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Financings and Capitalization
 9 Months Ended
Sep. 30, 2023
Debt Instrument [Line Items]  
Financings and Capitalization Financings and Capitalization
Financings: Presented in the following table is a summary of major long-term debt issuances during the nine months ended September 30, 2023:
Principal
(In Millions)		Interest Rate (%)Issuance DateMaturity Date
CMS Energy, parent only
Convertible senior notes$800 3.375 May 2023May 2028
Total CMS Energy, parent only$800 
NorthStar Clean Energy, including subsidiaries
Term loan facility1
$85 variableFebruary 2023November 2023
Total NorthStar Clean Energy, including subsidiaries$85 
Consumers
First mortgage bonds$425 4.650 January 2023March 2028
First mortgage bonds700 4.625 February 2023May 2033
First mortgage bonds115 5.240 May 2023May 2026
First mortgage bonds50 5.070 May 2023May 2029
First mortgage bonds95 5.170 May 2023May 2032
First mortgage bonds140 5.380 May 2023May 2037
First mortgage bonds500 4.900 August 2023February 2029
Total Consumers$2,025 
Total CMS Energy$2,910 
1    In December 2022, a subsidiary of NorthStar Clean Energy entered into a $185 million unsecured term loan credit agreement. Under this credit agreement, a subsidiary of NorthStar Clean Energy borrowed $85 million in 2023.
Issuance of Convertible Senior Notes: In May 2023, CMS Energy issued an aggregate principal amount of $800 million convertible senior notes that bear an interest rate of 3.375 percent and mature in May 2028 unless redeemed, repurchased, or converted earlier. Unamortized debt costs associated with this issuance were $12 million at September 30, 2023. The convertible senior notes rank equal in right of payment to any of CMS Energy’s unsecured indebtedness that is not subordinated. There are no sinking fund requirements for the notes.
Holders of the convertible senior notes may convert their notes at their option in accordance with the conditions outlined in the related indenture. CMS Energy will settle conversions of the notes by paying cash up to the aggregate principal amount of the notes to be converted and paying or delivering, as the case may be, cash, shares of CMS Energy common stock, or a combination of cash and shares of CMS Energy common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes being converted. The conversion rate for the notes is initially 13.5194 shares of common stock per $1,000 principal amount of notes which is equivalent to an initial conversion price of approximately $73.97 per share of common stock. The conversion rate will be subject to adjustment for anti-dilutive events and fundamental change and redemption provisions as described in the related indenture.
CMS Energy may redeem for cash all or any portion of the notes, at its option, on or after May 6, 2026 if the last reported sale price of its common stock has been at least 130 percent of the conversion price then
in effect for at least 20 trading days during any 30 consecutive trading day period. Holders of the convertible senior notes may require CMS Energy to repurchase for cash all or any portion of their notes if a fundamental change, as outlined in the related indenture, occurs. In both cases, CMS Energy will redeem or repurchase the notes at a price equal to 100 percent of the principal amount of the notes to be redeemed or repurchased, plus accrued and unpaid interest.
Retirements: Presented in the following table is a summary of major long-term debt retirements during the nine months ended September 30, 2023:
Principal
(In Millions)		Interest Rate (%)Retirement DateMaturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility1
$14 variableAugust 2023November 2023
Total NorthStar Clean Energy, including subsidiaries$14 
Consumers
Term loan facility$1,000 variableFebruary 2023January 2024
First mortgage bonds300 0.350June 2023June 2023
First mortgage bonds325 3.375 August 2023August 2023
Total Consumers$1,625 
1    As of September 30, 2023, there was $171 million of loans outstanding bearing an interest rate of 6.416 percent under the unsecured term loan credit agreement.
In October 2023, a subsidiary of NorthStar Clean Energy repaid $66 million of its term loan of with a maturity of November 2023.
CMS Energy’s Purchase of Consumers’ First Mortgage Bonds: During the nine months ended September 30, 2023, CMS Energy purchased the following Consumers’ first mortgage bonds for $192 million:
Repurchase Date
Principal
(In Millions)
Interest Rate
(%)
May 2023First mortgage bonds due 2060$150 2.500 
May 2023First mortgage bonds due 205288 2.650 
August 2023First mortgage bonds due 205023 3.750 
August 2023First mortgage bonds due 205215 2.650 
September 2023First mortgage bonds due 205018 3.100 
September 2023First mortgage bonds due 20513 3.500 
On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds was accounted for as a debt extinguishment and resulted in a pre-tax gain of $17 million for the three months ended September 30, 2023 and a pre-tax gain of $101 million for the nine months ended September 30, 2023, which were recorded in other income on its consolidated statements of income.
Consumers’ outstanding debt held by its parent as a result of CMS Energy’s repurchase of Consumers’ first mortgage bonds was $294 million, net of unamortized discount and fees, which was recorded as long-term debt – related parties on Consumers’ consolidated balance sheet at September 30, 2023.
Credit Facilities: The following credit facilities with banks were available at September 30, 2023:
In Millions
Expiration DateAmount of FacilityAmount BorrowedLetters of Credit OutstandingAmount Available
CMS Energy, parent only
December 14, 20271
$550 $— $20 $530 
September 22, 2024
50 — 50 — 
NorthStar Clean Energy, including subsidiaries
September 25, 20252
$37 $— $37 $— 
Consumers3
December 14, 2027
$1,100 $— $27 $1,073 
November 18, 2024
250 — 68 182 
1There were no borrowings under this facility during the nine months ended September 30, 2023.
2This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 11, Variable Interest Entities.
3Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the nine months ended September 30, 2023.
Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In March 2023, FERC granted Consumers the authority to issue securities between April 1, 2023 and March 31, 2025.
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 September 30, 2023, there were $247 million commercial paper notes outstanding under this program with a weighted-average annual interest rate of 5.529 percent, recorded as current notes payable on the consolidated balance sheets of CMS Energy and Consumers.
In December 2022, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of the prior month’s average one-month Term SOFR minus 0.100 percent. At September 30, 2023, there were $63 million outstanding borrowings under the agreement bearing an interest rate of 5.218 percent.
An unregulated subsidiary of Consumers entered into a short-term credit agreement with NorthStar Clean Energy, permitting it to borrow up to $40 million, from NorthStar Clean Energy, at an interest rate of one‑month Term SOFR plus 1.750 percent. At September 30, 2023, outstanding borrowings under the agreement were $12 million bearing an interest rate of 7.079 percent.
Consumers’ Supplier Financing Program: Under a supplier financing program, Consumers agrees to pay a bank, acting as its payment agent, the stated amount of confirmed invoices from participating suppliers on the original maturity dates of the invoices. The supplier invoices that have been confirmed as valid under the program require payment in full within 60 days of the invoice date. Consumers does not provide collateral or a guarantee to the bank in support of its payment obligations under the agreement, nor does it pay a fee for the service. Consumers or the bank may terminate the supplier financing program agreement upon 30 days prior written notice to the other party. There were no trade payables outstanding under the program in accounts payable on CMS Energy’s and Consumers’ consolidated balance sheets at September 30, 2023, and less than $1 million at December 31, 2022.
Dividend Restrictions: At September 30, 2023, payment of dividends by CMS Energy on its common stock was limited to $7.0 billion under provisions of the Michigan Business Corporation Act of 1972.
Under the provisions of its articles of incorporation, at September 30, 2023, Consumers had $2.0 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 nine months ended September 30, 2023, Consumers paid $461 million in dividends on its common stock to CMS Energy.
Issuance of Common Stock: Presented in the following table are details of CMS Energy’s forward sales contracts under its equity offering program at September 30, 2023:
Forward Price Per Share
Contract DateMaturity DateNumber of SharesInitialSeptember 30, 2023
August 3, 2022December 31, 20242,944,207$67.59 $68.54 
August 24, 2022December 31, 20241,677,93869.46 70.54 
August 29, 2022December 31, 20241,783,38868.18 69.18 
Under these contracts, CMS Energy may either settle physically by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or settle net by delivering or receiving 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 or net cash settle the contracts as of September 30, 2023, CMS Energy would not have been required to deliver shares or pay cash.
Consumers Energy Company  
Debt Instrument [Line Items]  
Financings and Capitalization Financings and Capitalization
Financings: Presented in the following table is a summary of major long-term debt issuances during the nine months ended September 30, 2023:
Principal
(In Millions)		Interest Rate (%)Issuance DateMaturity Date
CMS Energy, parent only
Convertible senior notes$800 3.375 May 2023May 2028
Total CMS Energy, parent only$800 
NorthStar Clean Energy, including subsidiaries
Term loan facility1
$85 variableFebruary 2023November 2023
Total NorthStar Clean Energy, including subsidiaries$85 
Consumers
First mortgage bonds$425 4.650 January 2023March 2028
First mortgage bonds700 4.625 February 2023May 2033
First mortgage bonds115 5.240 May 2023May 2026
First mortgage bonds50 5.070 May 2023May 2029
First mortgage bonds95 5.170 May 2023May 2032
First mortgage bonds140 5.380 May 2023May 2037
First mortgage bonds500 4.900 August 2023February 2029
Total Consumers$2,025 
Total CMS Energy$2,910 
1    In December 2022, a subsidiary of NorthStar Clean Energy entered into a $185 million unsecured term loan credit agreement. Under this credit agreement, a subsidiary of NorthStar Clean Energy borrowed $85 million in 2023.
Issuance of Convertible Senior Notes: In May 2023, CMS Energy issued an aggregate principal amount of $800 million convertible senior notes that bear an interest rate of 3.375 percent and mature in May 2028 unless redeemed, repurchased, or converted earlier. Unamortized debt costs associated with this issuance were $12 million at September 30, 2023. The convertible senior notes rank equal in right of payment to any of CMS Energy’s unsecured indebtedness that is not subordinated. There are no sinking fund requirements for the notes.
Holders of the convertible senior notes may convert their notes at their option in accordance with the conditions outlined in the related indenture. CMS Energy will settle conversions of the notes by paying cash up to the aggregate principal amount of the notes to be converted and paying or delivering, as the case may be, cash, shares of CMS Energy common stock, or a combination of cash and shares of CMS Energy common stock, at its election, in respect of the remainder, if any, of its conversion obligation in excess of the aggregate principal amount of the notes being converted. The conversion rate for the notes is initially 13.5194 shares of common stock per $1,000 principal amount of notes which is equivalent to an initial conversion price of approximately $73.97 per share of common stock. The conversion rate will be subject to adjustment for anti-dilutive events and fundamental change and redemption provisions as described in the related indenture.
CMS Energy may redeem for cash all or any portion of the notes, at its option, on or after May 6, 2026 if the last reported sale price of its common stock has been at least 130 percent of the conversion price then
in effect for at least 20 trading days during any 30 consecutive trading day period. Holders of the convertible senior notes may require CMS Energy to repurchase for cash all or any portion of their notes if a fundamental change, as outlined in the related indenture, occurs. In both cases, CMS Energy will redeem or repurchase the notes at a price equal to 100 percent of the principal amount of the notes to be redeemed or repurchased, plus accrued and unpaid interest.
Retirements: Presented in the following table is a summary of major long-term debt retirements during the nine months ended September 30, 2023:
Principal
(In Millions)		Interest Rate (%)Retirement DateMaturity Date
NorthStar Clean Energy, including subsidiaries
Term loan facility1
$14 variableAugust 2023November 2023
Total NorthStar Clean Energy, including subsidiaries$14 
Consumers
Term loan facility$1,000 variableFebruary 2023January 2024
First mortgage bonds300 0.350June 2023June 2023
First mortgage bonds325 3.375 August 2023August 2023
Total Consumers$1,625 
1    As of September 30, 2023, there was $171 million of loans outstanding bearing an interest rate of 6.416 percent under the unsecured term loan credit agreement.
In October 2023, a subsidiary of NorthStar Clean Energy repaid $66 million of its term loan of with a maturity of November 2023.
CMS Energy’s Purchase of Consumers’ First Mortgage Bonds: During the nine months ended September 30, 2023, CMS Energy purchased the following Consumers’ first mortgage bonds for $192 million:
Repurchase Date
Principal
(In Millions)
Interest Rate
(%)
May 2023First mortgage bonds due 2060$150 2.500 
May 2023First mortgage bonds due 205288 2.650 
August 2023First mortgage bonds due 205023 3.750 
August 2023First mortgage bonds due 205215 2.650 
September 2023First mortgage bonds due 205018 3.100 
September 2023First mortgage bonds due 20513 3.500 
On a consolidated basis, CMS Energy’s repurchase of Consumers’ first mortgage bonds was accounted for as a debt extinguishment and resulted in a pre-tax gain of $17 million for the three months ended September 30, 2023 and a pre-tax gain of $101 million for the nine months ended September 30, 2023, which were recorded in other income on its consolidated statements of income.
Consumers’ outstanding debt held by its parent as a result of CMS Energy’s repurchase of Consumers’ first mortgage bonds was $294 million, net of unamortized discount and fees, which was recorded as long-term debt – related parties on Consumers’ consolidated balance sheet at September 30, 2023.
Credit Facilities: The following credit facilities with banks were available at September 30, 2023:
In Millions
Expiration DateAmount of FacilityAmount BorrowedLetters of Credit OutstandingAmount Available
CMS Energy, parent only
December 14, 20271
$550 $— $20 $530 
September 22, 2024
50 — 50 — 
NorthStar Clean Energy, including subsidiaries
September 25, 20252
$37 $— $37 $— 
Consumers3
December 14, 2027
$1,100 $— $27 $1,073 
November 18, 2024
250 — 68 182 
1There were no borrowings under this facility during the nine months ended September 30, 2023.
2This letter of credit facility is available to Aviator Wind Equity Holdings. For more information regarding Aviator Wind Equity Holdings, see Note 11, Variable Interest Entities.
3Obligations under these facilities are secured by first mortgage bonds of Consumers. There were no borrowings under these facilities during the nine months ended September 30, 2023.
Regulatory Authorization for Financings: Consumers is required to maintain FERC authorization for financings. Any long-term issuances during the authorization period are exempt from FERC’s competitive bidding and negotiated placement requirements. In March 2023, FERC granted Consumers the authority to issue securities between April 1, 2023 and March 31, 2025.
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 September 30, 2023, there were $247 million commercial paper notes outstanding under this program with a weighted-average annual interest rate of 5.529 percent, recorded as current notes payable on the consolidated balance sheets of CMS Energy and Consumers.
In December 2022, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $500 million at an interest rate of the prior month’s average one-month Term SOFR minus 0.100 percent. At September 30, 2023, there were $63 million outstanding borrowings under the agreement bearing an interest rate of 5.218 percent.
An unregulated subsidiary of Consumers entered into a short-term credit agreement with NorthStar Clean Energy, permitting it to borrow up to $40 million, from NorthStar Clean Energy, at an interest rate of one‑month Term SOFR plus 1.750 percent. At September 30, 2023, outstanding borrowings under the agreement were $12 million bearing an interest rate of 7.079 percent.
Consumers’ Supplier Financing Program: Under a supplier financing program, Consumers agrees to pay a bank, acting as its payment agent, the stated amount of confirmed invoices from participating suppliers on the original maturity dates of the invoices. The supplier invoices that have been confirmed as valid under the program require payment in full within 60 days of the invoice date. Consumers does not provide collateral or a guarantee to the bank in support of its payment obligations under the agreement, nor does it pay a fee for the service. Consumers or the bank may terminate the supplier financing program agreement upon 30 days prior written notice to the other party. There were no trade payables outstanding under the program in accounts payable on CMS Energy’s and Consumers’ consolidated balance sheets at September 30, 2023, and less than $1 million at December 31, 2022.
Dividend Restrictions: At September 30, 2023, payment of dividends by CMS Energy on its common stock was limited to $7.0 billion under provisions of the Michigan Business Corporation Act of 1972.
Under the provisions of its articles of incorporation, at September 30, 2023, Consumers had $2.0 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 nine months ended September 30, 2023, Consumers paid $461 million in dividends on its common stock to CMS Energy.
Issuance of Common Stock: Presented in the following table are details of CMS Energy’s forward sales contracts under its equity offering program at September 30, 2023:
Forward Price Per Share
Contract DateMaturity DateNumber of SharesInitialSeptember 30, 2023
August 3, 2022December 31, 20242,944,207$67.59 $68.54 
August 24, 2022December 31, 20241,677,93869.46 70.54 
August 29, 2022December 31, 20241,783,38868.18 69.18 
Under these contracts, CMS Energy may either settle physically by issuing shares of its common stock at the then-applicable forward sale price specified by the agreement or settle net by delivering or receiving 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 or net cash settle the contracts as of September 30, 2023, CMS Energy would not have been required to deliver shares or pay cash.