securitized regulatory assets		27			26			26
Total depreciation and amortization expense		$	1,077		$	1,023		$	975

Schedule Of Estimated Amortization Expense For Intangibles

Presented in the following table is CMS Energy’s and Consumers’ estimated amortization expense on intangible assets for each of the next five years:

In Millions
	2022			2023			2024			2025			2026
CMS Energy, including Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84
Consumers
Intangible asset amortization expense		$	108		$	94		$	84		$	86		$	84

Jointly Owned Regulated Utility Facilities

Presented in the following table are Consumers’ investments in jointly owned regulated utility facilities at December 31, 2021:

In Millions, Except Ownership Share
	J.H. Campbell Unit 3				Ludington				Other
Ownership share		93.3		%		51.0		%		various
Utility plant in service		$	1,751			$	499			$	395
Accumulated depreciation		(897)				(198)				(112)
Construction work in progress		21				92				13
Net investment		$	875			$	393			$	296

XML

Leases and Palisades Financing - (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2021 and 2020.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

Lessor, Operating Lease, Payments to be Received, Maturity

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2021
2022	$	48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	196

Consumers Energy Company

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2021 and 2020.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

XML

Asset Retirement Obligations (Tables)

12 Months Ended

Dec. 31, 2021

Asset Retirement Obligations [Line Items]

Schedule of Asset Retirement Obligations

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

Company and ARO Description	In-Service Date	Long-Lived Assets
CMS Energy, including Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage
Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage

Schedule of Change in Asset Retirement Obligation

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2020			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2021
CMS Energy, including Consumers
Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605
Renewable generation assets		23			—			—			—			—			23
Total CMS Energy		$	553		$	71		$	(53)		$	24		$	33		$	628
Consumers
Coal ash disposal areas		$	148		$	—		$	(34)		$	5		$	38		$	157
Gas distribution cut, purge, and cap		240			39			(10)			13			—			282
Asbestos abatement		36			—			—			2			—			38
Renewable generation assets		74			16			—			3			—			93
Gas wells plug and abandon		32			16			(9)			1			(5)			35
Total Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605

In Millions
Company and ARO Description	ARO Liability 12/31/2019			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2020
CMS Energy, including Consumers
Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530
Renewable generation assets		3			19			—			1			—			23
Total CMS Energy		$	477		$	65		$	(41)		$	24		$	28		$	553
Consumers
Coal ash disposal areas		$	166		$	—		$	(24)		$	6		$	—		$	148
Gas distribution cut, purge, and cap		231			1			(5)			13			—			240
Asbestos abatement		34			—			—			2			—			36
Renewable generation assets		21			24			—			1			28			74
Gas wells plug and abandon		22			16			(7)			1			—			32
Cable under Straits of Mackinac		—			5			(5)			—			—			—
Total Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530

Consumers Energy Company

Asset Retirement Obligations [Line Items]

Schedule of Asset Retirement Obligations

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:

Company and ARO Description	In-Service Date	Long-Lived Assets
CMS Energy, including Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage
Consumers
Closure of coal ash disposal areas	various	Generating plants coal ash areas
Gas distribution cut, purge, and cap	various	Gas distribution mains and services
Asbestos abatement	1973	Electric and gas utility plant
Closure of renewable generation assets	various	Wind and solar generation facilities
Gas wells plug and abandon	various	Gas transmission and storage

Schedule of Change in Asset Retirement Obligation

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2020			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2021
CMS Energy, including Consumers
Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605
Renewable generation assets		23			—			—			—			—			23
Total CMS Energy		$	553		$	71		$	(53)		$	24		$	33		$	628
Consumers
Coal ash disposal areas		$	148		$	—		$	(34)		$	5		$	38		$	157
Gas distribution cut, purge, and cap		240			39			(10)			13			—			282
Asbestos abatement		36			—			—			2			—			38
Renewable generation assets		74			16			—			3			—			93
Gas wells plug and abandon		32			16			(9)			1			(5)			35
Total Consumers		$	530		$	71		$	(53)		$	24		$	33		$	605

In Millions
Company and ARO Description	ARO Liability 12/31/2019			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2020
CMS Energy, including Consumers
Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530
Renewable generation assets		3			19			—			1			—			23
Total CMS Energy		$	477		$	65		$	(41)		$	24		$	28		$	553
Consumers
Coal ash disposal areas		$	166		$	—		$	(24)		$	6		$	—		$	148
Gas distribution cut, purge, and cap		231			1			(5)			13			—			240
Asbestos abatement		34			—			—			2			—			36
Renewable generation assets		21			24			—			1			28			74
Gas wells plug and abandon		22			16			(7)			1			—			32
Cable under Straits of Mackinac		—			5			(5)			—			—			—
Total Consumers		$	474		$	46		$	(41)		$	23		$	28		$	530

XML

Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2021

Defined Benefit Plan Disclosure [Line Items]

Schedule Of SERP Trust Assets, ABO And Contributions

Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Trust assets		$	142		$	146
ABO		149			159
Contributions		—			8
Consumers
Trust assets		$	104		$	107
ABO		108			115
Contributions		—			5

Schedule Of Assumptions Used

Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31	2021		2020		2019
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	3.02	%	2.73	%	3.37	%
DB Pension Plan B	2.79		2.41		3.17
DB SERP	2.78		2.40		3.15
OPEB Plan	2.99		2.69		3.32
Rate of compensation increase
DB Pension Plan A	3.60		3.70		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	2.83	%	3.44	%	4.55	%
DB SERP	2.84		3.46		4.58
OPEB Plan	3.03		3.57		4.63
Interest cost discount rate2,3
DB Pension Plan A	1.97		2.92		4.08
DB Pension Plan B	1.70		2.74		3.93
DB SERP	1.72		2.74		3.94
OPEB Plan	1.99		2.88		4.03
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		6.75		7.00
OPEB Plan	6.75		6.75		7.00
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

Schedule Of Net Benefit Costs

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2021			2020			2019			2021			2020			2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	53		$	50		$	41		$	18		$	16		$	14
Interest cost		63			83			103			23			33			41
Settlement loss		1			1			—			—			—			—
Expected return on plan assets		(208)			(191)			(162)			(109)			(100)			(88)
Amortization of:
Net loss		100			95			50			8			15			26
Prior service cost (credit)		4			1			1			(53)			(56)			(62)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	41		$	33		$	(113)		$	(92)		$	(69)
Consumers
Net periodic cost (credit)
Service cost		$	51		$	49		$	40		$	17		$	15		$	13
Interest cost		59			78			97			23			31			40
Expected return on plan assets		(197)			(181)			(153)			(102)			(93)			(82)
Amortization of:
Net loss		96			90			47			8			15			26
Prior service cost (credit)		4			1			1			(51)			(54)			(61)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	39		$	32		$	(105)		$	(86)		$	(64)

Schedule Of Funded Status Of Retirement Benefit Plans

Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2021			2020				2021			2020			2021			2020
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Service cost		53			50				—			—			18			16
Interest cost		60			79				3			4			23			33
Plan amendments		—			24				—			—			5			—
Actuarial loss (gain)		(108)		1	355		1		(4)			16			(32)		1	39		1
Benefits paid		(201)			(215)				(10)			(10)			(53)			(48)
Benefit obligation at end of period		$	3,070		$	3,266			$	149		$	160		$	1,166		$	1,205
Plan assets at fair value at beginning of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Actual return on plan assets		398			371				—			—			194			182
Company contribution		—			700				10			10			—			1
Actual benefits paid		(201)			(215)				(10)			(10)			(52)			(47)
Plan assets at fair value at end of period		$	3,599		$	3,402			$	—		$	—		$	1,787		$	1,645
Funded status		$	529	2	$	136	2		$	(149)		$	(160)		$	621		$	440
Consumers
Benefit obligation at beginning of period									$	117		$	109		$	1,158		$	1,120
Service cost									—			—			17			15
Interest cost									2			3			23			31
Plan amendments									—			—			5			—
Actuarial loss (gain)									(3)			12			(30)		1	37		1
Benefits paid									(7)			(7)			(51)			(45)
Benefit obligation at end of period									$	109		$	117		$	1,122		$	1,158
Plan assets at fair value at beginning of period									$	—		$	—		$	1,535		$	1,410
Actual return on plan assets									—			—			182			169
Company contribution									7			7			—			1
Actual benefits paid									(7)			(7)			(49)			(45)
Plan assets at fair value at end of period									$	—		$	—		$	1,668		$	1,535
Funded status									$	(109)		$	(117)		$	546		$	377

1The actuarial gains for 2021 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates. The actuarial loss for 2020 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $510 million at December 31, 2021 and $138 million at December 31, 2020.

Schedule Of Retirement Benefit Plan Assets (Liabilities)

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	529		$	136
OPEB Plan		621			440
Current liabilities
DB SERP		10			10
Non-current liabilities
DB SERP		139			150
Consumers
Non-current assets
DB Pension Plans		$	510		$	138
OPEB Plan		546			377
Current liabilities
DB SERP		7			7
Non-current liabilities
DB SERP		102			110

Schedule Of Net Periodic Benefit Cost Not Yet Recognized

Presented in the following table are the amounts recognized in regulatory assets, regulatory liabilities, and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets and regulatory liabilities, see Note 2, Regulatory Matters.

In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2021			2020			2021			2020
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss (gain)		94			120			(17)			(10)
Prior service cost (credit)		—			1			(5)			(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	931		$	1,344		$	(76)		$	(8)
Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss		41			47			—			—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	878		$	1,270		$	(54)		$	8

Schedule Of Allocation Of Plan Assets

Presented in the following tables are the fair values of the assets of CMS Energy’s DB Pension Plans and OPEB Plan, by asset category and by level within the fair value hierarchy. For additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	DB Pension Plans
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	30		$	30		$	—		$	115		$	115		$	—
U.S. government and agencies securities		209			—			209			150			—			150
Corporate debt		595			—			595			540			—			540
State and municipal bonds		13			—			13			11			—			11
Foreign corporate bonds		66			—			66			41			—			41
Mutual funds		785			785			—			971			971			—
		$	1,698		$	815		$	883		$	1,828		$	1,086		$	742
Pooled funds		1,901									1,574
Total		$	3,599								$	3,402

In Millions
	OPEB Plan
	December 31, 2021									December 31, 2020
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	21		$	21		$	—		$	33		$	33		$	—
U.S. government and agencies securities		25			—			25			18			—			18
Corporate debt		73			—			73			64			—			64
State and municipal bonds		2			—			2			2			—			2
Foreign corporate bonds		8			—			8			5			—			5
Common stocks		85			85			—			66			66			—
Mutual funds		941			941			—			807			807			—
		$	1,155		$	1,047		$	108		$	995		$	906		$	89
Pooled funds		632									650
Total		$	1,787								$	1,645

Schedule Of Asset Allocation

Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2021:

	DB Pension Plans			OPEB Plan
Equity securities		54.0	%		55.0	%
Fixed-income securities		28.0			28.0
Real asset investments		12.0			12.0
Multi-asset investments		5.0			4.0
Cash and Cash Equivalents		1.0			1.0
		100.0	%		100.0	%

Schedule Of Plan Contributions

Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
DB Pension Plans		$	—		$	700
OPEB Plan		—			1
Consumers
DB Pension Plans		$	—		$	682
OPEB Plan		—			1

Schedule Of Expected Benefit Payments

Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:

In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2022		$	185		$	10		$	52
2023		181			10			54
2024		178			10			56
2025		180			10			58
2026		178			9			59
2027-2031		876			45			308
Consumers
2022		$	175		$	7		$	49
2023		171			7			52
2024		169			7			54
2025		170			7			55
2026		169			6			56
2027-2031		830			31			294

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Schedule Of SERP Trust Assets, ABO And Contributions

Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
Trust assets		$	142		$	146
ABO		149			159
Contributions		—			8
Consumers
Trust assets		$	104		$	107
ABO		108			115
Contributions		—			5

Schedule Of Assumptions Used

Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefit plans to determine benefit obligations and net periodic benefit cost:

December 31	2021		2020		2019
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	3.02	%	2.73	%	3.37	%
DB Pension Plan B	2.79		2.41		3.17
DB SERP	2.78		2.40		3.15
OPEB Plan	2.99		2.69		3.32
Rate of compensation increase
DB Pension Plan A	3.60		3.70		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	2.83	%	3.44	%	4.55	%
DB SERP	2.84		3.46		4.58
OPEB Plan	3.03		3.57		4.63
Interest cost discount rate2,3
DB Pension Plan A	1.97		2.92		4.08
DB Pension Plan B	1.70		2.74		3.93
DB SERP	1.72		2.74		3.94
OPEB Plan	1.99		2.88		4.03
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		6.75		7.00
OPEB Plan	6.75		6.75		7.00
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table, with improvement scales MP-2021 for 2021, MP-2020 for 2020, and MP-2019 for 2019. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2021 and 2020 and the RP-2014 Mortality Table for 2019, with improvement scales MP-2020 for 2021, MP-2019 for 2020, and MP-2018 for 2019.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2021. The actual return on the assets of the DB Pension Plans was 12.0 percent in 2021, 13.6 percent in 2020, and 21.0 percent in 2019.

Schedule Of Net Benefit Costs

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefit plans:

In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2021			2020			2019			2021			2020			2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	53		$	50		$	41		$	18		$	16		$	14
Interest cost		63			83			103			23			33			41
Settlement loss		1			1			—			—			—			—
Expected return on plan assets		(208)			(191)			(162)			(109)			(100)			(88)
Amortization of:
Net loss		100			95			50			8			15			26
Prior service cost (credit)		4			1			1			(53)			(56)			(62)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	41		$	33		$	(113)		$	(92)		$	(69)
Consumers
Net periodic cost (credit)
Service cost		$	51		$	49		$	40		$	17		$	15		$	13
Interest cost		59			78			97			23			31			40
Expected return on plan assets		(197)			(181)			(153)			(102)			(93)			(82)
Amortization of:
Net loss		96			90			47			8			15			26
Prior service cost (credit)		4			1			1			(51)			(54)			(61)
Settlement loss		6			2			—			—			—			—
Net periodic cost (credit)		$	19		$	39		$	32		$	(105)		$	(86)		$	(64)

Schedule Of Funded Status Of Retirement Benefit Plans

Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefit plans with their retirement benefit plans’ liabilities:

In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2021			2020				2021			2020			2021			2020
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Service cost		53			50				—			—			18			16
Interest cost		60			79				3			4			23			33
Plan amendments		—			24				—			—			5			—
Actuarial loss (gain)		(108)		1	355		1		(4)			16			(32)		1	39		1
Benefits paid		(201)			(215)				(10)			(10)			(53)			(48)
Benefit obligation at end of period		$	3,070		$	3,266			$	149		$	160		$	1,166		$	1,205
Plan assets at fair value at beginning of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Actual return on plan assets		398			371				—			—			194			182
Company contribution		—			700				10			10			—			1
Actual benefits paid		(201)			(215)				(10)			(10)			(52)			(47)
Plan assets at fair value at end of period		$	3,599		$	3,402			$	—		$	—		$	1,787		$	1,645
Funded status		$	529	2	$	136	2		$	(149)		$	(160)		$	621		$	440
Consumers
Benefit obligation at beginning of period									$	117		$	109		$	1,158		$	1,120
Service cost									—			—			17			15
Interest cost									2			3			23			31
Plan amendments									—			—			5			—
Actuarial loss (gain)									(3)			12			(30)		1	37		1
Benefits paid									(7)			(7)			(51)			(45)
Benefit obligation at end of period									$	109		$	117		$	1,122		$	1,158
Plan assets at fair value at beginning of period									$	—		$	—		$	1,535		$	1,410
Actual return on plan assets									—			—			182			169
Company contribution									7			7			—			1
Actual benefits paid									(7)			(7)			(49)			(45)
Plan assets at fair value at end of period									$	—		$	—		$	1,668		$	1,535
Funded status									$	(109)		$	(117)		$	546		$	377

1The actuarial gains for 2021 for the DB Pension Plans and OPEB Plan were primarily the result of higher discount rates. The actuarial loss for 2020 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $510 million at December 31, 2021 and $138 million at December 31, 2020.

Schedule Of Retirement Benefit Plan Assets (Liabilities)

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	529		$	136
OPEB Plan		621			440
Current liabilities
DB SERP		10			10
Non-current liabilities
DB SERP		139			150
Consumers
Non-current assets
DB Pension Plans		$	510		$	138
OPEB Plan		546			377
Current liabilities
DB SERP		7			7
Non-current liabilities
DB SERP		102			110

Schedule Of Net Periodic Benefit Cost Not Yet Recognized

Presented in the following table are the amounts recognized in regulatory assets, regulatory liabilities, and AOCI that have not been recognized as components of net periodic benefit cost. For additional details on regulatory assets and regulatory liabilities, see Note 2, Regulatory Matters.

In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2021			2020			2021			2020
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss (gain)		94			120			(17)			(10)
Prior service cost (credit)		—			1			(5)			(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	931		$	1,344		$	(76)		$	(8)
Consumers
Regulatory assets (liabilities)
Net loss		$	812		$	1,194		$	136		$	254
Prior service cost (credit)		25			29			(190)			(246)
Regulatory assets (liabilities)		$	837		$	1,223		$	(54)		$	8
AOCI
Net loss		41			47			—			—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	878		$	1,270		$	(54)		$	8

Schedule Of Plan Contributions

Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:

In Millions
Years Ended December 31	2021			2020
CMS Energy, including Consumers
DB Pension Plans		$	—		$	700
OPEB Plan		—			1
Consumers
DB Pension Plans		$	—		$	682
OPEB Plan		—			1

Schedule Of Expected Benefit Payments

Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:

In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2022		$	185		$	10		$	52
2023		181			10			54
2024		178			10			56
2025		180			10			58
2026		178			9			59
2027-2031		876			45			308
Consumers
2022		$	175		$	7		$	49
2023		171			7			52
2024		169			7			54
2025		170			7			55
2026		169			6			56
2027-2031		830			31			294

XML

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Restricted Stock Activity

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

	CMS Energy, including Consumers				Consumers
Year Ended December 31, 2021	Number of Shares	Weighted-Average Grant Date Fair Value per Share			Number of Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	817,357		$	51.68	781,531		$	51.73
Granted
Restricted stock	547,201		43.52		517,141		42.85
Restricted stock units	13,867		54.11		13,093		53.93
Vested
Restricted stock	(408,011)		29.46		(388,009)		29.55
Restricted stock units	(15,577)		48.15		(14,891)		48.09
Forfeited – restricted stock	(22,264)		57.90		(21,780)		58.01
Nonvested at end of period	932,573		$	56.56	887,085		$	56.19

Year Ended December 31, 2021	CMS Energy, including Consumers	Consumers
Granted
Time-lapse awards	118,290	112,128
Market-based awards	143,843	135,638
Performance-based awards	143,843	135,638
Restricted stock units	11,725	11,035
Dividends on market-based awards	15,661	14,890
Dividends on performance-based awards	15,964	15,175
Dividends on restricted stock units	2,142	2,058
Additional market-based shares based on achievement of condition	59,736	56,505
Additional performance-based shares based on achievement of condition	49,864	47,167
Total granted	561,068	530,234

Schedule of Share-based Payment Award, Restricted Stock, Valuation Assumptions

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31	2021		2020		2019
Expected volatility	27.6	%	14.2	%	14.9	%
Expected dividend yield	2.8		2.4		2.8
Risk-free rate	0.2		1.6		2.5

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	43.52		$	45.56		$	43.57
Restricted stock units granted		54.11			49.76			50.35
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	42.85		$	45.53		$	43.57
Restricted stock units granted		53.93			49.70			51.15

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Fair value of shares that vested during the year		$	25		$	22		$	26
Compensation expense recognized		22			11			22
Income tax benefit recognized		1			3			1
Consumers
Fair value of shares that vested during the year		$	24		$	21		$	25
Compensation expense recognized		21			10			21
Income tax benefit recognized		1			3			1

Consumers Energy Company

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule Of Restricted Stock Activity

Presented in the following tables is the activity for restricted stock and restricted stock units under the PISP:

	CMS Energy, including Consumers				Consumers
Year Ended December 31, 2021	Number of Shares	Weighted-Average Grant Date Fair Value per Share			Number of Shares	Weighted-Average Grant Date Fair Value per Share
Nonvested at beginning of period	817,357		$	51.68	781,531		$	51.73
Granted
Restricted stock	547,201		43.52		517,141		42.85
Restricted stock units	13,867		54.11		13,093		53.93
Vested
Restricted stock	(408,011)		29.46		(388,009)		29.55
Restricted stock units	(15,577)		48.15		(14,891)		48.09
Forfeited – restricted stock	(22,264)		57.90		(21,780)		58.01
Nonvested at end of period	932,573		$	56.56	887,085		$	56.19

Year Ended December 31, 2021	CMS Energy, including Consumers	Consumers
Granted
Time-lapse awards	118,290	112,128
Market-based awards	143,843	135,638
Performance-based awards	143,843	135,638
Restricted stock units	11,725	11,035
Dividends on market-based awards	15,661	14,890
Dividends on performance-based awards	15,964	15,175
Dividends on restricted stock units	2,142	2,058
Additional market-based shares based on achievement of condition	59,736	56,505
Additional performance-based shares based on achievement of condition	49,864	47,167
Total granted	561,068	530,234

Schedule of Share-based Payment Award, Restricted Stock, Valuation Assumptions

Presented in the following table are the most significant assumptions used to estimate the fair value of the market-based restricted stock awards:

Years Ended December 31	2021		2020		2019
Expected volatility	27.6	%	14.2	%	14.9	%
Expected dividend yield	2.8		2.4		2.8
Risk-free rate	0.2		1.6		2.5

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value

Presented in the following table is the weighted-average grant-date fair value of all awards under the PISP:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	43.52		$	45.56		$	43.57
Restricted stock units granted		54.11			49.76			50.35
Consumers
Weighted-average grant-date fair value per share
Restricted stock granted		$	42.85		$	45.53		$	43.57
Restricted stock units granted		53.93			49.70			51.15

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

Presented in the following table are amounts related to restricted stock awards and restricted stock units:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Fair value of shares that vested during the year		$	25		$	22		$	26
Compensation expense recognized		22			11			22
Income tax benefit recognized		1			3			1
Consumers
Fair value of shares that vested during the year		$	24		$	21		$	25
Compensation expense recognized		21			10			21
Income tax benefit recognized		1			3			1

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
Years Ended December 31	2021				2020				2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823			$	809			$	764
Income tax expense at statutory rate		173				170				160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39				44				46
TCJA excess deferred taxes1		(50)				(35)				(31)
Production tax credits		(40)				(28)				(20)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Research and development tax credits, net3		(3)				(11)				(2)
Refund of alternative minimum tax sequestration4		—				(9)				—
Other, net		4				(3)				(9)
Income tax expense		$	95			$	115			$	131
Effective tax rate		11.5		%		14.2		%		17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024			$	989			$	928
Income tax expense at statutory rate		215				208				195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54				47				53
TCJA excess deferred taxes1		(50)				(35)				(31)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Production tax credits		(33)				(19)				(12)
Research and development tax credits, net3		(3)				(11)				(2)
Other, net		1				(4)				(5)
Income tax expense		$	156			$	173			$	185
Effective tax rate		15.2		%		17.5		%		19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

Significant Components Of Income Tax Expense

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

Principal Components Of Deferred Income Tax Assets And Liailities

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24
Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041
Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030
General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

Reconciliation Of Beginning And Ending Uncertain Tax Benefits

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—
Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—
Balance at end of period		$	34		$	31		$	34

Consumers Energy Company

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

Presented in the following table is the difference between actual income tax expense on continuing operations and income tax expense computed by applying the statutory U.S. federal income tax rate:

In Millions, Except Tax Rate
Years Ended December 31	2021				2020				2019
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	823			$	809			$	764
Income tax expense at statutory rate		173				170				160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		39				44				46
TCJA excess deferred taxes1		(50)				(35)				(31)
Production tax credits		(40)				(28)				(20)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Research and development tax credits, net3		(3)				(11)				(2)
Refund of alternative minimum tax sequestration4		—				(9)				—
Other, net		4				(3)				(9)
Income tax expense		$	95			$	115			$	131
Effective tax rate		11.5		%		14.2		%		17.1		%
Consumers
Income from continuing operations before income taxes		$	1,024			$	989			$	928
Income tax expense at statutory rate		215				208				195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		54				47				53
TCJA excess deferred taxes1		(50)				(35)				(31)
Accelerated flow-through of regulatory tax benefits2		(28)				(13)				(13)
Production tax credits		(33)				(19)				(12)
Research and development tax credits, net3		(3)				(11)				(2)
Other, net		1				(4)				(5)
Income tax expense		$	156			$	173			$	185
Effective tax rate		15.2		%		17.5		%		19.9		%

1In September 2020, the MPSC authorized Consumers to accelerate the amortization of a regulatory liability associated with unprotected, non‑property-related excess deferred income taxes resulting from the TCJA. The regulatory liability, which was previously scheduled to be amortized through 2029, will now be fully amortized by the end of 2022.

2In September 2020, the MPSC authorized Consumers to accelerate the amortization of income tax benefits associated with the cost to remove gas plant assets. These tax benefits, which were previously scheduled to be amortized through 2025, will now be fully amortized by the end of 2022.

3In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, in 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

4In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, in 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

Significant Components Of Income Tax Expense

Presented in the following table are the significant components of income tax expense on continuing operations:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Current income taxes
Federal		$	(1)		$	(35)		$	(31)
State and local		1			(2)			28
		$	—		$	(37)		$	(3)
Deferred income taxes
Federal		49			100			84
State and local		49			57			29
		$	98		$	157		$	113
Deferred income tax credit		(3)			(5)			21
Tax expense		$	95		$	115		$	131
Consumers
Current income taxes
Federal		$	(13)		$	3		$	107
State and local		15			(7)			41
		$	2		$	(4)		$	148
Deferred income taxes
Federal		103			115			(10)
State and local		54			67			26
		$	157		$	182		$	16
Deferred income tax credit		(3)			(5)			21
Tax expense		$	156		$	173		$	185

Principal Components Of Deferred Income Tax Assets And Liailities

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	332		$	483
Net regulatory tax liability		349			372
Reserves and accruals		32			62
Total deferred income tax assets		$	713		$	917
Valuation allowance		(2)			(1)
Total deferred income tax assets, net of valuation allowance		$	711		$	916
Deferred income tax liabilities
Plant, property, and equipment		$	(2,395)		$	(2,287)
Employee benefits		(399)			(364)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(59)			(51)
Total deferred income tax liabilities		$	(2,921)		$	(2,779)
Total net deferred income tax liabilities		$	(2,210)		$	(1,863)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	349		$	372
Tax loss and credit carryforwards		134			216
Reserves and accruals		24			24
Total deferred income tax assets		$	507		$	612
Deferred income tax liabilities
Plant, property, and equipment		$	(2,341)		$	(2,230)
Employee benefits		(388)			(365)
Securitized costs		(46)			(53)
Gas inventory		(22)			(24)
Other		(50)			(34)
Total deferred income tax liabilities		$	(2,847)		$	(2,706)
Total net deferred income tax liabilities		$	(2,340)		$	(2,094)

Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2021:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
Federal net operating loss carryforwards		$	3	None
State net operating loss carryforwards		55		2030
Local net operating loss carryforwards		3		2024 – 2040
General business credits		264		2034 – 2041
Federal charitable contribution carryforwards		6		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	332
Consumers
Federal net operating loss carryforwards		$	2	None
State net operating loss carryforwards		43		2030
General business credits		83		2034-2041
Federal charitable contribution carryforwards		5		2025
State charitable contribution carryforwards		1		2025
Total tax attributes		$	134

Reconciliation Of Beginning And Ending Uncertain Tax Benefits

Presented in the following table is a reconciliation of the beginning and ending amount of uncertain tax benefits:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Balance at beginning of period		$	25		$	23		$	19
Additions for current-year tax positions		2			1			1
Additions for prior-year tax positions		—			3			3
Reductions for prior-year tax positions		—			(2)			—
Balance at end of period		$	27		$	25		$	23
Consumers
Balance at beginning of period		$	31		$	34		$	28
Additions for current-year tax positions		3			1			1
Additions for prior-year tax positions		—			4			5
Reductions for prior-year tax positions		—			(8)			—
Balance at end of period		$	34		$	31		$	34

XML

Earnings Per Share - CMS Energy (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Basic And Diluted EPS Computations

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on income from continuing operations:

In Millions, Except Per Share Amounts
Years Ended December 31	2021			2020			2019
Income available to common stockholders
Income from continuing operations		$	728		$	694		$	633
Less income (loss) attributable to noncontrolling interests		(23)			(3)			2
Less preferred stock dividends		5			—			—
Income from continuing operations available to common stockholders – basic and diluted		$	746		$	697		$	631
Average common shares outstanding
Weighted-average shares – basic		289.0			285.0			283.0
Add dilutive nonvested stock awards		0.5			0.7			0.7
Add dilutive forward equity sale contracts		—			0.6			0.6
Weighted-average shares – diluted		289.5			286.3			284.3
Income from continuing operations per average common share available to common stockholders
Basic		$	2.58		$	2.45		$	2.23
Diluted		2.58			2.44			2.22

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Revenue (Tables)

12 Months Ended

Dec. 31, 2021

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2019	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,407		$	1,922		$	—		$	6,329
Other		—			—			74			74
Revenue recognized from contracts with customers		$	4,407		$	1,922		$	74		$	6,403
Leasing income		—			—			174			174
Financing income		9			5			—			14
Consumers alternative-revenue programs		23			10			—			33
Total operating revenue – CMS Energy		$	4,439		$	1,937		$	248		$	6,624
Consumers
Consumers utility revenue
Residential		$	1,988		$	1,316					$	3,304
Commercial		1,502			372						1,874
Industrial		669			51						720
Other		248			183						431
Revenue recognized from contracts with customers		$	4,407		$	1,922					$	6,329
Financing income		9			5						14
Alternative-revenue programs		23			10						33
Total operating revenue – Consumers		$	4,439		$	1,937					$	6,376

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

Consumers Energy Company

Disaggregation of Revenue [Line Items]

Disaggregation of Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Year Ended December 31, 2021	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,915		$	2,046		$	—		$	6,961
Other		—			—			114			114
Revenue recognized from contracts with customers		$	4,915		$	2,046		$	114		$	7,075
Leasing income		—			—			194			194
Financing income		10			5			—			15
Consumers alternative-revenue programs		33			12			—			45
Total operating revenue – CMS Energy		$	4,958		$	2,063		$	308		$	7,329
Consumers
Consumers utility revenue
Residential		$	2,402		$	1,396					$	3,798
Commercial		1,573			396						1,969
Industrial		624			54						678
Other		316			200						516
Revenue recognized from contracts with customers		$	4,915		$	2,046					$	6,961
Financing income		10			5						15
Alternative-revenue programs		33			12						45
Total operating revenue – Consumers		$	4,958		$	2,063					$	7,021

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2020	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,348		$	1,809		$	—		$	6,157
Other		—			—			81			81
Revenue recognized from contracts with customers		$	4,348		$	1,809		$	81		$	6,238
Leasing income		—			—			148			148
Financing income		11			6			—			17
Consumers alternative-revenue programs		29			14			—			43
Consumers revenues to be refunded		(16)			(12)			—			(28)
Total operating revenue – CMS Energy		$	4,372		$	1,817		$	229		$	6,418
Consumers
Consumers utility revenue
Residential		$	2,109		$	1,232					$	3,341
Commercial		1,444			337						1,781
Industrial		570			46						616
Other		225			194						419
Revenue recognized from contracts with customers		$	4,348		$	1,809					$	6,157
Financing income		11			6						17
Alternative-revenue programs		29			14						43
Revenues to be refunded		(16)			(12)						(28)
Total operating revenue – Consumers		$	4,372		$	1,817					$	6,189

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

In Millions
Year Ended December 31, 2019	Electric Utility			Gas Utility			Enterprises1			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	4,407		$	1,922		$	—		$	6,329
Other		—			—			74			74
Revenue recognized from contracts with customers		$	4,407		$	1,922		$	74		$	6,403
Leasing income		—			—			174			174
Financing income		9			5			—			14
Consumers alternative-revenue programs		23			10			—			33
Total operating revenue – CMS Energy		$	4,439		$	1,937		$	248		$	6,624
Consumers
Consumers utility revenue
Residential		$	1,988		$	1,316					$	3,304
Commercial		1,502			372						1,874
Industrial		669			51						720
Other		248			183						431
Revenue recognized from contracts with customers		$	4,407		$	1,922					$	6,329
Financing income		9			5						14
Alternative-revenue programs		23			10						33
Total operating revenue – Consumers		$	4,439		$	1,937					$	6,376

1Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities.

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Other Income and Other Expense (Tables)

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Line Items]

Components Of Other Expense

Presented in the following table are the components of other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Other expense
Donations		$	(6)		$	(35)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
Loss on reacquired and extinguished debt		—			(16)			—
All other		(7)			(6)			(4)
Total other expense – CMS Energy		$	(18)		$	(62)		$	(13)
Consumers
Other expense
Donations		$	(6)		$	(33)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
All other		(7)			(5)			(4)
Total other expense – Consumers		$	(18)		$	(43)		$	(13)

Consumers Energy Company

Other Income and Expenses [Line Items]

Components Of Other Expense

Presented in the following table are the components of other expense at CMS Energy and Consumers:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Other expense
Donations		$	(6)		$	(35)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
Loss on reacquired and extinguished debt		—			(16)			—
All other		(7)			(6)			(4)
Total other expense – CMS Energy		$	(18)		$	(62)		$	(13)
Consumers
Other expense
Donations		$	(6)		$	(33)		$	(3)
Civic and political expenditures		(5)			(5)			(6)
All other		(7)			(5)			(4)
Total other expense – Consumers		$	(18)		$	(43)		$	(13)

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Cash And Cash Equivalents (Tables)

12 Months Ended

Dec. 31, 2021

Cash and Cash Equivalents [Line Items]

Schedule Of Cash And Cash Equivalents, Including Restricted Amounts

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Current assets held for sale		—			136
Cash and cash equivalents, including restricted amounts – CMS Energy		$	476		$	185
Consumers
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Cash and cash equivalents, including restricted amounts – Consumers		$	44		$	35

Consumers Energy Company

Cash and Cash Equivalents [Line Items]

Schedule Of Cash And Cash Equivalents, Including Restricted Amounts

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
December 31	2021			2020
CMS Energy, including Consumers
Cash and cash equivalents		$	452		$	32
Restricted cash and cash equivalents		24			17
Current assets held for sale		—			136
Cash and cash equivalents, including restricted amounts – CMS Energy		$	476		$	185
Consumers
Cash and cash equivalents		$	22		$	20
Restricted cash and cash equivalents		22			15
Cash and cash equivalents, including restricted amounts – Consumers		$	44		$	35

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Reportable Segments (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting Information [Line Items]

Schedule Of Financial Information By Reportable Segments

Presented in the following tables is financial information by segment:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Enterprises		308			229			248
Total operating revenue – CMS Energy		$	7,329		$	6,418		$	6,624
Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Total operating revenue – Consumers		$	7,021		$	6,189		$	6,376
CMS Energy, including Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Enterprises		37			20			14
Other reconciling items		1			1			1
Total depreciation and amortization – CMS Energy		$	1,114		$	1,043		$	989
Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Other reconciling items		1			1			1
Total depreciation and amortization – Consumers		$	1,077		$	1,023		$	975

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Income from equity method investees1
Enterprises		$	10		$	5		$	10
Total income from equity method investees – CMS Energy		$	10		$	5		$	10
CMS Energy, including Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Enterprises		6			7			7
Other reconciling items		183			179			157
Total interest charges – CMS Energy		$	500		$	505		$	460
Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Other reconciling items		—			1			1
Total interest charges – Consumers		$	311		$	320		$	297
CMS Energy, including Consumers
Income tax expense (benefit)
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Enterprises		(2)			(4)			2
Other reconciling items		(59)			(54)			(56)
Total income tax expense – CMS Energy		$	95		$	115		$	131
Consumers
Income tax expense
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Total income tax expense – Consumers		$	156		$	173		$	185

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Enterprises		23			36			33
Other reconciling items		458			(96)			(95)
Total net income available to common stockholders – CMS Energy		$	1,348		$	755		$	680
Consumers
Net income (loss) available to common stockholder
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Other reconciling items		(1)			(1)			(1)
Total net income available to common stockholder – Consumers		$	866		$	814		$	741
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Enterprises		1,122			1,113			405
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – CMS Energy		$	29,893		$	27,870		$	25,368
Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – Consumers		$	28,771		$	26,757		$	24,963
CMS Energy, including Consumers
Investments in equity method investees1
Enterprises		$	71		$	70		$	71
Total investments in equity method investees – CMS Energy		$	71		$	70		$	71

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Total assets
Electric utility2		$	16,493		$	15,829		$	14,911
Gas utility2		10,517			9,429			8,659
Enterprises		1,312			1,276			527
Other reconciling items		431			3,132			2,740
Total assets – CMS Energy		$	28,753		$	29,666		$	26,837
Consumers
Total assets
Electric utility2		$	16,555		$	15,893		$	14,973
Gas utility2		10,564			9,477			8,706
Other reconciling items		21			29			20
Total assets – Consumers		$	27,140		$	25,399		$	23,699
CMS Energy, including Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Enterprises		17			108			5
Other reconciling items		2			1			1
Total capital expenditures – CMS Energy		$	2,161		$	2,275		$	2,139
Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Other reconciling items		2			1			1
Total capital expenditures – Consumers		$	2,144		$	2,167		$	2,134

1Consumers had no significant equity method investments.

2Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

3Amounts include assets placed under finance lease.

4Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

Consumers Energy Company

Segment Reporting Information [Line Items]

Schedule Of Financial Information By Reportable Segments

Presented in the following tables is financial information by segment:

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Enterprises		308			229			248
Total operating revenue – CMS Energy		$	7,329		$	6,418		$	6,624
Consumers
Operating revenue
Electric utility		$	4,958		$	4,372		$	4,439
Gas utility		2,063			1,817			1,937
Total operating revenue – Consumers		$	7,021		$	6,189		$	6,376
CMS Energy, including Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Enterprises		37			20			14
Other reconciling items		1			1			1
Total depreciation and amortization – CMS Energy		$	1,114		$	1,043		$	989
Consumers
Depreciation and amortization
Electric utility		$	772		$	739		$	713
Gas utility		304			283			261
Other reconciling items		1			1			1
Total depreciation and amortization – Consumers		$	1,077		$	1,023		$	975

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Income from equity method investees1
Enterprises		$	10		$	5		$	10
Total income from equity method investees – CMS Energy		$	10		$	5		$	10
CMS Energy, including Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Enterprises		6			7			7
Other reconciling items		183			179			157
Total interest charges – CMS Energy		$	500		$	505		$	460
Consumers
Interest charges
Electric utility		$	207		$	217		$	213
Gas utility		104			102			83
Other reconciling items		—			1			1
Total interest charges – Consumers		$	311		$	320		$	297
CMS Energy, including Consumers
Income tax expense (benefit)
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Enterprises		(2)			(4)			2
Other reconciling items		(59)			(54)			(56)
Total income tax expense – CMS Energy		$	95		$	115		$	131
Consumers
Income tax expense
Electric utility		$	117		$	115		$	134
Gas utility		39			58			51
Total income tax expense – Consumers		$	156		$	173		$	185

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Enterprises		23			36			33
Other reconciling items		458			(96)			(95)
Total net income available to common stockholders – CMS Energy		$	1,348		$	755		$	680
Consumers
Net income (loss) available to common stockholder
Electric utility		$	565		$	554		$	509
Gas utility		302			261			233
Other reconciling items		(1)			(1)			(1)
Total net income available to common stockholder – Consumers		$	866		$	814		$	741
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Enterprises		1,122			1,113			405
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – CMS Energy		$	29,893		$	27,870		$	25,368
Consumers
Plant, property, and equipment, gross
Electric utility2		$	18,147		$	17,155		$	16,158
Gas utility2		10,601			9,581			8,785
Other reconciling items		23			21			20
Total plant, property, and equipment, gross – Consumers		$	28,771		$	26,757		$	24,963
CMS Energy, including Consumers
Investments in equity method investees1
Enterprises		$	71		$	70		$	71
Total investments in equity method investees – CMS Energy		$	71		$	70		$	71

In Millions
Years Ended December 31	2021			2020			2019
CMS Energy, including Consumers
Total assets
Electric utility2		$	16,493		$	15,829		$	14,911
Gas utility2		10,517			9,429			8,659
Enterprises		1,312			1,276			527
Other reconciling items		431			3,132			2,740
Total assets – CMS Energy		$	28,753		$	29,666		$	26,837
Consumers
Total assets
Electric utility2		$	16,555		$	15,893		$	14,973
Gas utility2		10,564			9,477			8,706
Other reconciling items		21			29			20
Total assets – Consumers		$	27,140		$	25,399		$	23,699
CMS Energy, including Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Enterprises		17			108			5
Other reconciling items		2			1			1
Total capital expenditures – CMS Energy		$	2,161		$	2,275		$	2,139
Consumers
Capital expenditures3
Electric utility4		$	1,153		$	1,281		$	1,162
Gas utility4		989			885			971
Other reconciling items		2			1			1
Total capital expenditures – Consumers		$	2,144		$	2,167		$	2,134

1Consumers had no significant equity method investments.

2Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

3Amounts include assets placed under finance lease.

4Amounts include a portion of Consumers’ capital expenditures for plant and equipment attributable to both the electric and gas utility businesses.

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Related Party Transactions - Consumers (Tables)

12 Months Ended

Dec. 31, 2021

Consumers Energy Company

Related Party Transaction [Line Items]

Schedule of Related Party Transactions, by Related Party Table

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

In Millions
Description	Related Party	2021			2020			2019
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	77		$	64		$	75

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Variable Interest Entities (Tables)

12 Months Ended

Dec. 31, 2021

Variable Interest Entities [Abstract]

Schedule of Variable Interest Entities

Presented in the following table are the carrying values of the VIEs’ assets and liabilities included on CMS Energy’s consolidated balance sheets:

In Millions
December 31	2021			2020
Current
Cash and cash equivalents		$	20		$	7
Accounts receivable		3			5
Prepayments and other current assets		1			1
Non-current
Plant, property, and equipment, net		671			692
Total assets1		$	695		$	705
Current
Accounts payable		$	15		$	3
Non-current
Asset retirement obligations		20			19
Total liabilities		$	35		$	22

1Assets may be used only to meet VIEs’ obligations and commitments.

Presented in the following table is information about these partnerships:

Name	Nature of the Entity	Nature of CMS Energy’s Involvement
T.E.S. Filer City	Coal-fueled power generator	Long-term PPA between partnership and Consumers
		Employee assignment agreement
Grayling	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Genesee	Wood waste-fueled power generator	Long-term PPA between partnership and Consumers
		Reduced dispatch agreement with Consumers1
		Operating and management contract
Craven	Wood waste-fueled power generator	Operating and management contract

1Reduced dispatch agreements allow the facilities to be dispatched based on the market price of power compared with the cost of production of the plants. This results in fuel cost savings that each partnership shares with Consumers’ customers.

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Exit Activities and Discontinued Operations - (Tables)

12 Months Ended

Dec. 31, 2021

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Retention Benefit Liability Roll Forward

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
Years Ended December 31	2021			2020
Retention benefit liability at beginning of period		$	11		$	4
Costs incurred and charged to maintenance and other operating expenses		—			13
Costs deferred as a regulatory asset		7			—
Costs incurred and capitalized		1			2
Costs paid or settled		(5)			(8)
Retention benefit liability at the end of the period1		$	14		$	11

1Includes current portion of other liabilities of $5 million at December 31, 2021 and $3 million at December 31, 2020.

Schedule of Income, Assets, and Liabilities from Discontinued Operations

The table below presents the financial results of EnerBank included in income from discontinued operations:

In Millions
Years Ended December 31	2021			2020			2019
Operating revenue		$	209		$	262		$	221
Expenses
Operating expenses		60			130			97
Interest expense		34			56			59
Income before income taxes		$	115		$	76		$	65
Gain on sale		657			—			—
Income from discontinued operations before income taxes		$	772		$	76		$	65
Income tax expense		170			18			16
Income from discontinued operations, net of tax		$	602		$	58		$	49

The table below presents the aggregate carrying amounts for the major classes of assets and liabilities held for sale related to EnerBank:

In Millions
December 31	2020
Assets
Current
Cash and cash equivalents		$	136
Accounts receivable and other current assets		18
Notes receivable, less allowance of $32		275
Total current assets		$	429
Non‑current
Plant, property, and equipment, net		$	22
Notes receivable, less allowance of $91		2,612
Other non‑current assets		46
Total non‑current assets		$	2,680
Total assets		$	3,109
Liabilities
Current
Current portion of long-term debt		$	915
Accounts payable and other current liabilities		38
Total current liabilities		$	953
Non‑current
Long-term debt		$	1,890
Other non‑current liabilities		4
Total non‑current liabilities		$	1,894
Total liabilities		$	2,847

Consumers Energy Company

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Retention Benefit Liability Roll Forward

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
Years Ended December 31	2021			2020
Retention benefit liability at beginning of period		$	11		$	4
Costs incurred and charged to maintenance and other operating expenses		—			13
Costs deferred as a regulatory asset		7			—
Costs incurred and capitalized		1			2
Costs paid or settled		(5)			(8)
Retention benefit liability at the end of the period1		$	14		$	11

1Includes current portion of other liabilities of $5 million at December 31, 2021 and $3 million at December 31, 2020.

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Quarterly Financial And Common Stock Information (Tables)

12 Months Ended

Dec. 31, 2021

Quarterly Financial Data [Abstract]

Schedule of Quarterly Financial Information Table

In Millions, Except Per Share Amounts
	2021
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	2,013		$	1,558		$	1,725		$	2,033
Operating income		430			252			260			204
Income From Continuing Operations		308			153			153			114
Income From Discontinued Operations, Net of Tax		34			18			30			520
Net income		342			171			183			634
Loss attributable to noncontrolling interests		(7)			(5)			(6)			(5)
Net Income Attributable to CMS Energy		349			176			189			639
Preferred Stock Dividends		—			—			3			2
Net income available to common stockholders		349			176			186			637
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Basic earnings per average common share1		1.21			0.61			0.64			2.20
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		1.09			0.55			0.54			0.40
Income from discontinued operations per average common share available to common stockholders1		0.12			0.06			0.10			1.80
Diluted earnings per average common share1		1.21			0.61			0.64			2.20

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

In Millions, Except Per Share Amounts
	2020
Three Months Ended	March 31			June 30			September 30			December 31
CMS Energy, including Consumers
Operating revenue		$	1,802		$	1,382		$	1,507		$	1,727
Operating income		335			248			340			307
Income From Continuing Operations		229			129			198			138
Income From Discontinued Operations, Net of Tax		14			8			12			24
Net income		243			137			210			162
Income (loss) attributable to noncontrolling interests		—			1			(8)			4
Net income available to common stockholders		243			136			218			158
Basic earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.81			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Basic earnings per average common share1		0.86			0.48			0.76			0.55
Diluted earnings per average common share
Income from continuing operations per average common share available to common stockholders1		0.80			0.45			0.72			0.47
Income from discontinued operations per average common share available to common stockholders1		0.05			0.03			0.04			0.08
Diluted earnings per average common share1		0.85			0.48			0.76			0.55

1The sum of the quarters may not equal annual EPS due to changes in the number of shares outstanding.

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Regulatory Matters (Schedule Of Regulatory Assets and Liabilities) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Public Utilities, General Disclosures [Line Items]
Regulatory assets, current	$ 46	$ 42
Regulatory assets, noncurrent	2,259	2,653
Regulatory liabilities, current	146	151
Regulatory liability, noncurrent	3,802	3,744
Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, current	46	42
Regulatory assets, noncurrent	2,259	2,653
Total regulatory assets	2,305	2,695
Regulatory liabilities, current	146	151
Regulatory liability, noncurrent	3,802	3,744
Total regulatory liabilities	3,948	3,895
Income taxes, net | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	138	105
Regulatory liability, noncurrent	1,297	1,419
Reserve for customer refunds | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	2	28
Voluntary transmission asset sale gain share | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	0	14
Other | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	6	4
Regulatory liability, noncurrent	16	11
Postretirement benefits | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability, noncurrent	54	0
Cost of removal | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability, noncurrent	2,375	2,245
Renewable energy grant | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability, noncurrent	47	49
Renewable energy plan | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability, noncurrent	13	9
ARO | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability, noncurrent	0	11
Energy Waste Reduction Plan Incentive | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, current	42	34
Regulatory assets, noncurrent	46	42
Deferred capital spending | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, current	0	6
Other | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, current	4	2
Regulatory assets, noncurrent	19	11
Postretirement benefits | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	837	1,231
Costs of coal-fueled electric generating units to be retired | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	678	678
ARO | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	247	216
Securitized costs | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	193	221
Manufactured Gas Plant | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	112	120
Unamortized Loss On Reacquired Debt | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	104	108
Energy Waste Reduction Plan | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	13	16
Demand response program | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	$ 10	$ 10

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Regulatory Matters (Narrative) (Details) $ in Millions	1 Months Ended			3 Months Ended								12 Months Ended
	Dec. 31, 2021 USD ($) coal_fueled_electric_generating_unit site	Jul. 31, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) coal_fueled_electric_generating_unit site	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2021 USD ($) coal_fueled_electric_generating_unit site	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2016 site	Dec. 31, 2015 site	Dec. 31, 2013 USD ($)	Jan. 31, 2022 USD ($)	Oct. 31, 2021 USD ($)
Public Utilities, General Disclosures [Line Items]
Revenue				$ 2,033	$ 1,725	$ 1,558	$ 2,013	$ 1,727	$ 1,507	$ 1,382	$ 1,802	$ 7,329		$ 6,418		$ 6,624
Regulatory liabilities, current	$ 146			146				151				146		151
Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Revenue												$ 7,021		6,189		6,376
Number of units retired | site												10
Regulatory liabilities, current	$ 146			$ 146				151				$ 146		151
Reduction in depreciation expense												1,077		1,023		975
Plant additions												2,400		2,000
Purchased and interchange power												1,599		1,454		1,470
Cost of gas sold												$ 726		568		754
Costs of coal-fueled electric generating units to be retired | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory Assets, Number Of Units | coal_fueled_electric_generating_unit	2			2								2
Coal-Fueled Electric Generation | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Number of units retired | site																	7
Gas-Fueled Electric Generation | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Number of units retired | site																		3
Energy Waste Reduction Plan Incentive | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Authorized recovery collection																					$ 42
Revenue												$ 46		42
Requested recovery/collection	$ 46			$ 46								46
Electric Rate Case | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Annual rate increase requested			$ 225
Rate of return on equity requested			10.50%
Annual rate increase requested, amended		$ 201
Annual rate increase authorized	$ 27
Rate of return on equity authorized	9.90%
Reduction in depreciation expense	$ (27)
Impairment charge	4											41
Assessment of probable loss	11			11								11
Plant additions												$ 23
Held-for-sale fleet assets	15
Electric Rate Case | Consumers Energy Company | Subsequent Event
Public Utilities, General Disclosures [Line Items]
Recommended disallowed costs																				$ 11
PSCR overrecoveries/underrecoveries | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Purchased and interchange power														1,800		1,900
Over (under) recovery authorized by the MPSC								(4)						(4)		$ 18
GCR underrecoveries | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Over (under) recovery authorized by the MPSC			$ 1				$ 1				$ 6		$ 1		$ 6
Cost of gas sold													$ 400		$ 500
Renewable energy grant | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Proceeds from government grant																			$ 69
Income Taxes Subject To Normalization | Gas Rate Case Tax Reform Rate Change | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability remaining book life												44 years
Income Taxes Subject To Normalization | Electric Rate Case Tax Reform Rate Change | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liability remaining book life												27 years
Reserve for customer refunds | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	2			2				28				$ 2		28
Voluntary transmission asset sale gain share | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities, current	$ 0			$ 0				$ 14				$ 0		$ 14
Manufactured Gas Plant | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Number of former MGPs | site	23			23								23
Regulatory asset collection period												10 years

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Regulatory Matters (Schedule Of Assets and Liabilities for PSCR And GCR Over/(Under) Recoveries) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Public Utilities, General Disclosures [Line Items]
Accrued rate refunds	$ 12	$ 20
Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Accounts receivable and accrued revenue	25	0
Accrued rate refunds	12	20
Consumers Energy Company | PSCR overrecoveries/underrecoveries
Public Utilities, General Disclosures [Line Items]
Accrued rate refunds	12	5
Consumers Energy Company | GCR overrecoveries/underrecoveries
Public Utilities, General Disclosures [Line Items]
Accounts receivable and accrued revenue	25	0
Accrued rate refunds	$ 0	$ 15

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Contingencies and Commitments (Contingencies And Commitments) (Details) $ in Thousands	1 Months Ended		3 Months Ended								12 Months Ended
	Sep. 30, 2020 USD ($)	May 31, 2020 USD ($)	Dec. 31, 2021 USD ($) site	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2021 USD ($) site	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Loss Contingencies [Line Items]
Regulatory assets			$ 2,259,000				$ 2,653,000				$ 2,259,000		$ 2,653,000
Operating Revenue			2,033,000	$ 1,725,000	$ 1,558,000	$ 2,013,000	1,727,000	$ 1,507,000	$ 1,382,000	$ 1,802,000	7,329,000		6,418,000		$ 6,624,000
Consumers Energy Company
Loss Contingencies [Line Items]
Regulatory assets			2,259,000				2,653,000				2,259,000		2,653,000
Cost of gas sold											726,000		568,000		754,000
Plant additions											2,400,000		2,000,000
Maintenance and other operating expenses											(1,531,000)		(1,224,000)		(1,275,000)
Operating Revenue											7,021,000		6,189,000		$ 6,376,000
Consumers Energy Company | Manufactured Gas Plant
Loss Contingencies [Line Items]
Regulatory assets			112,000				$ 120,000				112,000		$ 120,000
Consumers Energy Company | GCR underrecoveries
Loss Contingencies [Line Items]
Cost of gas sold												$ 400,000		$ 500,000
Bay Harbor
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			$ 45,000								$ 45,000
Discounted projected costs rate			4.34%								4.34%
Accrual for environmental loss contingencies, inflation rate			1.00%								1.00%
Remaining undiscounted obligation amount			$ 57,000								$ 57,000
CERCLA Liability | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			3,000								3,000
CERCLA Liability | Minimum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs			3,000								3,000
CERCLA Liability | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs			8,000								8,000
Manufactured Gas Plant | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			$ 57,000								$ 57,000
Discounted projected costs rate			2.57%								2.57%
Accrual for environmental loss contingencies, inflation rate			2.50%								2.50%
Remaining undiscounted obligation amount			$ 61,000								$ 61,000
Number of former MGPs | site			23								23
Regulatory asset collection period											10 years
Electric Utility | NREPA | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			$ 2,000								$ 2,000
Electric Utility | NREPA | Minimum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs			2,000								2,000
Electric Utility | NREPA | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs			4,000								4,000
Gas Utility | NREPA | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			1,000								1,000
Gas Utility | NREPA | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies			3,000								3,000
Equatorial Guinea Tax Claim
Loss Contingencies [Line Items]
Foreign government tax claim on sale			152,000								152,000
Civil Case, Consumers V. MPSC Staff | Consumers Energy Company
Loss Contingencies [Line Items]
Civil penalty		$ 10
Ray Compressor Station | Consumers Energy Company
Loss Contingencies [Line Items]
Plant additions											17,000
Insurance recoveries			$ 13,000								13,000
Ray Compressor Station | Consumers Energy Company | Insurance Recoveries
Loss Contingencies [Line Items]
Reduction to plant, property and equipment											6,000
Maintenance and other operating expenses											3,000
Operating Revenue											$ 4,000
Ray Compressor Station | Consumers Energy Company | GCR underrecoveries
Loss Contingencies [Line Items]
Cost of gas sold	$ 7,000

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Contingencies and Commitments (Expected Remediation Cost By Year) (Details) $ in Millions	Dec. 31, 2021 USD ($)
Bay Harbor
Site Contingency [Line Items]
2022	$ 4
2023	4
2024	4
2025	4
2026	4
Manufactured Gas Plant | Consumers Energy Company
Site Contingency [Line Items]
2022	3
2023	9
2024	24
2025	11
2026	$ 1

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Contingencies and Commitments (Guarantees) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) $ / MW $ / MWh MW	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Guarantees And Other Contingencies [Line Items]
Total	$ 12,473
2022	2,317
2023	2,404
2024	1,174
2025	1,348
2026	642
Beyond 2026	4,588
Other
Guarantees And Other Contingencies [Line Items]
Total	4,445
2022	1,489
2023	1,657
2024	412
2025	639
2026	36
Beyond 2026	$ 212
Variable Interest Entity, Primary Beneficiary | Aviator Wind Class B Membership
Guarantees And Other Contingencies [Line Items]
Ownership percentage	49.00%
Consumers Energy Company
Guarantees And Other Contingencies [Line Items]
Total	$ 11,978
2022	2,209
2023	2,343
2024	1,126
2025	1,303
2026	618
Beyond 2026	$ 4,379
Consumers Energy Company | Palisades Power Purchase Agreement | Financing Obligation
Guarantees And Other Contingencies [Line Items]
Annual average capacity (in MW) | MW	798
Consumers Energy Company | Total PPAs
Guarantees And Other Contingencies [Line Items]
Total	$ 8,028
2022	828
2023	747
2024	762
2025	709
2026	606
Beyond 2026	4,376
Consumers Energy Company | Other
Guarantees And Other Contingencies [Line Items]
Total	3,950
2022	1,381
2023	1,596
2024	364
2025	594
2026	12
Beyond 2026	3
Consumers Energy Company | MCV PPA
Guarantees And Other Contingencies [Line Items]
Total	2,204
2022	349
2023	348
2024	346
2025	306
2026	231
Beyond 2026	$ 624
PPA minimum quantity required | MW	1,240
PPA fixed energy charge per MWh, on-peak (in dollars per MWh) | $ / MWh	6.30
PPA fixed energy charge per MWh, off-peak (in dollars per MWh) | $ / MWh	6.00
Annual contribution to renewable resources program by counterparty	$ 5
Purchases	$ 348	$ 298	$ 318
Consumers Energy Company | MCV PPA | Year End Through March 2025
Guarantees And Other Contingencies [Line Items]
PPA capacity charge per MWh (in dollars per MWh) | $ / MW	10.14
Consumers Energy Company | MCV PPA | March 2025 Through Termination
Guarantees And Other Contingencies [Line Items]
PPA capacity charge per MWh (in dollars per MWh) | $ / MW	5.00
Consumers Energy Company | Palisades PPA
Guarantees And Other Contingencies [Line Items]
Total	$ 116
2022	116
2023	0
2024	0
2025	0
2026	0
Beyond 2026	0
Purchases	413	403	395
Consumers Energy Company | Related-party PPAs
Guarantees And Other Contingencies [Line Items]
Total	342
2022	65
2023	65
2024	65
2025	47
2026	29
Beyond 2026	71
Consumers Energy Company | Other PPAs
Guarantees And Other Contingencies [Line Items]
Total	5,366
2022	298
2023	334
2024	351
2025	356
2026	346
Beyond 2026	3,681
Purchases	$ 338	$ 327	$ 336
Guarantees
Guarantees And Other Contingencies [Line Items]
Expiration Date	indefinite
Maximum Obligation	$ 30
Carrying Amount	$ 0
Guarantees | Consumers Energy Company
Guarantees And Other Contingencies [Line Items]
Expiration Date	indefinite
Maximum Obligation	$ 30
Carrying Amount	$ 0
Indemnification Agreement From Purchase Of Variable Interest Entity
Guarantees And Other Contingencies [Line Items]
Expiration Date	indefinite
Maximum Obligation	$ 314
Carrying Amount	$ 0
Indemnity Obligations From Stock And Asset Sales Agreements
Guarantees And Other Contingencies [Line Items]
Expiration Date	indefinite
Maximum Obligation	$ 225
Carrying Amount	4
Tax And Other Indemnity Obligations | Consumers Energy Company
Guarantees And Other Contingencies [Line Items]
Carrying Amount	$ 1

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Financings and Capitalization (Summary of Long-Term Debt) (Details) - USD ($) $ in Millions			1 Months Ended	12 Months Ended
	Dec. 01, 2030	Jun. 01, 2030	Oct. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Total principal amount outstanding				$ 12,568	$ 12,467
Current amounts				(373)	(571)
Unamortized discounts				(31)	(33)
Unamortized issuance costs				(118)	(119)
Long-term debt				12,046	11,744
Consumers Energy Company
Debt Instrument [Line Items]
Total principal amount outstanding				8,505	8,197
Current amounts				(365)	(364)
Unamortized discounts				(28)	(29)
Unamortized issuance costs				(62)	(62)
Long-term debt				8,050	7,742
First Mortgage Bonds | Consumers Energy Company
Debt Instrument [Line Items]
Total principal amount outstanding				$ 8,197	7,897
First Mortgage Bonds | Consumers Energy Company | 0.350% First Mortgage Bonds Due 2023
Debt Instrument [Line Items]
Interest rate				0.35%
Total principal amount outstanding				$ 300	300
First Mortgage Bonds | Consumers Energy Company | 3.375% First Mortgage Bonds Due 2023
Debt Instrument [Line Items]
Interest rate				3.375%
Total principal amount outstanding				$ 325	325
First Mortgage Bonds | Consumers Energy Company | 3.125% First Mortgage Bonds Due 2024
Debt Instrument [Line Items]
Interest rate				3.125%
Total principal amount outstanding				$ 250	250
First Mortgage Bonds | Consumers Energy Company | 3.190% First Mortgage Bonds Due 2024
Debt Instrument [Line Items]
Interest rate				3.19%
Total principal amount outstanding				$ 52	52
First Mortgage Bonds | Consumers Energy Company | 3.680% First Mortgage Bonds Due 2027
Debt Instrument [Line Items]
Interest rate				3.68%
Total principal amount outstanding				$ 100	100
First Mortgage Bonds | Consumers Energy Company | 3.390 % First Mortgage Bonds Due 2027
Debt Instrument [Line Items]
Interest rate				3.39%
Total principal amount outstanding				$ 35	35
First Mortgage Bonds | Consumers Energy Company | 3.800% First Mortgage Bonds Due 2028
Debt Instrument [Line Items]
Interest rate				3.80%
Total principal amount outstanding				$ 300	300
First Mortgage Bonds | Consumers Energy Company | 3.180% First Mortgage Bonds Due 2032
Debt Instrument [Line Items]
Interest rate				3.18%
Total principal amount outstanding				$ 100	100
First Mortgage Bonds | Consumers Energy Company | 5.800 % First Mortgage Bonds Due 2035
Debt Instrument [Line Items]
Interest rate				5.80%
Total principal amount outstanding				$ 175	175
First Mortgage Bonds | Consumers Energy Company | 3.520% First Mortgage Bonds Due 2037
Debt Instrument [Line Items]
Interest rate				3.52%
Total principal amount outstanding				$ 335	335
First Mortgage Bonds | Consumers Energy Company | 4.010% First Mortgage Bonds Due 2038
Debt Instrument [Line Items]
Interest rate				4.01%
Total principal amount outstanding				$ 215	215
First Mortgage Bonds | Consumers Energy Company | 6.170% First Mortgage Bonds Due 2040
Debt Instrument [Line Items]
Interest rate				6.17%
Total principal amount outstanding				$ 50	50
First Mortgage Bonds | Consumers Energy Company | 4.970% First Mortgage Bonds Due 2040
Debt Instrument [Line Items]
Interest rate				4.97%
Total principal amount outstanding				$ 50	50
First Mortgage Bonds | Consumers Energy Company | 4.310% First Mortgage Bonds Due 2042
Debt Instrument [Line Items]
Interest rate				4.31%
Total principal amount outstanding				$ 263	263
First Mortgage Bonds | Consumers Energy Company | 3.950% First Mortgage Bonds Due 2043
Debt Instrument [Line Items]
Interest rate				3.95%
Total principal amount outstanding				$ 425	425
First Mortgage Bonds | Consumers Energy Company | 4.100% First Mortgage Bonds Due 2045
Debt Instrument [Line Items]
Interest rate				4.10%
Total principal amount outstanding				$ 250	250
First Mortgage Bonds | Consumers Energy Company | 3.250% First Mortgage Bonds Due 2046
Debt Instrument [Line Items]
Interest rate				3.25%
Total principal amount outstanding				$ 450	450
First Mortgage Bonds | Consumers Energy Company | 3.950% First Mortgage Bonds Due 2047
Debt Instrument [Line Items]
Interest rate				3.95%
Total principal amount outstanding				$ 350	350
First Mortgage Bonds | Consumers Energy Company | 4.050% First Mortgage Bonds Due 2048
Debt Instrument [Line Items]
Interest rate				4.05%
Total principal amount outstanding				$ 550	550
First Mortgage Bonds | Consumers Energy Company | 4.350% First Mortgage Bonds Due 2049
Debt Instrument [Line Items]
Interest rate				4.35%
Total principal amount outstanding				$ 550	550
First Mortgage Bonds | Consumers Energy Company | 3.750% First Mortgage Bonds Due 2050
Debt Instrument [Line Items]
Interest rate				3.75%
Total principal amount outstanding				$ 300	300
First Mortgage Bonds | Consumers Energy Company | 3.100% First Mortgage Bonds Due 2050
Debt Instrument [Line Items]
Interest rate				3.10%
Total principal amount outstanding				$ 550	550
First Mortgage Bonds | Consumers Energy Company | 3.500% First Mortgage Bonds Due 2051
Debt Instrument [Line Items]
Interest rate				3.50%
Total principal amount outstanding				$ 575	575
First Mortgage Bonds | Consumers Energy Company | 2.650% First Mortgage Bonds Due 2052
Debt Instrument [Line Items]
Interest rate				2.65%
Total principal amount outstanding				$ 300	0
First Mortgage Bonds | Consumers Energy Company | 3.860% First Mortgage Bonds Due 2052
Debt Instrument [Line Items]
Interest rate				3.86%
Total principal amount outstanding				$ 50	50
First Mortgage Bonds | Consumers Energy Company | 4.280% First Mortgage Bonds Due 2057
Debt Instrument [Line Items]
Interest rate				4.28%
Total principal amount outstanding				$ 185	185
First Mortgage Bonds | Consumers Energy Company | 2.500% First Mortgage Bonds Due 2060
Debt Instrument [Line Items]
Interest rate				2.50%
Total principal amount outstanding				$ 525	525
First Mortgage Bonds | Consumers Energy Company | 4.350% First Mortgage Bonds Due 2064
Debt Instrument [Line Items]
Interest rate				4.35%
Total principal amount outstanding				$ 250	250
First Mortgage Bonds | Consumers Energy Company | Variable Rate First Mortgage Bonds Due 2069
Debt Instrument [Line Items]
Total principal amount outstanding				76	76
First Mortgage Bonds | Consumers Energy Company | Variable Rate First Mortgage Bonds Due 2070
Debt Instrument [Line Items]
Total principal amount outstanding				134	134
First Mortgage Bonds | Consumers Energy Company | Variable Rate First Mortgage Bonds Due 2070
Debt Instrument [Line Items]
Total principal amount outstanding				$ 127	$ 127
First Mortgage Bonds | Consumers Energy Company | Variable Rate First Mortgage Bonds
Debt Instrument [Line Items]
Basis spread on variable rate				0.30%
Interest rate at period end				0.00%	0.00%
Tax Exempt Revenue Bonds | Consumers Energy Company
Debt Instrument [Line Items]
Total principal amount outstanding				$ 110	$ 75
Tax Exempt Revenue Bonds | Consumers Energy Company | 0.875% Tax Exempt Revenue Bonds Due 2035
Debt Instrument [Line Items]
Interest rate				0.875%
Total principal amount outstanding				$ 35	0
Tax Exempt Revenue Bonds | Consumers Energy Company | 1.800% Tax Exempt Revenue Bonds Due 2049
Debt Instrument [Line Items]
Interest rate				1.80%
Total principal amount outstanding				$ 75	$ 75
Securitization bonds | Consumers Energy Company | Securitization Bonds
Debt Instrument [Line Items]
Weighted average interest rate				3.29%	3.25%
Total principal amount outstanding				$ 198	$ 225
CMS Energy
Debt Instrument [Line Items]
Total principal amount outstanding				3,985	4,185
Long-term debt				3,928	3,926
CMS Energy | Senior notes
Debt Instrument [Line Items]
Total principal amount outstanding				$ 1,975	1,975
CMS Energy | Senior notes | 3.875% Senior Notes Due 2024
Debt Instrument [Line Items]
Interest rate				3.875%
Total principal amount outstanding				$ 250	250
CMS Energy | Senior notes | 3.600% Senior Notes Due 2025
Debt Instrument [Line Items]
Interest rate				3.60%
Total principal amount outstanding				$ 250	250
CMS Energy | Senior notes | 3.000% Senior Notes Due 2026
Debt Instrument [Line Items]
Interest rate				3.00%
Total principal amount outstanding				$ 300	300
CMS Energy | Senior notes | 2.950% Senior Notes Due 2027
Debt Instrument [Line Items]
Interest rate				2.95%
Total principal amount outstanding				$ 275	275
CMS Energy | Senior notes | 3.450% Senior Notes Due 2027
Debt Instrument [Line Items]
Interest rate				3.45%
Total principal amount outstanding				$ 350	350
CMS Energy | Senior notes | 4.700% Senior Notes Due 2043
Debt Instrument [Line Items]
Interest rate				4.70%
Total principal amount outstanding				$ 250	250
CMS Energy | Senior notes | 4.875% Senior Notes Due 2044
Debt Instrument [Line Items]
Interest rate				4.875%
Total principal amount outstanding				$ 300	300
CMS Energy | Term loan facility | Term Loan Facility Due 2021
Debt Instrument [Line Items]
Total principal amount outstanding				0	200
CMS Energy | Junior subordinated notes
Debt Instrument [Line Items]
Total principal amount outstanding				$ 2,010	2,010
CMS Energy | Junior subordinated notes | 4.750% Junior Subordinated Notes Due 2050
Debt Instrument [Line Items]
Interest rate				4.75%
Total principal amount outstanding				$ 500	500
CMS Energy | Junior subordinated notes | 3.750% Junior Subordinated Notes Due 2050
Debt Instrument [Line Items]
Interest rate				3.75%
Total principal amount outstanding				$ 400	400
CMS Energy | Junior subordinated notes | 5.625% Junior Subordinated Notes Due 2078
Debt Instrument [Line Items]
Interest rate				5.625%
Total principal amount outstanding				$ 200	200
CMS Energy | Junior subordinated notes | 5.875% Junior Subordinated Notes Due 2078
Debt Instrument [Line Items]
Interest rate				5.875%
Total principal amount outstanding				$ 280	280
CMS Energy | Junior subordinated notes | 5.875% Junior Subordinated Notes Due 2079
Debt Instrument [Line Items]
Interest rate				5.875%
Total principal amount outstanding				$ 630	630
CMS Enterprises Including Subsidiaries | Term loan facility | Term Loan Facility Due 2025
Debt Instrument [Line Items]
Total principal amount outstanding				$ 78	$ 85
Basis spread on variable rate				1.50%
Interest rate at period end				1.724%	1.754%
Fixed interest rate				4.702%
Forecast | CMS Energy | Junior subordinated notes | 4.750% Junior Subordinated Notes Due 2050 | US Treasury (UST) Interest Rate
Debt Instrument [Line Items]
Basis spread on variable rate		4.116%
Forecast | CMS Energy | Junior subordinated notes | 3.750% Junior Subordinated Notes Due 2050 | US Treasury (UST) Interest Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.90%
Forecast | CMS Enterprises Including Subsidiaries | Term loan facility | Term Loan Facility Due 2025
Debt Instrument [Line Items]
Basis spread on variable rate			1.75%
Fixed interest rate			4.952%

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Financings and Capitalization (Major Long-Term Debt Transactions) (Details) $ in Millions	Dec. 31, 2021 USD ($)
First Mortgage Bonds | 2.650% First Mortgage Bonds Due 2052 | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 300
Interest rate	2.65%
Tax Exempt Revenue Bonds | 0.875% Tax Exempt Revenue Bonds Due 2035 | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 35
Interest rate	0.875%
Term loan facility | Term Loan Facility Due 2021 | CMS Energy
Debt Instrument [Line Items]
Principal balance	$ 200

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Financings and Capitalization (Schedule of Debt Maturities) (Details) $ in Millions	Dec. 31, 2021 USD ($)
Debt Instrument [Line Items]
2022	$ 373
2023	663
2024	592
2025	332
2026	332
CMS Energy
Debt Instrument [Line Items]
2022	0
2023	0
2024	250
2025	250
2026	300
CMS Enterprises Including Subsidiaries
Debt Instrument [Line Items]
2022	8
2023	9
2024	10
2025	51
2026	0
Consumers Energy Company
Debt Instrument [Line Items]
2022	365
2023	654
2024	332
2025	31
2026	$ 32

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Financings and Capitalization (Schedule of Revolving Credit Facilities) (Details)	12 Months Ended
	Dec. 31, 2021 USD ($)
Consumers Energy Company | Revolving Credit Facilities June 5, 2024
Line of Credit Facility [Line Items]
Amount of Facility	$ 850,000,000
Amount Borrowed	0
Letters of Credit Outstanding	12,000,000
Amount Available	838,000,000
Consumers Energy Company | Revolving Credit Facilities November 19, 2023
Line of Credit Facility [Line Items]
Amount of Facility	250,000,000
Amount Borrowed	0
Letters of Credit Outstanding	8,000,000
Amount Available	242,000,000
Consumers Energy Company | Revolving Credit Facilities April 18, 2022
Line of Credit Facility [Line Items]
Amount of Facility	30,000,000
Amount Borrowed	0
Letters of Credit Outstanding	30,000,000
Amount Available	0
CMS Energy | Revolving Credit Facilities June 5, 2024
Line of Credit Facility [Line Items]
Amount of Facility	550,000,000
Amount Borrowed	0
Letters of Credit Outstanding	24,000,000
Amount Available	526,000,000
CMS Energy | Revolving Credit Facilities September 23, 2022
Line of Credit Facility [Line Items]
Amount of Facility	31,000,000
Amount Borrowed	0
Letters of Credit Outstanding	31,000,000
Amount Available	0
CMS Energy | Revolving Credit Facilities September 23, 2022 | Letter of Credit
Line of Credit Facility [Line Items]
Amount of Facility	50,000,000
CMS Enterprises Including Subsidiaries | Revolving Credit Facilities September 25, 2025
Line of Credit Facility [Line Items]
Amount of Facility	39,000,000
Amount Borrowed	0
Letters of Credit Outstanding	39,000,000
Amount Available	0
CMS Enterprises Including Subsidiaries | Revolving Credit Facilities September 30, 2025
Line of Credit Facility [Line Items]
Amount of Facility	18,000,000
Amount Borrowed	0
Letters of Credit Outstanding	8,000,000
Amount Available	10,000,000
Letter of Credit | Consumers Energy Company
Line of Credit Facility [Line Items]
Borrowings	0
Letter of Credit | CMS Energy | Revolving Credit Facilities June 5, 2024
Line of Credit Facility [Line Items]
Borrowings	0
Letter of Credit | CMS Enterprises Including Subsidiaries | Revolving Credit Facilities September 30, 2025
Line of Credit Facility [Line Items]
Amount Available	8,000,000
Borrowings	$ 0

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Financings and Capitalization (Narrative) (Details)	1 Months Ended		12 Months Ended
	Jan. 31, 2022 USD ($)	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)
Financing And Capitalization [Line Items]
Limitation on payment of stock dividends		$ 6,400,000,000	$ 6,400,000,000
Dividends paid			$ 722,000,000
Common stock authorized (in shares) | shares		350,000,000	350,000,000	350,000,000.0
Common stock, par value (in dollars per share) | $ / shares		$ 0.01	$ 0.01
Preferred stock authorized (in shares) | shares		10,000,000	10,000,000
Par value of preferred stock (in dollars per share) | $ / shares		$ 0.01	$ 0.01
Stock offering program maximum value			$ 500,000,000
Number of shares required to settle forward contracts (in shares) | shares		94,588	94,588
Issuance of preferred stock, net of issuance costs			$ 224,000,000	$ 0	$ 0
Series C Preferred Stock Depositary Shares
Financing And Capitalization [Line Items]
Preferred stock authorized (in shares) | shares		9,200,000	9,200,000
Number of shares issued (in shares) | shares		9,200,000	9,200,000
Depositary share conversion ratio		0.001	0.001
Issue price (in dollars per share) | $ / shares		$ 25.00	$ 25.00
Issuance of preferred stock, net of issuance costs			$ 224,000,000
Dividend rate			4.20%
Optional redemption price (in dollars per share) | $ / shares		25.00	$ 25.00
Trading Symbol			CMS PRC
Series C Preferred Stock
Financing And Capitalization [Line Items]
Optional redemption price (in dollars per share) | $ / shares		$ 25,000	$ 25,000
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series
Financing And Capitalization [Line Items]
Trading Symbol			CMS-PB
Consumers Energy Company
Financing And Capitalization [Line Items]
Notes payable – related parties		$ 392,000,000	$ 392,000,000	$ 307,000,000
Unrestricted retained earnings		$ 1,800,000,000	$ 1,800,000,000
Common stock authorized (in shares) | shares		125,000,000.0	125,000,000.0	125,000,000.0
Preferred stock authorized (in shares) | shares		7,500,000	7,500,000	7,500,000
Consumers Energy Company | Credit Agreement
Financing And Capitalization [Line Items]
Maximum borrowing capacity		$ 500,000,000	$ 500,000,000
Notes payable – related parties		$ 392,000,000	$ 392,000,000
Interest rate		0.00%	0.00%
Consumers Energy Company | Credit Agreement | Subsequent Event
Financing And Capitalization [Line Items]
Repayment of note payable - related party	$ 392,000,000
Consumers Energy Company | Credit Agreement | London Interbank Offered Rate (LIBOR)
Financing And Capitalization [Line Items]
Basis spread on variable rate		0.10%
Consumers Energy Company | Commercial Paper
Financing And Capitalization [Line Items]
Short-term debt authorized borrowings			$ 500,000,000
Short-term borrowings outstanding		$ 0	$ 0

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Financings and Capitalization (Schedule of Forward Stock Contracts) (Details) - $ / shares	Dec. 31, 2021	Dec. 22, 2020	Sep. 15, 2020
Forward Contracts Entered Into September 15, 2020 And Maturing June 30, 2022
Debt and Equity Securities, FV-NI [Line Items]
Number of Shares			846,759
Initial forward price (in dollars per share)	$ 58.51		$ 61.04
Forward Contracts Entered Into December 22, 2020 And Maturing June 22, 2022
Debt and Equity Securities, FV-NI [Line Items]
Number of Shares		115,595
Initial forward price (in dollars per share)	$ 59.73	$ 61.81

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Financings and Capitalization (Schedule of Preferred Stock) (Details) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Debt and Equity Securities, FV-NI [Line Items]
Par value of preferred stock (in dollars per share)	$ 0.01
Preferred stock authorized (in shares)	10,000,000
Consumers Energy Company
Debt and Equity Securities, FV-NI [Line Items]
Preferred stock authorized (in shares)	7,500,000	7,500,000
Preferred Stock $4.50 Series | Consumers Energy Company
Debt and Equity Securities, FV-NI [Line Items]
Par value of preferred stock (in dollars per share)	$ 100	$ 100
Optional redemption price (in dollars per share)	$ 110	$ 110
Preferred stock authorized (in shares)	7,500,000	7,500,000
Number of shares outstanding (in shares)	373,148	373,148

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Fair Value Measurements (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Assets
Restricted cash equivalents	$ 24	$ 17
Derivative instruments	2	1
Liabilities
Derivative instruments	7	11
Current assets held for sale	19	429
Consumers Energy Company
Assets
Restricted cash equivalents	22	15
Derivative instruments	2	1
Liabilities
Derivative instruments	0	0
Current assets held for sale	19	0
Level 1
Assets
Restricted cash equivalents	24	17
Nonqualified deferred compensation plan assets	27	23
Liabilities
Nonqualified deferred compensation plan liabilities	27	23
Level 1 | Consumers Energy Company
Assets
Restricted cash equivalents	22	15
Nonqualified deferred compensation plan assets	21	18
Liabilities
Nonqualified deferred compensation plan liabilities	21	18
Fair Value, Inputs, Level 1, 2 and 3
Assets
Total assets	53	41
Liabilities
Total liabilities	34	34
Fair Value, Inputs, Level 1, 2 and 3 | Consumers Energy Company
Assets
Total assets	45	34
Liabilities
Total liabilities	$ 21	$ 18

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Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash flow hedge gain (loss)	$ 2	$ (6)	$ (4)
Derivative instruments	7	11
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notional amount	78	85
Other Liabilities | Designated as Hedging Instrument | Cash Flow Hedging
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments	$ 4	$ 9

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Fair Value Measurements (Assets Reported at Fair Value on a Nonrecurring Basis) (Details) - USD ($) $ in Millions	1 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale	$ 19	$ 429
Consumers Energy Company
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale	19	$ 0
Consumers Energy Company | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment charge	(4)
Level 1 | Consumers Energy Company | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale	0
Level 2 | Consumers Energy Company | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale	15
Level 3 | Consumers Energy Company | Fair Value, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets held for sale	$ 0

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Financial Instruments (Schedule Of Carrying Amounts And Fair Values Of Financial Instruments) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Liabilities
Current accounts receivable	$ 9	$ 12
Current portion of long term debt	373	571
Current portion of long-term payables	23	6
Carrying Amount
Assets
Long-term receivables	14	17
Liabilities
Long-term debt	12,419	12,315
Long-term payables	31	33
Fair Value
Assets
Long-term receivables	14	17
Liabilities
Long-term debt	13,800	14,601
Long-term payables	32	35
Consumers Energy Company
Liabilities
Current accounts receivable	9	12
Current portion of long term debt	365	364
DB SERP note receivable – related party	7	7
Consumers Energy Company | Carrying Amount
Assets
Long-term receivables	14	17
Notes receivable related party	104	107
Liabilities
Long-term debt	8,415	8,106
Consumers Energy Company | Fair Value
Assets
Long-term receivables	14	17
Notes receivable related party	104	107
Liabilities
Long-term debt	9,410	9,801
Level 1 | Fair Value
Assets
Long-term receivables	0	0
Liabilities
Long-term debt	1,189	1,249
Long-term payables	0	0
Level 1 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	0	0
Notes receivable related party	0	0
Liabilities
Long-term debt	0	0
Level 2 | Fair Value
Assets
Long-term receivables	0	0
Liabilities
Long-term debt	10,656	11,267
Long-term payables	0	0
Level 2 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	0	0
Notes receivable related party	0	0
Liabilities
Long-term debt	7,455	7,716
Level 3 | Fair Value
Assets
Long-term receivables	14	17
Liabilities
Long-term debt	1,955	2,085
Long-term payables	32	35
Level 3 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	14	17
Notes receivable related party	104	107
Liabilities
Long-term debt	$ 1,955	$ 2,085

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Financial Instruments (Narrative) (Details) - CMS Energy Note Payable	Dec. 31, 2021
Financial Instruments [Line Items]
Interest rate	4.10%
Consumers Energy Company
Financial Instruments [Line Items]
Interest rate	4.10%

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Plant, Property, and Equipment (Schedule Of Plant, Property, and Equipment) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Public Utility, Property, Plant and Equipment [Line Items]
Plant, property, and equipment, gross	$ 29,893	$ 27,870	$ 25,368
Construction work in progress	961	1,085
Accumulated depreciation and amortization	(8,502)	(7,938)
Total plant, property, and equipment	22,352	21,017
Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Plant, property, and equipment, gross	28,771	26,757	24,963
Assets under finance leases and other financing	332	336	$ 340
Construction work in progress	915	1,058
Accumulated depreciation and amortization	(8,371)	(7,844)
Total plant, property, and equipment	21,315	19,971
Plant additions	2,400	2,000
Plant retirements	$ 361	220
Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, consumers	3 years
Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, consumers	125 years
Generation | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Generation	$ 6,704	6,376
Generation | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, generation	22 years
Generation | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, generation	125 years
Distribution | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Distribution	$ 9,815	9,130
Distribution | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, distribution	20 years
Distribution | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, distribution	75 years
Other | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Other	$ 1,309	1,326
Other | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	5 years
Other | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	50 years
Assets under finance leases and other financing | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Assets under finance leases and other financing	$ 319	323
Distribution | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Distribution	$ 6,338	5,702
Distribution | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, distribution	20 years
Distribution | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, distribution	85 years
Transmission | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Transmission	$ 2,319	2,003
Transmission | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, transmission	17 years
Transmission | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, transmission	75 years
Underground Storage Facilities | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Other	$ 1,117	1,046
Underground Storage Facilities | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	27 years
Underground Storage Facilities | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	75 years
Other | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Other	$ 814	817
Other | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	5 years
Other | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	50 years
Finance leases | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Assets under finance leases and other financing	$ 13	13
Other non-utility property | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Other non-utility property	$ 23	21
Other non-utility property | Consumers Energy Company | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	3 years
Other non-utility property | Consumers Energy Company | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, other	51 years
Natural Gas | Underground Storage Facilities | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Other	$ 26	26
Enterprises independent power production
Public Utility, Property, Plant and Equipment [Line Items]
Plant, property, and equipment, gross	$ 1,121	1,112
Enterprises independent power production | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, Enterprises	2 years
Enterprises independent power production | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, Enterprises	40 years
Enterprises Other
Public Utility, Property, Plant and Equipment [Line Items]
Plant, property, and equipment, gross	$ 1	$ 1
Enterprises Other | Minimum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, Enterprises	3 years
Enterprises Other | Maximum
Public Utility, Property, Plant and Equipment [Line Items]
Estimated depreciable life in years, Enterprises	5 years

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Plant, Property, and Equipment (Schedule of Finite-Lived Intangible Assets by Major Class Table) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	$ 1,102	$ 1,105
Accumulated Amortization	684	658
Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	1,102	1,104
Accumulated Amortization	684	658
Plant additions	2,400	2,000
Plant retirements	361	220
Software development
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	840	856
Accumulated Amortization	592	568
Software development | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	840	856
Accumulated Amortization	592	568
Leasehold improvements
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	9	10
Accumulated Amortization	6	7
Leasehold improvements | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	9	10
Accumulated Amortization	6	7
Intangible Plant | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Plant additions	88	69
Plant retirements	91	65
Rights of way
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	211	197
Accumulated Amortization	60	57
Rights of way | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	211	197
Accumulated Amortization	60	57
Franchises and consents
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	16	16
Accumulated Amortization	10	10
Franchises and consents | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	16	16
Accumulated Amortization	10	10
Other intangible assets
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	26	26
Accumulated Amortization	16	16
Other intangible assets | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Gross cost	26	25
Accumulated Amortization	$ 16	$ 16
Minimum | Software development
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	3 years
Minimum | Software development | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	3 years
Minimum | Rights of way
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	50 years
Minimum | Rights of way | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	50 years
Minimum | Franchises and consents
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	5 years
Minimum | Franchises and consents | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	5 years
Maximum | Software development
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	15 years
Maximum | Software development | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	15 years
Maximum | Rights of way
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	85 years
Maximum | Rights of way | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	85 years
Maximum | Franchises and consents
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	50 years
Maximum | Franchises and consents | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Amortization Life in Years	50 years

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Plant, Property, and Equipment (Public Utilities, Allowance for Funds Used During Construction, Schedule of Composite Rate Table) (Details) - Consumers Energy Company	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Electric Utility
Property, Plant and Equipment [Line Items]
AFUDC capitalization rate	6.20%	6.90%	6.40%
Gas Utility
Property, Plant and Equipment [Line Items]
AFUDC capitalization rate	5.60%	5.70%	5.80%

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Plant, Property, and Equipment (Schedule of Finance Leases and Other Financing Obligations) (Details) - Consumers Energy Company - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Finance Leases and Other Financing Obligations, Rollforward [Roll Forward]
Balance at beginning of period	$ 336	$ 340
Additions	0	0
Net retirements and other adjustments	(4)	(4)
Balance at end of period	332	336
Finance lease accumulated amortization	$ 272	$ 254

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Plant, Property, and Equipment (Schedule Of Depreciation And Amortization) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Public Utility, Property, Plant and Equipment [Line Items]
Accumulated depreciation and amortization	$ 8,502	$ 7,938
Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Consumers accumulated depreciation and amortization	8,371	7,844
Non-utility plant assets
Public Utility, Property, Plant and Equipment [Line Items]
Accumulated depreciation and amortization	136	97
Non-utility plant assets | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Consumers accumulated depreciation and amortization	5	3
Utility plant assets
Public Utility, Property, Plant and Equipment [Line Items]
Accumulated depreciation and amortization	8,366	7,841
Utility plant assets | Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
Consumers accumulated depreciation and amortization	$ 8,366	$ 7,841

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Plant, Property, and Equipment (Public Utilities Property Plant and Equipment Schedule of Composite Depreciation Rate Table) (Details) - Consumers Energy Company	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Electric utility property
Public Utility, Property, Plant and Equipment [Line Items]
Composite depreciation rate	3.90%	3.90%	3.90%
Gas utility property
Public Utility, Property, Plant and Equipment [Line Items]
Composite depreciation rate	2.90%	2.90%	2.90%
Other property
Public Utility, Property, Plant and Equipment [Line Items]
Composite depreciation rate	9.40%	9.80%	10.00%

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Plant, Property, and Equipment (Schedule Of Depreciation And Amortization Expense) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property, Plant and Equipment [Line Items]
Depreciation expense – plant, property, and equipment	$ 975	$ 901	$ 841
Total depreciation and amortization expense	1,114	1,043	989
Securitized regulatory assets
Property, Plant and Equipment [Line Items]
Amortization expense	27	26	26
Software
Property, Plant and Equipment [Line Items]
Amortization expense	108	112	119
Other intangible assets
Property, Plant and Equipment [Line Items]
Amortization expense	4	4	3
Consumers Energy Company
Property, Plant and Equipment [Line Items]
Depreciation expense – plant, property, and equipment	938	881	827
Total depreciation and amortization expense	1,077	1,023	975
Consumers Energy Company | Securitized regulatory assets
Property, Plant and Equipment [Line Items]
Amortization expense	27	26	26
Consumers Energy Company | Software
Property, Plant and Equipment [Line Items]
Amortization expense	108	112	119
Consumers Energy Company | Other intangible assets
Property, Plant and Equipment [Line Items]
Amortization expense	$ 4	$ 4	$ 3

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Plant, Property, and Equipment (Schedule Of Estimated Amortization Expense For Intangibles) (Details) $ in Millions	Dec. 31, 2021 USD ($)
Public Utility, Property, Plant and Equipment [Line Items]
2022	$ 108
2023	94
2024	84
2025	86
2026	84
Consumers Energy Company
Public Utility, Property, Plant and Equipment [Line Items]
2022	108
2023	94
2024	84
2025	86
2026	$ 84

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Plant, Property, and Equipment (Jointly Owned Regulated Utility Facilities) (Details) - Consumers Energy Company $ in Millions	Dec. 31, 2021 USD ($)
J.H. Campbell Unit 3
Public Utility, Property, Plant and Equipment [Line Items]
Ownership share	93.30%
Utility plant in service	$ 1,751
Accumulated depreciation	(897)
Construction work in progress	21
Net investment	$ 875
Ludington
Public Utility, Property, Plant and Equipment [Line Items]
Ownership share	51.00%
Utility plant in service	$ 499
Accumulated depreciation	(198)
Construction work in progress	92
Net investment	393
Other
Public Utility, Property, Plant and Equipment [Line Items]
Utility plant in service	395
Accumulated depreciation	(112)
Construction work in progress	13
Net investment	$ 296

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Leases and Palisades Financing - Assets and Liabilities of Lessee (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Operating leases
Right-of-use assets	$ 26	$ 32
Lease liabilities
Current lease liabilities	3	7
Noncurrent lease liabilities	23	25
Finance leases
Right-of-use assets	57	65
Lease liabilities
Current lease liabilities	6	7
Non-current lease liabilities	$ 46	$ 53
Weighted-average remaining lease term (in years)
Operating leases	23 years	19 years
Finance leases	12 years	12 years
Weighted-average discount rate
Operating leases	4.00%	3.90%
Finance leases	1.70%	1.80%
Finance lease liability	$ 52
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other	Other
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities	Other current liabilities
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other non‑current liabilities	Other non‑current liabilities
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Plant, property, and equipment, net	Plant, property, and equipment, net
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Current portion of long-term debt, finance leases, and other financing	Current portion of long-term debt, finance leases, and other financing
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Non-current portion of finance leases and other financing	Non-current portion of finance leases and other financing
Consumers Energy Company
Operating leases
Right-of-use assets	$ 22	$ 28
Lease liabilities
Current lease liabilities	3	7
Noncurrent lease liabilities	19	21
Finance leases
Right-of-use assets	57	65
Lease liabilities
Current lease liabilities	6	7
Non-current lease liabilities	$ 46	$ 53
Weighted-average remaining lease term (in years)
Operating leases	21 years	18 years
Finance leases	12 years	12 years
Weighted-average discount rate
Operating leases	3.90%	3.80%
Finance leases	1.70%	1.80%
Finance lease liability	$ 52
Related Party Lease
Lease liabilities
Current lease liabilities	1	$ 1
Weighted-average discount rate
Finance lease liability	$ 25	$ 25

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Leases and Palisades Financing - Schedule of Lease Costs (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 8	$ 9
Finance lease costs
Amortization of right-of-use assets	7	6
Interest on lease liabilities	16	17
Variable lease costs	90	94
Short-term lease costs	22	17
Total lease costs	143	143
Consumers Energy Company
Lessee, Lease, Description [Line Items]
Operating lease costs	8	9
Finance lease costs
Amortization of right-of-use assets	7	6
Interest on lease liabilities	16	17
Variable lease costs	90	94
Short-term lease costs	21	16
Total lease costs	$ 142	$ 142

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Leases and Palisades Financing - Schedule of Lessee Cash Flows (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases	$ 8	$ 11
Cash used in operating activities for finance leases	16	17
Cash used in financing activities for finance leases	7	6
Consumers Energy Company
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases	8	9
Cash used in operating activities for finance leases	16	17
Cash used in financing activities for finance leases	$ 7	$ 6

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Leases and Palisades Financing - Minimum Annual Rental Commitments post Topic 842 (Details) $ in Millions	Dec. 31, 2021 USD ($)
Operating Leases
2022	$ 5
2023	2
2024	2
2025	1
2026	1
2027 and thereafter	32
Total minimum lease payments	43
Less discount	17
Present value of minimum lease payments	26
Finance Leases
2022	19
2023	18
2024	16
2025	14
2026	15
2027 and thereafter	60
Total minimum lease payments	142
Less discount	90
Present value of minimum lease payments	52
Consumers Energy Company
Operating Leases
2022	4
2023	2
2024	1
2025	1
2026	1
2027 and thereafter	27
Total minimum lease payments	36
Less discount	14
Present value of minimum lease payments	22
Finance Leases
2022	19
2023	18
2024	16
2025	14
2026	15
2027 and thereafter	60
Total minimum lease payments	142
Less discount	90
Present value of minimum lease payments	52
Pipelines and PPAs
Finance Leases
2022	14
2023	13
2024	13
2025	13
2026	13
2027 and thereafter	51
Total minimum lease payments	117
Less discount	88
Present value of minimum lease payments	29
Pipelines and PPAs | Consumers Energy Company
Finance Leases
2022	14
2023	13
2024	13
2025	13
2026	13
2027 and thereafter	51
Total minimum lease payments	117
Less discount	88
Present value of minimum lease payments	29
Other
Finance Leases
2022	5
2023	5
2024	3
2025	1
2026	2
2027 and thereafter	9
Total minimum lease payments	25
Less discount	2
Present value of minimum lease payments	23
Other | Consumers Energy Company
Finance Leases
2022	5
2023	5
2024	3
2025	1
2026	2
2027 and thereafter	9
Total minimum lease payments	25
Less discount	2
Present value of minimum lease payments	$ 23

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Leases and Palisades Financing - Lessor Leases Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract]
Minimum rental payments to be received 2027 and thereafter	$ 6
Lease receivables	5
Unearned income	4
Maximum
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract]
Minimum rental payments to be received 2022	1
Minimum annual rental payments to be received in 2023	1
Minimum annual rental payments to be received in 2024	1
Minimum annual rental payments to be received in 2025	1
Minimum rental payments to be received in 2026	1
Consumers Energy Company
Sales-type and Direct Financing Leases, Lease Receivable, Fiscal Year Maturity [Abstract]
Minimum rental payments to be received 2022	1
Minimum annual rental payments to be received in 2023	1
Minimum annual rental payments to be received in 2024	1
Minimum annual rental payments to be received in 2025	1
Minimum rental payments to be received in 2026	1
Minimum rental payments to be received 2027 and thereafter	17
Lease receivables	10
Unearned income	12
Power Sales Agreement
Lessor, Lease, Description [Line Items]
Leasing income	194	$ 148
Variable lease income	$ 138	$ 93

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Leases and Palisades Financing - Schedule of Future Payments to be Received (Details) $ in Millions	Dec. 31, 2021 USD ($)
Operating Leases
2022	$ 48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$ 196

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Leases and Palisades Financing - Palisades Financing (Details) - Financing Obligation - Consumers Energy Company - Palisades Power Purchase Agreement $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) MW	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2007
Other Commitments [Line Items]
Finance obligation term				15 years
Annual average capacity (in MW) | MW	798
Amortization and interest expense	$ 14	$ 14	$ 15
Palisades asset	3
Palisades financing obligation	$ 3

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Asset Retirement Obligations (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	$ 553	$ 477
Incurred	71	65
Settled	(53)	(41)
Accretion	24	24
Cash Flow Revisions	33	28
ARO Liability, end of period	628	553
Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	530	474
Incurred	71	46
Settled	(53)	(41)
Accretion	24	23
Cash Flow Revisions	33	28
ARO Liability, end of period	605	530
Renewable generation assets
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	23	3
Incurred	0	19
Settled	0	0
Accretion	0	1
Cash Flow Revisions	0	0
ARO Liability, end of period	23	23
Renewable generation assets | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	74	21
Incurred	16	24
Settled	0	0
Accretion	3	1
Cash Flow Revisions	0	28
ARO Liability, end of period	93	74
Coal ash disposal areas | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	148	166
Incurred	0	0
Settled	(34)	(24)
Accretion	5	6
Cash Flow Revisions	38	0
ARO Liability, end of period	157	148
Gas distribution cut, purge, and cap | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	240	231
Incurred	39	1
Settled	(10)	(5)
Accretion	13	13
Cash Flow Revisions	0	0
ARO Liability, end of period	282	240
Asbestos abatement | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	36	34
Incurred	0	0
Settled	0	0
Accretion	2	2
Cash Flow Revisions	0	0
ARO Liability, end of period	38	36
Gas wells plug and abandon | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	32	22
Incurred	16	16
Settled	(9)	(7)
Accretion	1	1
Cash Flow Revisions	(5)	0
ARO Liability, end of period	35	32
Cable under Straits of Mackinac | Consumers Energy Company
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
ARO Liability, at beginning of period	$ 0	0
Incurred		5
Settled		(5)
Accretion		0
Cash Flow Revisions		0
ARO Liability, end of period		$ 0

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Retirement Benefits (Narrative) (Details) $ in Millions		2 Months Ended	12 Months Ended
	Oct. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) year	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Union employees percentage		41.00%	41.00%
Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Union employees percentage		42.00%	42.00%
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Settlement loss	$ 18	$ 4
Amortized net gains and losses in excess of PBO or MRV			10.00%
Period for gains or losses to be included in market related value			5 years
ABO		2,700	$ 2,700	$ 2,900
DB Pension Plans | Consumers Energy Company | Pension Costs
Defined Benefit Plan Disclosure [Line Items]
Settlement loss	$ 18	$ 3
DB Pension Plans | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		54.00%	54.00%
DB Pension Plans | Fixed-income securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		29.00%	29.00%
DB Pension Plans | Real asset investments
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		12.00%	12.00%
DB Pension Plans | Multi-asset investments
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		5.00%	5.00%
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
Settlement loss			$ 0	$ 0	$ 0
Retirement age requirement | year			55
Retirement years of service			10 years
Retirement years of service with disability			15 years
Ultimate health care cost trend rate		4.75%	4.75%
Year health care cost trend rate reaches ultimate trend rate			2028
Estimated time of amortization of gains losses			9 years	9 years	10 years
OPEB Plan | Under Age 65
Defined Benefit Plan Disclosure [Line Items]
Health care cost trend rate assumed next fiscal year		6.25%	6.25%	6.50%
OPEB Plan | Over Age 65
Defined Benefit Plan Disclosure [Line Items]
Health care cost trend rate assumed next fiscal year		6.75%	6.75%	7.00%
OPEB Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Retirement age requirement | year			55
Retirement years of service			10 years
Retirement years of service with disability			15 years
Ultimate health care cost trend rate		4.75%	4.75%
Year health care cost trend rate reaches ultimate trend rate			2028
OPEB Plan | Consumers Energy Company | Under Age 65
Defined Benefit Plan Disclosure [Line Items]
Health care cost trend rate assumed next fiscal year		6.25%	6.25%	6.50%
OPEB Plan | Consumers Energy Company | Over Age 65
Defined Benefit Plan Disclosure [Line Items]
Health care cost trend rate assumed next fiscal year		6.75%	6.75%	7.00%
Postretirement Health Trusts | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		55.00%	55.00%
Postretirement Health Trusts | Fixed-income securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		30.00%	30.00%
Postretirement Health Trusts | Real asset investments
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		12.00%	12.00%
Postretirement Health Trusts | Multi-asset investments
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		3.00%	3.00%
Postretirement Life Trusts | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		53.00%	53.00%
Postretirement Life Trusts | Fixed-income securities
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		32.00%	32.00%
Postretirement Life Trusts | Multi-asset investments
Defined Benefit Plan Disclosure [Line Items]
Target allocation percentage		15.00%	15.00%
DB Pension Plan A Settlement | DB Pension Plans | Pension Costs
Defined Benefit Plan Disclosure [Line Items]
Regulatory asset, amortization period			8 years
Defined Company Contribution Plan
Defined Benefit Plan Disclosure [Line Items]
Plan cost, defined contribution plan			$ 41	$ 31	$ 29
Defined Company Contribution Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Plan cost, defined contribution plan			41	31	28
DC SERP
Defined Benefit Plan Disclosure [Line Items]
Plan cost, defined contribution plan			$ 2	2	2
Minimum years of participation before vesting			5 years
Trust assets		$ 13	$ 13	11
401 (K) Plan
Defined Benefit Plan Disclosure [Line Items]
Employer match of eligible wages			3.00%
Plan cost, defined contribution plan			$ 31	29	28
Employer match of eligible contributions			100.00%
Secondary employer match of eligible contributions			50.00%
Secondary employer match of eligible wages			2.00%
401 (K) Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Plan cost, defined contribution plan			$ 31	$ 29	$ 27
Pension Plan A | DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Estimated time of amortization of gains losses			8 years	8 years	9 years
Estimated time of prior service cost			8 years
Pension Plan A | DB Pension Plans | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Estimated time of prior service cost			8 years
Pension Plan B | DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Estimated time of amortization of gains (losses) life expectancy			18 years	19 years	20 years
Minimum | Defined Company Contribution Plan
Defined Benefit Plan Disclosure [Line Items]
Employer match of eligible wages			5.00%
Minimum | DC SERP
Defined Benefit Plan Disclosure [Line Items]
Plan contribution percentage			5.00%
Maximum | Defined Company Contribution Plan
Defined Benefit Plan Disclosure [Line Items]
Employer match of eligible wages			10.00%
Maximum | DC SERP
Defined Benefit Plan Disclosure [Line Items]
Plan contribution percentage			15.00%

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Retirement Benefits (Schedule Of SERP Trust Assets, ABO And Contributions) (Details) - DB SERP - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Trust assets	$ 0	$ 0	$ 0
ABO	149	159
Contributions	0	8
Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Trust assets	0	0	$ 0
ABO	108	115
Contributions	0	5
Trust assets
Defined Benefit Plan Disclosure [Line Items]
Trust assets	142	146
Trust assets | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Trust assets	$ 104	$ 107

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Retirement Benefits (Schedule Of Assumptions Used) (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
DB Pension Plans
Weighted average for net periodic benefit cost
Expected long-term rate of return on plan assets	6.75%	6.75%	7.00%
Actual rate of return on plan assets	12.00%	13.60%	21.00%
DB SERP
Weighted average for benefit obligations
Discount rate	2.78%	2.40%	3.15%
Rate of compensation increase	5.50%	5.50%	5.50%
Weighted average for net periodic benefit cost
Service cost discount rate	2.84%	3.46%	4.58%
Interest cost discount rate	1.72%	2.74%	3.94%
Rate of compensation increase	5.50%	5.50%	5.50%
OPEB Plan
Weighted average for benefit obligations
Discount rate	2.99%	2.69%	3.32%
Weighted average for net periodic benefit cost
Service cost discount rate	3.03%	3.57%	4.63%
Interest cost discount rate	1.99%	2.88%	4.03%
Expected long-term rate of return on plan assets	6.75%	6.75%	7.00%
Pension Plan A | DB Pension Plans
Weighted average for benefit obligations
Discount rate	3.02%	2.73%	3.37%
Rate of compensation increase	3.60%	3.70%	3.50%
Weighted average for net periodic benefit cost
Service cost discount rate	2.83%	3.44%	4.55%
Interest cost discount rate	1.97%	2.92%	4.08%
Rate of compensation increase	3.70%	3.50%	3.50%
Pension Plan B | DB Pension Plans
Weighted average for benefit obligations
Discount rate	2.79%	2.41%	3.17%
Weighted average for net periodic benefit cost
Interest cost discount rate	1.70%	2.74%	3.93%

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Retirement Benefits (Schedule Of Net Benefit Costs) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
DB Pension Plans and DB SERP
Defined Benefit Plan, Roll Forwards [Abstract]
Service cost	$ 53	$ 50	$ 41
Interest cost	63	83	103
Settlement loss	1	1	0
Expected return on plan assets	(208)	(191)	(162)
Amortization of
Net loss	100	95	50
Prior service cost (credit)	4	1	1
Settlement loss	6	2	0
Net periodic cost (credit)	19	41	33
DB Pension Plans and DB SERP | Consumers Energy Company
Defined Benefit Plan, Roll Forwards [Abstract]
Service cost	51	49	40
Interest cost	59	78	97
Expected return on plan assets	(197)	(181)	(153)
Amortization of
Net loss	96	90	47
Prior service cost (credit)	4	1	1
Settlement loss	6	2	0
Net periodic cost (credit)	19	39	32
OPEB Plan
Defined Benefit Plan, Roll Forwards [Abstract]
Service cost	18	16	14
Interest cost	23	33	41
Settlement loss	0	0	0
Expected return on plan assets	(109)	(100)	(88)
Amortization of
Net loss	8	15	26
Prior service cost (credit)	(53)	(56)	(62)
Settlement loss	0	0	0
Net periodic cost (credit)	(113)	(92)	(69)
OPEB Plan | Consumers Energy Company
Defined Benefit Plan, Roll Forwards [Abstract]
Service cost	17	15	13
Interest cost	23	31	40
Expected return on plan assets	(102)	(93)	(82)
Amortization of
Net loss	8	15	26
Prior service cost (credit)	(51)	(54)	(61)
Settlement loss	0	0	0
Net periodic cost (credit)	$ (105)	$ (86)	$ (64)

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Retirement Benefits (Schedule Of Funded Status Of Retirement Benefit Plans) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
DB Pension Plans
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of period	$ 3,266	$ 2,973
Service cost	53	50
Interest cost	60	79
Plan amendments	0	24
Actuarial loss (gain)	(108)	355
Benefits paid	(201)	(215)
Benefit obligation at end of period	3,070	3,266	$ 2,973
Defined Benefit Plan, Roll Forwards [Abstract]
Plan assets at fair value at beginning of period	3,402	2,546
Actual return on plan assets	398	371
Company contribution	0	700
Actual benefits paid	(201)	(215)
Plan assets at fair value at end of period	3,599	3,402	2,546
Funded status	529	136
DB Pension Plans | Consumers Energy Company
Defined Benefit Plan, Roll Forwards [Abstract]
Funded status	510	138
DB SERP
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of period	160	150
Service cost	0	0
Interest cost	3	4
Plan amendments	0	0
Actuarial loss (gain)	(4)	16
Benefits paid	(10)	(10)
Benefit obligation at end of period	149	160	150
Defined Benefit Plan, Roll Forwards [Abstract]
Plan assets at fair value at beginning of period	0	0
Actual return on plan assets	0	0
Company contribution	10	10
Actual benefits paid	(10)	(10)
Plan assets at fair value at end of period	0	0	0
Funded status	(149)	(160)
DB SERP | Consumers Energy Company
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of period	117	109
Service cost	0	0
Interest cost	2	3
Plan amendments	0	0
Actuarial loss (gain)	(3)	12
Benefits paid	(7)	(7)
Benefit obligation at end of period	109	117	109
Defined Benefit Plan, Roll Forwards [Abstract]
Plan assets at fair value at beginning of period	0	0
Actual return on plan assets	0	0
Company contribution	7	7
Actual benefits paid	(7)	(7)
Plan assets at fair value at end of period	0	0	0
Funded status	(109)	(117)
OPEB Plan
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of period	1,205	1,165
Service cost	18	16	14
Interest cost	23	33	41
Plan amendments	5	0
Actuarial loss (gain)	(32)	39
Benefits paid	(53)	(48)
Benefit obligation at end of period	1,166	1,205	1,165
Defined Benefit Plan, Roll Forwards [Abstract]
Plan assets at fair value at beginning of period	1,645	1,509
Actual return on plan assets	194	182
Company contribution	0	1
Actual benefits paid	(52)	(47)
Plan assets at fair value at end of period	1,787	1,645	1,509
Funded status	621	440
OPEB Plan | Consumers Energy Company
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward]
Benefit obligation at beginning of period	1,158	1,120
Service cost	17	15	13
Interest cost	23	31	40
Plan amendments	5	0
Actuarial loss (gain)	(30)	37
Benefits paid	(51)	(45)
Benefit obligation at end of period	1,122	1,158	1,120
Defined Benefit Plan, Roll Forwards [Abstract]
Plan assets at fair value at beginning of period	1,535	1,410
Actual return on plan assets	182	169
Company contribution	0	1
Actual benefits paid	(49)	(45)
Plan assets at fair value at end of period	1,668	1,535	$ 1,410
Funded status	$ 546	$ 377

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Retirement Benefits (Schedule Of Retirement Benefit Plan Assets (Liabilities)) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Defined Benefit Plan Disclosure [Line Items]
Non-current liabilities	$ 142	$ 152
Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Non-current liabilities	104	112
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Non-current assets	529	136
DB Pension Plans | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Non-current assets	510	138
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
Non-current assets	621	440
OPEB Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Non-current assets	546	377
DB SERP
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	10	10
Non-current liabilities	139	150
DB SERP | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Current liabilities	7	7
Non-current liabilities	$ 102	$ 110

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Retirement Benefits (Schedule Of Net Periodic Benefit Cost Not yet Recognized) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Consumers Energy Company
Regulatory assets (liabilities)
Total regulatory assets	$ 2,305	$ 2,695
Total regulatory liabilities	(3,948)	(3,895)
DB Pension Plans and DB SERP
Regulatory assets (liabilities)
Net loss	812	1,194
Prior service cost (credit)	25	29
Total regulatory assets	837	1,223
AOCI
Net loss (gain)	94	120
Prior service cost (credit)	0	1
Total amounts recognized in regulatory assets (liabilities) and AOCI	931	1,344
DB Pension Plans and DB SERP | Consumers Energy Company
Regulatory assets (liabilities)
Net loss	812	1,194
Prior service cost (credit)	25	29
Total regulatory assets	837	1,223
AOCI
Net loss (gain)	41	47
Total amounts recognized in regulatory assets (liabilities) and AOCI	878	1,270
OPEB Plan
Regulatory assets (liabilities)
Net loss	136	254
Prior service cost (credit)	(190)	(246)
Total regulatory assets		8
Total regulatory liabilities	(54)
AOCI
Net loss (gain)	(17)	(10)
Prior service cost (credit)	(5)	(6)
Total amounts recognized in regulatory assets (liabilities) and AOCI	(76)	(8)
OPEB Plan | Consumers Energy Company
Regulatory assets (liabilities)
Net loss	136	254
Prior service cost (credit)	(190)	(246)
Total regulatory assets		8
Total regulatory liabilities	(54)
AOCI
Net loss (gain)	0	0
Total amounts recognized in regulatory assets (liabilities) and AOCI	$ (54)	$ 8

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Retirement Benefits (Schedule Of Allocation Of Plan Assets) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 3,599	$ 3,402	$ 2,546
DB Pension Plans | Plan Assets Excluding Pooled Funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	1,698	1,828
DB Pension Plans | Plan Assets Excluding Pooled Funds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	815	1,086
DB Pension Plans | Plan Assets Excluding Pooled Funds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	883	742
DB Pension Plans | Cash and short-term investments
Defined Benefit Plan Disclosure [Line Items]
Plan assets	30	115
DB Pension Plans | Cash and short-term investments | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	30	115
DB Pension Plans | U.S. government and agencies securities
Defined Benefit Plan Disclosure [Line Items]
Plan assets	209	150
DB Pension Plans | U.S. government and agencies securities | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	209	150
DB Pension Plans | Corporate debt
Defined Benefit Plan Disclosure [Line Items]
Plan assets	595	540
DB Pension Plans | Corporate debt | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	595	540
DB Pension Plans | State and municipal bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	13	11
DB Pension Plans | State and municipal bonds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	13	11
DB Pension Plans | Foreign corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	66	41
DB Pension Plans | Foreign corporate bonds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	66	41
DB Pension Plans | Mutual funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	785	971
DB Pension Plans | Mutual funds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	785	971
DB Pension Plans | Pooled funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	1,901	1,574
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
Plan assets	1,787	1,645	$ 1,509
OPEB Plan | Plan Assets Excluding Pooled Funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	1,155	995
OPEB Plan | Plan Assets Excluding Pooled Funds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	1,047	906
OPEB Plan | Plan Assets Excluding Pooled Funds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	108	89
OPEB Plan | Cash and short-term investments
Defined Benefit Plan Disclosure [Line Items]
Plan assets	21	33
OPEB Plan | Cash and short-term investments | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	21	33
OPEB Plan | U.S. government and agencies securities
Defined Benefit Plan Disclosure [Line Items]
Plan assets	25	18
OPEB Plan | U.S. government and agencies securities | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	25	18
OPEB Plan | Corporate debt
Defined Benefit Plan Disclosure [Line Items]
Plan assets	73	64
OPEB Plan | Corporate debt | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	73	64
OPEB Plan | State and municipal bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	2	2
OPEB Plan | State and municipal bonds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	2	2
OPEB Plan | Foreign corporate bonds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	8	5
OPEB Plan | Foreign corporate bonds | Level 2
Defined Benefit Plan Disclosure [Line Items]
Plan assets	8	5
OPEB Plan | Common stocks
Defined Benefit Plan Disclosure [Line Items]
Plan assets	85	66
OPEB Plan | Common stocks | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	85	66
OPEB Plan | Mutual funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	941	807
OPEB Plan | Mutual funds | Level 1
Defined Benefit Plan Disclosure [Line Items]
Plan assets	941	807
OPEB Plan | Pooled funds
Defined Benefit Plan Disclosure [Line Items]
Plan assets	$ 632	$ 650

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Retirement Benefits (Schedule Of Asset Allocation) (Details)	Dec. 31, 2021
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	100.00%
DB Pension Plans | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	54.00%
DB Pension Plans | Fixed-income securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	28.00%
DB Pension Plans | Real asset investments
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	12.00%
DB Pension Plans | Multi-asset investments
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	5.00%
DB Pension Plans | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	1.00%
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	100.00%
OPEB Plan | Equity securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	55.00%
OPEB Plan | Fixed-income securities
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	28.00%
OPEB Plan | Real asset investments
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	12.00%
OPEB Plan | Multi-asset investments
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	4.00%
OPEB Plan | Cash and Cash Equivalents
Defined Benefit Plan Disclosure [Line Items]
Asset allocation	1.00%

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Retirement Benefits (Schedule Of Plan Contributions) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	$ 12	$ 712	$ 10
Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	9	690	$ 7
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	0	700
DB Pension Plans | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	0	682
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	0	1
OPEB Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Postretirement benefits contributions	$ 0	$ 1

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Retirement Benefits (Schedule Of Expected Benefit Payments) (Details) $ in Millions	Dec. 31, 2021 USD ($)
DB Pension Plans
Defined Benefit Plan Disclosure [Line Items]
2022	$ 185
2023	181
2024	178
2025	180
2026	178
2027-2031	876
DB Pension Plans | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
2022	175
2023	171
2024	169
2025	170
2026	169
2027-2031	830
DB SERP
Defined Benefit Plan Disclosure [Line Items]
2022	10
2023	10
2024	10
2025	10
2026	9
2027-2031	45
DB SERP | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
2022	7
2023	7
2024	7
2025	7
2026	6
2027-2031	31
OPEB Plan
Defined Benefit Plan Disclosure [Line Items]
2022	52
2023	54
2024	56
2025	58
2026	59
2027-2031	308
OPEB Plan | Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
2022	49
2023	52
2024	54
2025	55
2026	56
2027-2031	$ 294

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Stock-Based Compensation (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation arrangements plan term	10 years
Number of shares authorized (in shares)	6,500,000
Shares available for grant (in shares)	5,927,297
Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation arrangements plan term	10 years
Number of shares authorized (in shares)	6,500,000
Shares available for grant (in shares)	5,927,297
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of initial grant issued on vesting date	0.00%
Minimum | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of initial grant issued on vesting date	0.00%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of initial grant issued on vesting date	200.00%
Maximum | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of initial grant issued on vesting date	200.00%
Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	38 months
Vesting period	3 years
Performance-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	38 months
Vesting period	3 years
Performance-based awards | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	36 months
Performance-based awards | Minimum | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	36 months
Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	3 years
Vesting period	3 years
Market-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	3 years
Vesting period	3 years
Time-lapse awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	3 years
Time-lapse awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	3 years
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	1 year
Shares forfeited (in shares)	0
Restricted stock units | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Service period	1 year
Shares forfeited (in shares)	0
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares forfeited (in shares)	22,264
Unrecognized compensation cost | $	$ 24.1
Unrecognized compensation cost recognition period	2 years
Restricted stock | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares forfeited (in shares)	21,780
Unrecognized compensation cost | $	$ 22.9
Unrecognized compensation cost recognition period	2 years

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Stock-Based Compensation (Schedule Of Restricted Stock Activity) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Number of Shares
Granted (in shares)	561,068
Consumers Energy Company
Number of Shares
Granted (in shares)	530,234
Restricted stock
Number of Shares
Granted (in shares)	547,201
Vested (in shares)	(408,011)
Forfeited (in shares)	(22,264)
Weighted-Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 43.52	$ 45.56	$ 43.57
Vested (in dollars per share)	29.46
Forfeitured (in dollars per share)	$ 57.90
Restricted stock | Consumers Energy Company
Number of Shares
Granted (in shares)	517,141
Vested (in shares)	(388,009)
Forfeited (in shares)	(21,780)
Weighted-Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 42.85	45.53	43.57
Vested (in dollars per share)	29.55
Forfeitured (in dollars per share)	$ 58.01
Restricted stock units
Number of Shares
Granted (in shares)	13,867
Vested (in shares)	(15,577)
Forfeited (in shares)	0
Weighted-Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 54.11	49.76	50.35
Vested (in dollars per share)	$ 48.15
Restricted stock units | Consumers Energy Company
Number of Shares
Granted (in shares)	13,093
Vested (in shares)	(14,891)
Forfeited (in shares)	0
Weighted-Average Grant Date Fair Value per Share
Granted (in dollars per share)	$ 53.93	$ 49.70	$ 51.15
Vested (in dollars per share)	$ 48.09
Restricted Stock and Restricted Stock Units
Number of Shares
Nonvested, at beginning of period (in shares)	817,357
Nonvested, at end of period (in shares)	932,573	817,357
Weighted-Average Grant Date Fair Value per Share
Weighted-average grant date fair value per share, at beginning of period (in dollars per share)	$ 51.68
Weighted-average grant date fair value per share, at end of period (in dollars per share)	$ 56.56	$ 51.68
Restricted Stock and Restricted Stock Units | Consumers Energy Company
Number of Shares
Nonvested, at beginning of period (in shares)	781,531
Nonvested, at end of period (in shares)	887,085	781,531
Weighted-Average Grant Date Fair Value per Share
Weighted-average grant date fair value per share, at beginning of period (in dollars per share)	$ 51.73
Weighted-average grant date fair value per share, at end of period (in dollars per share)	$ 56.19	$ 51.73

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Stock-Based Compensation (Schedule Of Restricted Stock Activity - Granted) (Details)	12 Months Ended
	Dec. 31, 2021 shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	561,068
Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	530,234
Time-lapse awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	118,290
Time-lapse awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	112,128
Market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	143,843
Market-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	135,638
Performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	143,843
Performance-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	135,638
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	11,725
Restricted stock units | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	11,035
Dividends on market-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	15,661
Dividends on market-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	14,890
Dividends on performance-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	15,964
Dividends on performance-based awards | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	15,175
Dividends on restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	2,142
Dividends on restricted stock units | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	2,058
Additional market-based shares based on achievement of condition
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	59,736
Additional market-based shares based on achievement of condition | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	56,505
Additional performance-based shares based on achievement of condition
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	49,864
Additional performance-based shares based on achievement of condition | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)	47,167

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Stock-Based Compensation (Schedule Of Share-Based Payment Award, Restricted Stock, Valuation Assumptions) (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Payment Arrangement, Noncash Expense [Abstract]
Expected volatility	27.60%	14.20%	14.90%
Expected dividend yield	2.80%	2.40%	2.80%
Risk-free rate	0.20%	1.60%	2.50%

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Stock-Based Compensation (Share-Based Compensation Arrangement By Share-Based Payment Award, Options, Grants In Period, Weighted Average Grant Date Fair Value) (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)	$ 43.52	$ 45.56	$ 43.57
Restricted stock | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)	42.85	45.53	43.57
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)	54.11	49.76	50.35
Restricted stock units | Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share)	$ 53.93	$ 49.70	$ 51.15

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Stock-Based Compensation (Schedule Of Compensation Cost For Share-Based Payment Arrangements, Allocation Of Share-Based Compensation Costs By Plan) (Details) - Restricted stock - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of shares that vested during the year	$ 25	$ 22	$ 26
Compensation expense recognized	22	11	22
Income tax benefit recognized	1	3	1
Consumers Energy Company
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of shares that vested during the year	24	21	25
Compensation expense recognized	21	10	21
Income tax benefit recognized	$ 1	$ 3	$ 1

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Income Taxes (Schedule Of Effective Income Rate Reconciliation) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Taxes [Line Items]
Income from continuing operations before income taxes	$ 823	$ 809	$ 764
Income tax expense at statutory rate	173	170	160
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	39	44	46
TCJA excess deferred taxes	(50)	(35)	(31)
Production tax credits	(40)	(28)	(20)
Accelerated flow-through of regulatory tax benefits	(28)	(13)	(13)
Research and development tax credits, net	(3)	(11)	(2)
Refund of alternative minimum tax sequestration	0	(9)	0
Other, net	4	(3)	(9)
Income tax expense	$ 95	$ 115	$ 131
Effective tax rate	11.50%	14.20%	17.10%
Consumers Energy Company
Income Taxes [Line Items]
Income from continuing operations before income taxes	$ 1,024	$ 989	$ 928
Income tax expense at statutory rate	215	208	195
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	54	47	53
TCJA excess deferred taxes	(50)	(35)	(31)
Production tax credits	(33)	(19)	(12)
Accelerated flow-through of regulatory tax benefits	(28)	(13)	(13)
Research and development tax credits, net	(3)	(11)	(2)
Other, net	1	(4)	(5)
Income tax expense	$ 156	$ 173	$ 185
Effective tax rate	15.20%	17.50%	19.90%
Research Tax Credit Carryforward
Increase (decrease) in income taxes from:
Increase (decrease) in tax credit carryforward		$ 9
Research Tax Credit Carryforward | Consumers Energy Company
Increase (decrease) in income taxes from:
Increase (decrease) in tax credit carryforward		$ 8

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Income Taxes (Significant Components Of Income Tax Expense) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current income taxes
Federal	$ (1)	$ (35)	$ (31)
State and local	1	(2)	28
Total current income tax expense	0	(37)	(3)
Deferred income taxes
Federal	49	100	84
State and local	49	57	29
Total deferred income tax expense	98	157	113
Deferred income tax credit	(3)	(5)	21
Income tax expense	95	115	131
Consumers Energy Company
Current income taxes
Federal	(13)	3	107
State and local	15	(7)	41
Total current income tax expense	2	(4)	148
Deferred income taxes
Federal	103	115	(10)
State and local	54	67	26
Total deferred income tax expense	157	182	16
Deferred income tax credit	(3)	(5)	21
Income tax expense	$ 156	$ 173	$ 185

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Income Taxes (Principal Components Of Deferred Income Tax Assets And Liabilities) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Deferred income tax assets
Tax loss and credit carryforwards	$ 332	$ 483
Net regulatory tax liability	349	372
Reserves and accruals	32	62
Total deferred income tax assets	713	917
Valuation allowance	(2)	(1)
Total deferred income tax assets, net of valuation allowance	711	916
Deferred income tax liabilities
Plant, property, and equipment	(2,395)	(2,287)
Employee benefits	(399)	(364)
Securitized costs	(46)	(53)
Gas inventory	(22)	(24)
Other	(59)	(51)
Total deferred income tax liabilities	(2,921)	(2,779)
Total net deferred income tax liabilities	(2,210)	(1,863)
Consumers Energy Company
Deferred income tax assets
Tax loss and credit carryforwards	134	216
Net regulatory tax liability	349	372
Reserves and accruals	24	24
Total deferred income tax assets, net of valuation allowance	507	612
Deferred income tax liabilities
Plant, property, and equipment	(2,341)	(2,230)
Employee benefits	(388)	(365)
Securitized costs	(46)	(53)
Gas inventory	(22)	(24)
Other	(50)	(34)
Total deferred income tax liabilities	(2,847)	(2,706)
Total net deferred income tax liabilities	$ (2,340)	$ (2,094)

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Income Taxes (Loss And Credit Carryforwards) (Details) $ in Millions	Dec. 31, 2021 USD ($)
Operating Loss Carryforwards [Line Items]
General business credits	$ 264
Total tax attributes	332
Consumers Energy Company
Operating Loss Carryforwards [Line Items]
General business credits	83
Total tax attributes	134
Federal Tax Authority
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards	3
Charitable contribution carryforwards	6
Federal Tax Authority | Consumers Energy Company
Operating Loss Carryforwards [Line Items]
Federal net operating loss carryforwards	2
Charitable contribution carryforwards	5
State Tax Authority
Operating Loss Carryforwards [Line Items]
Local net operating loss carryforwards	55
Charitable contribution carryforwards	1
State Tax Authority | Consumers Energy Company
Operating Loss Carryforwards [Line Items]
Local net operating loss carryforwards	43
Charitable contribution carryforwards	1
Local Tax Authority
Operating Loss Carryforwards [Line Items]
Local net operating loss carryforwards	$ 3

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Income Taxes (Narrative) (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Benefits [Line Items]
Interest and penalties	$ 0	$ 0	$ 0
Consumers Energy Company
Income Tax Benefits [Line Items]
Interest and penalties	0	$ 0	$ 0
Local Tax Authority
Income Tax Benefits [Line Items]
Valuation allowance - loss carryforward	$ 2,000,000

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Income Taxes (Reconciliation Of Beginning And Ending Uncertain Tax Benefits) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at beginning of period	$ 25	$ 23	$ 19
Additions for current-year tax positions	2	1	1
Additions for prior-year tax positions	0	3	3
Reductions for prior-year tax positions	0	(2)	0
Balance at end of period	27	25	23
Consumers Energy Company
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Balance at beginning of period	31	34	28
Additions for current-year tax positions	3	1	1
Additions for prior-year tax positions	0	4	5
Reductions for prior-year tax positions	0	(8)	0
Balance at end of period	$ 34	$ 31	$ 34

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Earnings Per Share - CMS Energy (Basic And Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income available to common stockholders
Income from continuing operations	$ 114	$ 153	$ 153	$ 308	$ 138	$ 198	$ 129	$ 229	$ 728	$ 694	$ 633
Income (loss) attributable to noncontrolling interests	$ (5)	$ (6)	$ (5)	$ (7)	$ 4	$ (8)	$ 1	$ 0	(23)	(3)	2
Preferred stock dividends									5	0	0
Income from continuing operations available to common stockholders – basic and diluted									$ 746	$ 697	$ 631
Average common shares outstanding
Weighted average shares - basic (in shares)									289.0	285.0	283.0
Dilutive nonvested stock awards (in shares)									0.5	0.7	0.7
Dilutive forward equity sale contracts (in shares)									0.0	0.6	0.6
Weighted average shares - diluted (in shares)									289.5	286.3	284.3
Income from continuing operations per average common share available to common stockholders - Basic (in dollars per share)	$ 0.40	$ 0.54	$ 0.55	$ 1.09	$ 0.47	$ 0.72	$ 0.45	$ 0.81	$ 2.58	$ 2.45	$ 2.23
Income from continuing operations per average common share available to common stockholders - Diluted (in dollars per share)	$ 0.40	$ 0.54	$ 0.55	$ 1.09	$ 0.47	$ 0.72	$ 0.45	$ 0.80	$ 2.58	$ 2.44	$ 2.22

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Revenue (Disaggregation of Revenue) (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									$ 7,075	$ 6,238	$ 6,403
Leasing income									194	148	174
Financing income									15	17	14
Consumers alternative-revenue programs									45	43	33
Consumers revenues to be refunded										(28)
Total operating revenue	$ 2,033	$ 1,725	$ 1,558	$ 2,013	$ 1,727	$ 1,507	$ 1,382	$ 1,802	7,329	6,418	6,624
Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									4,915	4,348	4,407
Financing income									10	11	9
Consumers alternative-revenue programs									33	29	23
Consumers revenues to be refunded										(16)
Total operating revenue									4,958	4,372	4,439
Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									2,046	1,809	1,922
Financing income									5	6	5
Consumers alternative-revenue programs									12	14	10
Consumers revenues to be refunded										(12)
Total operating revenue									2,063	1,817	1,937
Enterprises | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									114	81	74
Leasing income									194	148	174
Total operating revenue									308	229	248
Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									6,961	6,157	6,329
Financing income									15	17	14
Consumers alternative-revenue programs									45	43	33
Consumers revenues to be refunded										(28)
Total operating revenue									7,021	6,189	6,376
Consumers Energy Company | Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									4,915	4,348	4,407
Financing income									10	11	9
Consumers alternative-revenue programs									33	29	23
Consumers revenues to be refunded										(16)
Total operating revenue									4,958	4,372	4,439
Consumers Energy Company | Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									2,046	1,809	1,922
Financing income									5	6	5
Consumers alternative-revenue programs									12	14	10
Consumers revenues to be refunded										(12)
Total operating revenue									2,063	1,817	1,937
Residential | Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									3,798	3,341	3,304
Residential | Consumers Energy Company | Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									2,402	2,109	1,988
Residential | Consumers Energy Company | Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									1,396	1,232	1,316
Commercial | Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									1,969	1,781	1,874
Commercial | Consumers Energy Company | Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									1,573	1,444	1,502
Commercial | Consumers Energy Company | Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									396	337	372
Industrial | Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									678	616	720
Industrial | Consumers Energy Company | Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									624	570	669
Industrial | Consumers Energy Company | Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									54	46	51
Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									114	81	74
Other | Enterprises | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									114	81	74
Other | Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									516	419	431
Other | Consumers Energy Company | Electric Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									316	225	248
Other | Consumers Energy Company | Gas Utility | Operating Segments
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers									$ 200	$ 194	$ 183

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Revenue (Narrative) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Bad debt expense	$ 22	$ 30	$ 30
Unbilled receivables	486	437
Regulatory liabilities	146	151
Consumers Energy Company
Disaggregation of Revenue [Line Items]
Bad debt expense	22	33	29
Unbilled receivables	486	437
Regulatory liabilities	146	151
Consumers Energy Company | Reserve for customer refunds
Disaggregation of Revenue [Line Items]
Regulatory liabilities	2	28
Accounts Receivable
Disaggregation of Revenue [Line Items]
Bad debt expense	22	33	29
Accounts Receivable | Consumers Energy Company
Disaggregation of Revenue [Line Items]
Bad debt expense	$ 22	$ 33	$ 29

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Other Income and Other Expense (Components of Other Expense) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other Income and Expenses [Line Items]
Donations	$ (6)	$ (35)	$ (3)
Civic and political expenditures	(5)	(5)	(6)
Loss on reacquired and extinguished debt	0	(16)	0
All other	(7)	(6)	(4)
Total other expense	(18)	(62)	(13)
Consumers Energy Company
Other Income and Expenses [Line Items]
Donations	(6)	(33)	(3)
Civic and political expenditures	(5)	(5)	(6)
All other	(7)	(5)	(4)
Total other expense	$ (18)	$ (43)	$ (13)

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Cash And Cash Equivalents (Schedule Of Cash And Cash Equivalents, Including Restricted Amounts) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 452	$ 32
Restricted cash and cash equivalents	24	17
Cash and cash equivalents, including restricted amounts	476	185	$ 157	$ 175
Discontinued Operations, Held-for-sale
Cash and Cash Equivalents [Line Items]
Current assets held for sale	0	136
Consumers Energy Company
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	22	20
Restricted cash and cash equivalents	22	15
Cash and cash equivalents, including restricted amounts	$ 44	$ 35	$ 28	$ 56

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Reportable Segments (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Segment Reporting Information [Line Items]
Operating Revenue	$ 2,033	$ 1,725	$ 1,558	$ 2,013	$ 1,727	$ 1,507	$ 1,382	$ 1,802	$ 7,329	$ 6,418	$ 6,624
Depreciation and amortization									1,114	1,043	989
Income from equity method investees									10	5	10
Interest charges									500	505	460
Income tax expense (benefit)									95	115	131
Net income (loss) available to common stockholders	637	$ 186	$ 176	$ 349	158	$ 218	$ 136	$ 243	1,348	755	680
Plant, property, and equipment, gross	29,893				27,870				29,893	27,870	25,368
Investments in equity method investees	71				70				71	70	71
Total assets	28,753				29,666				28,753	29,666	26,837
Capital expenditures									2,161	2,275	2,139
Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue									7,021	6,189	6,376
Depreciation and amortization									1,077	1,023	975
Interest charges									311	320	297
Income tax expense (benefit)									156	173	185
Net income (loss) available to common stockholders									866	814	741
Plant, property, and equipment, gross	28,771				26,757				28,771	26,757	24,963
Total assets	27,140				25,399				27,140	25,399	23,699
Capital expenditures									2,144	2,167	2,134
Other reconciling items
Segment Reporting Information [Line Items]
Depreciation and amortization									1	1	1
Interest charges									183	179	157
Income tax expense (benefit)									(59)	(54)	(56)
Net income (loss) available to common stockholders									458	(96)	(95)
Plant, property, and equipment, gross	23				21				23	21	20
Total assets	431				3,132				431	3,132	2,740
Capital expenditures									2	1	1
Other reconciling items | Consumers Energy Company
Segment Reporting Information [Line Items]
Depreciation and amortization									1	1	1
Interest charges									0	1	1
Net income (loss) available to common stockholders									(1)	(1)	(1)
Plant, property, and equipment, gross	23				21				23	21	20
Total assets	21				29				21	29	20
Capital expenditures									2	1	1
Electric Utility | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenue									4,958	4,372	4,439
Depreciation and amortization									772	739	713
Interest charges									207	217	213
Income tax expense (benefit)									117	115	134
Net income (loss) available to common stockholders									565	554	509
Plant, property, and equipment, gross	18,147				17,155				18,147	17,155	16,158
Total assets	16,493				15,829				16,493	15,829	14,911
Capital expenditures									1,153	1,281	1,162
Electric Utility | Operating Segments | Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue									4,958	4,372	4,439
Depreciation and amortization									772	739	713
Interest charges									207	217	213
Income tax expense (benefit)									117	115	134
Net income (loss) available to common stockholders									565	554	509
Plant, property, and equipment, gross	18,147				17,155				18,147	17,155	16,158
Total assets	16,555				15,893				16,555	15,893	14,973
Capital expenditures									1,153	1,281	1,162
Gas Utility | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenue									2,063	1,817	1,937
Depreciation and amortization									304	283	261
Interest charges									104	102	83
Income tax expense (benefit)									39	58	51
Net income (loss) available to common stockholders									302	261	233
Plant, property, and equipment, gross	10,601				9,581				10,601	9,581	8,785
Total assets	10,517				9,429				10,517	9,429	8,659
Capital expenditures									989	885	971
Gas Utility | Operating Segments | Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue									2,063	1,817	1,937
Depreciation and amortization									304	283	261
Interest charges									104	102	83
Income tax expense (benefit)									39	58	51
Net income (loss) available to common stockholders									302	261	233
Plant, property, and equipment, gross	10,601				9,581				10,601	9,581	8,785
Total assets	10,564				9,477				10,564	9,477	8,706
Capital expenditures									989	885	971
Enterprises | Operating Segments
Segment Reporting Information [Line Items]
Operating Revenue									308	229	248
Depreciation and amortization									37	20	14
Income from equity method investees									10	5	10
Interest charges									6	7	7
Income tax expense (benefit)									(2)	(4)	2
Net income (loss) available to common stockholders									23	36	33
Plant, property, and equipment, gross	1,122				1,113				1,122	1,113	405
Investments in equity method investees	71				70				71	70	71
Total assets	$ 1,312				$ 1,276				1,312	1,276	527
Capital expenditures									$ 17	$ 108	$ 5

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Related Party Transactions - Consumers (Details)	12 Months Ended
	Dec. 31, 2021 USD ($) MW	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Consumers Energy Company
Related Party Transaction [Line Items]
Purchased power – related parties	$ 77,000,000	$ 64,000,000	$ 75,000,000
Due to related parties	22,000,000	13,000,000
Accounts receivable related parties	$ 7,000,000	$ 16,000,000
Consumers Energy Company | Enterprise Segment Generating Units
Related Party Transaction [Line Items]
Nameplate capacity (in MW) | MW	1,001
Long-term purchase commitment, amount	$ 515,000,000
Consumers Energy Company | Credit Agreement
Related Party Transaction [Line Items]
Interest rate	0.00%
Maximum borrowing capacity	$ 500,000,000
CMS Energy Note Payable
Related Party Transaction [Line Items]
Interest rate	4.10%
CMS Energy Note Payable | Consumers Energy Company
Related Party Transaction [Line Items]
Interest rate	4.10%

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Variable Interest Entities (Narrative) (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) MW	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Variable Interest Entity [Line Items]
Investments	$ 71	$ 70	$ 71
Variable Interest Entity, Primary Beneficiary | Aviator Wind
Variable Interest Entity [Line Items]
Ownership interest	51.00%
Nameplate capacity (in MW) | MW	525
Variable Interest Entity, Primary Beneficiary | Aviator Wind Class B Membership
Variable Interest Entity [Line Items]
Noncontrolling ownership interest	49.00%
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Investments	$ 71	$ 70
Variable Interest Entity, Not Primary Beneficiary | T.E.S. Filer City
Variable Interest Entity [Line Items]
Ownership interest	50.00%
Variable Interest Entity, Not Primary Beneficiary | Grayling
Variable Interest Entity [Line Items]
Ownership interest	50.00%
Variable Interest Entity, Not Primary Beneficiary | Genesee
Variable Interest Entity [Line Items]
Ownership interest	50.00%
Variable Interest Entity, Not Primary Beneficiary | Craven
Variable Interest Entity [Line Items]
Ownership interest	50.00%

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Variable Interest Entities (Consolidated Information of Variable Interest Entity) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Variable Interest Entity [Line Items]
Cash and cash equivalents	$ 452	$ 32
Accounts receivable	931	853
Prepayments and other current assets	120	104
Plant, property, and equipment, net	22,352	21,017
Total Assets	28,753	29,666	$ 26,837
Accounts payable	875	661
Asset retirement obligations	628	553
Variable Interest Entity, Primary Beneficiary
Variable Interest Entity [Line Items]
Cash and cash equivalents	20	7
Accounts receivable	3	5
Prepayments and other current assets	1	1
Plant, property, and equipment, net	671	692
Total Assets	695	705
Accounts payable	15	3
Asset retirement obligations	20	19
Total liabilities	$ 35	$ 22

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Exit Activities and Discontinued Operations - Narrative (Details) - USD ($) $ in Millions		1 Months Ended	12 Months Ended			27 Months Ended
	Oct. 01, 2021	Oct. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
Discontinued Operations, Held-for-sale | EnerBank
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of businesses	$ 1,000
Gain from divestiture of business		$ 657	$ 657	$ 0	$ 0
Post-closing purchase price adjustment			36			$ 36
Retention Benefits | D.E. Karn Generating Complex
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Expected cost			35			35
Retention and severance costs			0	13		16
Costs incurred and capitalized			1	$ 2
Retention Benefits | D.E. Karn Generating Complex | Retention Incentive Program
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Regulatory asset			$ 7			7
Retention Benefits | D.E. Karn Generating Complex | Property, Plant and Equipment
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Costs incurred and capitalized						$ 4

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Exit Activities and Discontinued Operations - Schedule of Retention Benefit Liability Roll Forward (Details) - USD ($) $ in Millions	12 Months Ended		27 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2021
Restructuring Reserve [Roll Forward]
Other current liabilities	$ 156	$ 133	$ 156
Retention Benefits | D.E. Karn Generating Complex
Restructuring Reserve [Roll Forward]
Retention benefit liability at beginning of period	11	4
Costs incurred and charged to maintenance and other operating expenses	0	13	16
Costs deferred as a regulatory asset	7	0
Costs incurred and capitalized	1	2
Costs paid or settled	(5)	(8)
Retention benefit liability at the end of the period	14	11	14
Other current liabilities	$ 5	$ 3	$ 5

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Exit Activities and Discontinued Operations - Income from Discontinued Operations (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended								12 Months Ended
	Oct. 31, 2021	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Income tax expense										$ 170	$ 18	$ 16
Income from discontinued operations, net of tax		$ 520	$ 30	$ 18	$ 34	$ 24	$ 12	$ 8	$ 14	602	58	49
Discontinued Operations, Held-for-sale | EnerBank
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Operating revenue										209	262	221
Operating expenses										60	130	97
Interest expense										34	56	59
Income before income taxes										115	76	65
Gain on sale	$ 657									657	0	0
Income from discontinued operations before income taxes										772	76	65
Income tax expense										170	18	16
Income from discontinued operations, net of tax										$ 602	$ 58	$ 49

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Exit Activities and Discontinued Operations - Assets and Liabilities of Discontinued Operation (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Current
Total current assets	$ 19	$ 429
Non‑current
Total non‑current assets	0	2,680
Current
Total current liabilities	0	953
Non‑current
Total non‑current liabilities	0	1,894
Discontinued Operations, Held-for-sale
Current
Cash and cash equivalents	$ 0	136
Discontinued Operations, Held-for-sale | EnerBank
Current
Cash and cash equivalents		136
Accounts receivable and other current assets		18
Notes receivable, less allowance of $32		275
Total current assets		429
Non‑current
Plant, property, and equipment, net		22
Notes receivable, less allowance of $91		2,612
Other non‑current assets		46
Total non‑current assets		2,680
Total assets		3,109
Current
Current portion of long-term debt		915
Accounts payable and other current liabilities		38
Total current liabilities		953
Non‑current
Long-term debt		1,890
Other non‑current liabilities		4
Total non‑current liabilities		1,894
Total liabilities		2,847
Notes receivable, allowance, current		32
Notes receivable, allowance, noncurrent		$ 91

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Quarterly Financial And Common Stock Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Quarterly Financial Data [Abstract]
Operating Revenue	$ 2,033	$ 1,725	$ 1,558	$ 2,013	$ 1,727	$ 1,507	$ 1,382	$ 1,802	$ 7,329	$ 6,418	$ 6,624
Operating income	204	260	252	430	307	340	248	335	1,146	1,230	1,115
Income from continuing operations	114	153	153	308	138	198	129	229	728	694	633
Income From Discontinued Operations, Net of Tax	520	30	18	34	24	12	8	14	602	58	49
Net Income	634	183	171	342	162	210	137	243	1,330	752	682
Income (loss) attributable to noncontrolling interests	(5)	(6)	(5)	(7)	4	(8)	1	0	(23)	(3)	2
Net Income Attributable to CMS Energy	639	189	176	349					1,353	755	680
Preferred Stock Dividends	2	3	0	0					5	0	0
Net Income Available to Common Stockholders	$ 637	$ 186	$ 176	$ 349	$ 158	$ 218	$ 136	$ 243	$ 1,348	$ 755	$ 680
Income from continuing operations per average common share available to common stockholders - Basic (in dollars per share)	$ 0.40	$ 0.54	$ 0.55	$ 1.09	$ 0.47	$ 0.72	$ 0.45	$ 0.81	$ 2.58	$ 2.45	$ 2.23
Income from discontinued operations per average common share available to common stockholders - Basic (in dollars per share)	1.80	0.10	0.06	0.12	0.08	0.04	0.03	0.05	2.08	0.20	0.17
Basic earnings per average common share (in dollars per share)	2.20	0.64	0.61	1.21	0.55	0.76	0.48	0.86	4.66	2.65	2.40
Income from continuing operations per average common share available to common stockholders - Diluted (in dollars per share)	0.40	0.54	0.55	1.09	0.47	0.72	0.45	0.80	2.58	2.44	2.22
Income from discontinued operations per average common share available to common stockholders - Diluted (in dollars per share)	1.80	0.10	0.06	0.12	0.08	0.04	0.03	0.05	2.08	0.20	0.17
Diluted earnings per average common share (in dollars per share)	$ 2.20	$ 0.64	$ 0.61	$ 1.21	$ 0.55	$ 0.76	$ 0.48	$ 0.85	$ 4.66	$ 2.64	$ 2.39

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Schedule I - Condensed Financial Information of Registrant (Condensed Statements of Income) (Details) - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Operating Expenses
Other operating expense									$ (1,610)	$ (1,280)	$ (1,356)
Total operating expenses									(6,183)	(5,188)	(5,509)
Operating Loss	$ 204	$ 260	$ 252	$ 430	$ 307	$ 340	$ 248	$ 335	1,146	1,230	1,115
Other Income (Expense)
Non-operating retirement benefits, net									165	118	91
Interest income									3	4	7
Other income									9	6	4
Other expense									(18)	(62)	(13)
Total other income									177	84	109
Interest Charges
Interest on long-term debt									481	483	439
Intercompany interest expense and other									10	12	16
Total interest charges									500	505	460
Income Before Income Taxes									823	809	764
Income tax expense (benefit)									95	115	131
Income From Continuing Operations	114	153	153	308	138	198	129	229	728	694	633
Income From Discontinued Operations, Net of Tax	520	30	18	34	24	12	8	14	602	58	49
Net Income Attributable to CMS Energy	639	189	176	349					1,353	755	680
Preferred Stock Dividends	2	3	0	0					5	0	0
Net Income Available to Common Stockholders	$ 637	$ 186	$ 176	$ 349	$ 158	$ 218	$ 136	$ 243	1,348	755	680
CMS Energy
Operating Expenses
Other operating expense									(7)	(6)	(38)
Total operating expenses									(7)	(6)	(38)
Operating Loss									(7)	(6)	(38)
Other Income (Expense)
Equity earnings of subsidiaries									1,482	909	826
Non-operating retirement benefits, net									(1)	(1)	(1)
Interest income									1	1	1
Other income									1	1	1
Other expense									0	(19)	0
Total other income									1,483	891	827
Interest Charges
Interest on long-term debt									183	178	156
Intercompany interest expense and other									7	7	10
Total interest charges									190	185	166
Income Before Income Taxes									1,286	700	623
Income tax expense (benefit)									(60)	(55)	(57)
Income From Continuing Operations									1,346	755	680
Income From Discontinued Operations, Net of Tax									7	0	0
Net Income Attributable to CMS Energy									1,353	755	680
Preferred Stock Dividends									5	0	0
Net Income Available to Common Stockholders									$ 1,348	$ 755	$ 680

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Schedule 1 - Condensed Financial Information of Registrant (Condensed Statements of Income - Parenthetical) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Income Statements, Captions [Line Items]
Tax effect of discontinued operations	$ 170	$ 18	$ 16
CMS Energy
Condensed Income Statements, Captions [Line Items]
Tax effect of discontinued operations	$ (5)	$ 0	$ 0

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Schedule I - Condensed Financial Information of Registrant (Condensed Statements Of Cash Flows) (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash Flows from Operating Activities
Net cash provided by operating activities	$ 1,819	$ 1,276	$ 1,790
Cash Flows from Investing Activities
Net cash used in investing activities	(1,233)	(2,867)	(2,816)
Cash Flows from Financing Activities
Proceeds from issuance of debt	335	3,179	2,151
Issuance of common stock, net of issuance costs	26	253	12
Issuance of preferred stock, net of issuance costs	224	0	0
Retirement of long-term debt	(235)	(2,010)	(1,285)
Debt prepayment costs	0	(59)	(8)
Payment of dividends on common and preferred stock	(509)	(467)	(436)
Net cash provided by (used in) financing activities	(295)	1,619	1,008
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts	291	28	(18)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	185	157	175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	476	185	157
CMS Energy
Cash Flows from Operating Activities
Net cash provided by operating activities	1,549	507	697
Cash Flows from Investing Activities
Investment in subsidiaries	(581)	(657)	(683)
Increase in notes receivable – intercompany	(83)	(307)	0
Net cash used in investing activities	(664)	(964)	(683)
Cash Flows from Financing Activities
Proceeds from issuance of debt	0	1,225	1,158
Issuance of common stock, net of issuance costs	26	253	12
Issuance of preferred stock, net of issuance costs	224	0	0
Retirement of long-term debt	(200)	(425)	(738)
Debt prepayment costs	0	(16)	0
Payment of dividends on common and preferred stock	(507)	(465)	(434)
Debt issuance costs and financing fees	(10)	(10)	(18)
Change in notes payable – intercompany	(28)	(105)	6
Net cash provided by (used in) financing activities	(495)	457	(14)
Net Increase (Decrease) in Cash and Cash Equivalents, Including Restricted Amounts	390	0	0
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	0	0	0
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	$ 390	$ 0	$ 0

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Schedule I - Condensed Financial Information of Registrant (Condensed Balance Sheets) (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 452	$ 32
Accounts receivable – intercompany and related parties	12	19
Prepayments and other current assets	120	104
Total current assets	2,627	2,404
Other Non‑current Assets
Other	1,414	823
Total other non‑current assets	3,774	6,245
Total Assets	28,753	29,666	$ 26,837
Current Liabilities
Accounts and notes payable – intercompany	11	7
Accrued interest, including intercompany	107	104
Accrued taxes	515	454
Other current liabilities	156	133
Total current liabilities	2,204	3,074
Non‑current Liabilities
Long-term debt	12,046	11,744
Postretirement benefits	142	152
Other non‑current liabilities	375	394
Total non‑current liabilities	19,361	20,515
Equity
Total common stockholders’ equity	6,407	5,496
Preferred stock	224	0
Total stockholders’ equity	6,631	5,496
Total Liabilities and Equity	28,753	29,666
CMS Energy
Current Assets
Cash and cash equivalents	390	0
DB SERP note receivable – related party	463	358
Accounts receivable – intercompany and related parties	5	3
Accrued taxes	0	48
Prepayments and other current assets	1	1
Total current assets	859	410
Other Non‑current Assets
Deferred income taxes	147	91
Investments in subsidiaries	9,870	9,372
Other investments	6	5
Other	8	5
Total other non‑current assets	10,031	9,473
Total Assets	10,890	9,883
Current Liabilities
Current portion of long-term debt	0	200
Accounts and notes payable – intercompany	61	69
Accrued interest, including intercompany	33	33
Accrued taxes	83	0
Other current liabilities	8	9
Total current liabilities	185	311
Non‑current Liabilities
Long-term debt	3,928	3,926
Notes payable – intercompany	112	116
Postretirement benefits	19	21
Other non‑current liabilities	15	13
Total non‑current liabilities	4,074	4,076
Equity
Total common stockholders’ equity	6,407	5,496
Preferred stock	224	0
Total stockholders’ equity	6,631	5,496
Total Liabilities and Equity	$ 10,890	$ 9,883

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Schedule I - Condensed Financial Information of Registrant (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Condensed Financial Statements, Captions [Line Items]
Issuance of preferred stock, net of issuance costs	$ 224	$ 0	$ 0
Series C Preferred Stock Depositary Shares
Condensed Financial Statements, Captions [Line Items]
Number of shares outstanding (in shares)	9,200,000
Trading symbol	CMS PRC
Issue price (in dollars per share)	$ 25.00
Issuance of preferred stock, net of issuance costs	$ 224
Dividend rate	4.20%
Optional redemption price (in dollars per share)	$ 25.00
Series C Preferred Stock
Condensed Financial Statements, Captions [Line Items]
Optional redemption price (in dollars per share)	$ 25,000
CMS Energy
Condensed Financial Statements, Captions [Line Items]
Maximum potential obligation	$ 633
Issuance of preferred stock, net of issuance costs	$ 224	$ 0	$ 0
CMS Energy Note Payable
Condensed Financial Statements, Captions [Line Items]
Interest rate	4.10%

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Schedule II - Valuation and Qualifying Accounts and Reserves (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Allowance for uncollectible accounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	$ 29	$ 20	$ 20
Charged to Expense	22	33	29
Charged to Other Accounts	0	0	0
Deductions	31	24	29
Balance at End of Period	20	29	20
Allowance for uncollectible accounts | Consumers Energy Company
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	29	20	20
Charged to Expense	22	33	29
Charged to Other Accounts	0	0	0
Deductions	31	24	29
Balance at End of Period	20	29	20
Deferred tax valuation allowance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at Beginning of Period	1	2	8
Charged to Expense	1	0	0
Charged to Other Accounts	0	0	0
Deductions	0	1	6
Balance at End of Period	$ 2	$ 1	$ 2