Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

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	2023				2022				2021
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	954			$	902			$	823
Income tax expense at statutory rate		200				189				173
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		31				51				39
Renewable energy tax credits		(58)				(51)				(44)
TCJA excess deferred taxes2		(40)				(65)				(50)
Taxes attributable to noncontrolling interests		17				5				5
Accelerated flow-through of regulatory tax benefits3		—				(39)				(28)
Other, net		(3)				3				—
Income tax expense		$	147			$	93			$	95
Effective tax rate		15.4		%		10.3		%		11.5		%
Consumers
Income from continuing operations before income taxes		$	1,028			$	1,085			$	1,024
Income tax expense at statutory rate		216				228				215
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		36				59				54
Renewable energy tax credits		(46)				(46)				(37)
TCJA excess deferred taxes2		(40)				(65)				(50)
Accelerated flow-through of regulatory tax benefits3		—				(39)				(28)
Other, net		(5)				3				2
Income tax expense		$	161			$	140			$	156
Effective tax rate		15.7		%		12.9		%		15.2		%

1CMS Energy initiated a plan to divest immaterial business activities in a non‑Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction after 2023. As a result of these actions, CMS Energy reversed a $13 million non‑Michigan reserve, all of which was recognized at Consumers.

2In 2020, the MPSC authorized Consumers to accelerate the amortization of the gas portion of its regulatory liability associated with unprotected, non-property-related excess deferred income taxes resulting from the TCJA. This portion of the regulatory liability was fully amortized in 2022.

3In 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 were fully amortized in 2022.

Summary of 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	2023			2022			2021
CMS Energy, including Consumers
Current income taxes
Federal		$	5		$	6		$	(1)
State and local		1			—			1
		$	6		$	6		$	—
Deferred income taxes
Federal		107			4			49
State and local		38			65			49
		$	145		$	69		$	98
Deferred income tax credit		(4)			18			(3)
Tax expense		$	147		$	93		$	95
Consumers
Current income taxes
Federal		$	3		$	(2)		$	(13)
State and local		2			8			15
		$	5		$	6		$	2
Deferred income taxes
Federal		117			50			103
State and local		43			66			54
		$	160		$	116		$	157
Deferred income tax credit		(4)			18			(3)
Tax expense		$	161		$	140		$	156

Summary of Principal Components of Deferred Income Tax Assets and Liabilities

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2023			2022
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	428		$	385
Net regulatory tax liability		305			318
Reserves and accruals		28			35
Total deferred income tax assets		$	761		$	738
Valuation allowance		(2)			(2)
Total deferred income tax assets, net of valuation allowance		$	759		$	736
Deferred income tax liabilities
Plant, property, and equipment		$	(2,520)		$	(2,515)
Employee benefits		(473)			(433)
Gas inventory		(66)			(53)
Securitized costs		(194)			(39)
Other		(121)			(103)
Total deferred income tax liabilities		$	(3,374)		$	(3,143)
Total net deferred income tax liabilities		$	(2,615)		$	(2,407)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	305		$	318
Tax loss and credit carryforwards		175			145
Reserves and accruals		27			28
Total deferred income tax assets		$	507		$	491
Deferred income tax liabilities
Plant, property, and equipment		$	(2,498)		$	(2,458)
Employee benefits		(459)			(423)
Gas inventory		(66)			(53)
Securitized costs		(194)			(39)
Other		(79)			(103)
Total deferred income tax liabilities		$	(3,296)		$	(3,076)
Total net deferred income tax liabilities		$	(2,789)		$	(2,585)

Summary of Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2023:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
State net operating loss carryforwards		$	69	2030 – 2033
Local net operating loss carryforwards		3		2024 – 2040
General business credits		356		2035 – 2043
Total tax attributes		$	428
Consumers
State net operating loss carryforwards		$	53	2030 – 2033
General business credits		122		2035 – 2043
Total tax attributes		$	175

Schedule of Reconciliation of 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	2023			2022			2021
CMS Energy, including Consumers
Balance at beginning of period		$	28		$	27		$	25
Additions for current-year tax positions		1			1			2
Additions for prior-year tax positions		—			1			—
Reductions for prior-year tax positions		(3)			(1)			—
Balance at end of period		$	26		$	28		$	27
Consumers
Balance at beginning of period		$	36		$	34		$	31
Additions for current-year tax positions		1			3			3
Additions for prior-year tax positions		2			1			—
Reductions for prior-year tax positions		(3)			(2)			—
Balance at end of period		$	36		$	36		$	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	2023				2022				2021
CMS Energy, including Consumers
Income from continuing operations before income taxes		$	954			$	902			$	823
Income tax expense at statutory rate		200				189				173
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		31				51				39
Renewable energy tax credits		(58)				(51)				(44)
TCJA excess deferred taxes2		(40)				(65)				(50)
Taxes attributable to noncontrolling interests		17				5				5
Accelerated flow-through of regulatory tax benefits3		—				(39)				(28)
Other, net		(3)				3				—
Income tax expense		$	147			$	93			$	95
Effective tax rate		15.4		%		10.3		%		11.5		%
Consumers
Income from continuing operations before income taxes		$	1,028			$	1,085			$	1,024
Income tax expense at statutory rate		216				228				215
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect1		36				59				54
Renewable energy tax credits		(46)				(46)				(37)
TCJA excess deferred taxes2		(40)				(65)				(50)
Accelerated flow-through of regulatory tax benefits3		—				(39)				(28)
Other, net		(5)				3				2
Income tax expense		$	161			$	140			$	156
Effective tax rate		15.7		%		12.9		%		15.2		%

1CMS Energy initiated a plan to divest immaterial business activities in a non‑Michigan jurisdiction and will no longer have a taxable presence within that jurisdiction after 2023. As a result of these actions, CMS Energy reversed a $13 million non‑Michigan reserve, all of which was recognized at Consumers.

2In 2020, the MPSC authorized Consumers to accelerate the amortization of the gas portion of its regulatory liability associated with unprotected, non-property-related excess deferred income taxes resulting from the TCJA. This portion of the regulatory liability was fully amortized in 2022.

3In 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 were fully amortized in 2022.

Summary of 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	2023			2022			2021
CMS Energy, including Consumers
Current income taxes
Federal		$	5		$	6		$	(1)
State and local		1			—			1
		$	6		$	6		$	—
Deferred income taxes
Federal		107			4			49
State and local		38			65			49
		$	145		$	69		$	98
Deferred income tax credit		(4)			18			(3)
Tax expense		$	147		$	93		$	95
Consumers
Current income taxes
Federal		$	3		$	(2)		$	(13)
State and local		2			8			15
		$	5		$	6		$	2
Deferred income taxes
Federal		117			50			103
State and local		43			66			54
		$	160		$	116		$	157
Deferred income tax credit		(4)			18			(3)
Tax expense		$	161		$	140		$	156

Summary of Principal Components of Deferred Income Tax Assets and Liabilities

Presented in the following table are the principal components of deferred income tax assets (liabilities) recognized:

In Millions
December 31	2023			2022
CMS Energy, including Consumers
Deferred income tax assets
Tax loss and credit carryforwards		$	428		$	385
Net regulatory tax liability		305			318
Reserves and accruals		28			35
Total deferred income tax assets		$	761		$	738
Valuation allowance		(2)			(2)
Total deferred income tax assets, net of valuation allowance		$	759		$	736
Deferred income tax liabilities
Plant, property, and equipment		$	(2,520)		$	(2,515)
Employee benefits		(473)			(433)
Gas inventory		(66)			(53)
Securitized costs		(194)			(39)
Other		(121)			(103)
Total deferred income tax liabilities		$	(3,374)		$	(3,143)
Total net deferred income tax liabilities		$	(2,615)		$	(2,407)
Consumers
Deferred income tax assets
Net regulatory tax liability		$	305		$	318
Tax loss and credit carryforwards		175			145
Reserves and accruals		27			28
Total deferred income tax assets		$	507		$	491
Deferred income tax liabilities
Plant, property, and equipment		$	(2,498)		$	(2,458)
Employee benefits		(459)			(423)
Gas inventory		(66)			(53)
Securitized costs		(194)			(39)
Other		(79)			(103)
Total deferred income tax liabilities		$	(3,296)		$	(3,076)
Total net deferred income tax liabilities		$	(2,789)		$	(2,585)

Summary of Loss And Credit Carryforwards

Presented in the following table are the tax loss and credit carryforwards at December 31, 2023:

In Millions
	Tax Attribute			Expiration
CMS Energy, including Consumers
State net operating loss carryforwards		$	69	2030 – 2033
Local net operating loss carryforwards		3		2024 – 2040
General business credits		356		2035 – 2043
Total tax attributes		$	428
Consumers
State net operating loss carryforwards		$	53	2030 – 2033
General business credits		122		2035 – 2043
Total tax attributes		$	175

Schedule of Reconciliation of 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	2023			2022			2021
CMS Energy, including Consumers
Balance at beginning of period		$	28		$	27		$	25
Additions for current-year tax positions		1			1			2
Additions for prior-year tax positions		—			1			—
Reductions for prior-year tax positions		(3)			(1)			—
Balance at end of period		$	26		$	28		$	27
Consumers
Balance at beginning of period		$	36		$	34		$	31
Additions for current-year tax positions		1			3			3
Additions for prior-year tax positions		2			1			—
Reductions for prior-year tax positions		(3)			(2)			—
Balance at end of period		$	36		$	36		$	34