Asset Retirement Obligations

12 Months Ended

Dec. 31, 2023

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:

ARO Description	In-Service Date	Long-Lived Assets
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

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2022			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2023
CMS Energy, including Consumers
Consumers		$	722		$	4		$	(28)		$	32		$	9		$	739
Renewable generation assets		24			7			—			1			—			32
Total CMS Energy		$	746		$	11		$	(28)		$	33		$	9		$	771
Consumers
Coal ash disposal areas		$	272		$	—		$	(15)		$	11		$	—		$	268
Gas distribution cut, purge, and cap		287			—			(10)			14			(1)			290
Asbestos abatement		39			—			(1)			3			10			51
Renewable generation assets		95			4			—			3			—			102
Gas wells plug and abandon		29			—			(2)			1			—			28
Total Consumers		$	722		$	4		$	(28)		$	32		$	9		$	739

In Millions
Company and ARO Description	ARO Liability 12/31/2021			Incurred			Settled			Accretion			Cash Flow Revisions1			ARO Liability 12/31/2022
CMS Energy, including Consumers
Consumers		$	605		$	1		$	(39)		$	27		$	128		$	722
Renewable generation assets		23			—			—			1			—			24
Total CMS Energy		$	628		$	1		$	(39)		$	28		$	128		$	746
Consumers
Coal ash disposal areas		$	157		$	—		$	(20)		$	7		$	128		$	272
Gas distribution cut, purge, and cap		282			1			(11)			15			—			287
Asbestos abatement		38			—			(1)			2			—			39
Renewable generation assets		93			—			—			2			—			95
Gas wells plug and abandon		35			—			(7)			1			—			29
Total Consumers		$	605		$	1		$	(39)		$	27		$	128		$	722

1Increase was attributable to a proposed change for closure work at the J.H. Campbell 3 ash disposal landfill and an updated cost estimate for other coal ash disposal areas.

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:

ARO Description	In-Service Date	Long-Lived Assets
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

Presented in the following tables are the changes in CMS Energy’s and Consumers’ ARO liabilities:

In Millions
Company and ARO Description	ARO Liability 12/31/2022			Incurred			Settled			Accretion			Cash Flow Revisions			ARO Liability 12/31/2023
CMS Energy, including Consumers
Consumers		$	722		$	4		$	(28)		$	32		$	9		$	739
Renewable generation assets		24			7			—			1			—			32
Total CMS Energy		$	746		$	11		$	(28)		$	33		$	9		$	771
Consumers
Coal ash disposal areas		$	272		$	—		$	(15)		$	11		$	—		$	268
Gas distribution cut, purge, and cap		287			—			(10)			14			(1)			290
Asbestos abatement		39			—			(1)			3			10			51
Renewable generation assets		95			4			—			3			—			102
Gas wells plug and abandon		29			—			(2)			1			—			28
Total Consumers		$	722		$	4		$	(28)		$	32		$	9		$	739

In Millions
Company and ARO Description	ARO Liability 12/31/2021			Incurred			Settled			Accretion			Cash Flow Revisions1			ARO Liability 12/31/2022
CMS Energy, including Consumers
Consumers		$	605		$	1		$	(39)		$	27		$	128		$	722
Renewable generation assets		23			—			—			1			—			24
Total CMS Energy		$	628		$	1		$	(39)		$	28		$	128		$	746
Consumers
Coal ash disposal areas		$	157		$	—		$	(20)		$	7		$	128		$	272
Gas distribution cut, purge, and cap		282			1			(11)			15			—			287
Asbestos abatement		38			—			(1)			2			—			39
Renewable generation assets		93			—			—			2			—			95
Gas wells plug and abandon		35			—			(7)			1			—			29
Total Consumers		$	605		$	1		$	(39)		$	27		$	128		$	722

1Increase was attributable to a proposed change for closure work at the J.H. Campbell 3 ash disposal landfill and an updated cost estimate for other coal ash disposal areas.