Leases (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Rent Expense

In Millions
Years Ended December 31	2014			2013			2012
Consumers
Minimum operating lease expense
PPAs		$	6		$	6		$	6
Other agreements			19			21			23
Contingent rental expense1			85			77			33

¹ Contingent rental expense is related to capital and operating lease PPAs and is based on delivery of energy and capacity in excess of minimum lease payments.

Schedule of Future Minimum Lease Payments for Leases

In Millions
	Capital Leases			Financing1			Operating Leases
Consumers
2015		$	15		$	18		$	25
2016			12			17			19
2017			11			17			19
2018			10			16			16
2019			11			15			10
2020 and thereafter			25			31			40
Total minimum lease payments		$	84		$	114		$	129
Less imputed interest			35			19
Present value of net minimum lease payments		$	49		$	95
Less current portion			8			13
Non-current portion		$	41		$	82

¹ In 2007, Consumers sold Palisades to Entergy and entered into a 15-year PPA to buy all of the capacity and energy then capable of being produced by Palisades.  Consumers has continuing involvement with Palisades through security provided to Entergy for Consumers’ PPA obligation and other arrangements.  Because of these ongoing arrangements, Consumers accounted for the transaction as a financing of Palisades and not a sale.  Accordingly, no gain on the sale of Palisades was recognized on the consolidated statements of income.  Consumers accounted for the remaining non-real-estate assets and liabilities associated with the transaction as a sale.

Palisades remains on Consumers’ consolidated balance sheets and Consumers continues to depreciate it.  Consumers recorded the related proceeds as a finance obligation with payments recorded to interest expense and the finance obligation based on the amortization of the obligation over the life of the Palisades PPA.  The value of the finance obligation was determined based on an allocation of the transaction proceeds to the fair values of the net assets sold and fair value of the plant asset under the financing.  Total amortization and interest charges under the financing were $19 million for the year ended December 31, 2014 and $20 million for each of the years ended December 31, 2013 and December 31, 2012.

Consumers Energy Company [Member]

Schedule of Rent Expense

In Millions
Years Ended December 31	2014			2013			2012
Consumers
Minimum operating lease expense
PPAs		$	6		$	6		$	6
Other agreements			19			21			23
Contingent rental expense1			85			77			33

¹ Contingent rental expense is related to capital and operating lease PPAs and is based on delivery of energy and capacity in excess of minimum lease payments.

Schedule of Future Minimum Lease Payments for Leases

In Millions
	Capital Leases			Financing1			Operating Leases
Consumers
2015		$	15		$	18		$	25
2016			12			17			19
2017			11			17			19
2018			10			16			16
2019			11			15			10
2020 and thereafter			25			31			40
Total minimum lease payments		$	84		$	114		$	129
Less imputed interest			35			19
Present value of net minimum lease payments		$	49		$	95
Less current portion			8			13
Non-current portion		$	41		$	82

¹ In 2007, Consumers sold Palisades to Entergy and entered into a 15-year PPA to buy all of the capacity and energy then capable of being produced by Palisades.  Consumers has continuing involvement with Palisades through security provided to Entergy for Consumers’ PPA obligation and other arrangements.  Because of these ongoing arrangements, Consumers accounted for the transaction as a financing of Palisades and not a sale.  Accordingly, no gain on the sale of Palisades was recognized on the consolidated statements of income.  Consumers accounted for the remaining non-real-estate assets and liabilities associated with the transaction as a sale.

Palisades remains on Consumers’ consolidated balance sheets and Consumers continues to depreciate it.  Consumers recorded the related proceeds as a finance obligation with payments recorded to interest expense and the finance obligation based on the amortization of the obligation over the life of the Palisades PPA.  The value of the finance obligation was determined based on an allocation of the transaction proceeds to the fair values of the net assets sold and fair value of the plant asset under the financing.  Total amortization and interest charges under the financing were $19 million for the year ended December 31, 2014 and $20 million for each of the years ended December 31, 2013 and December 31, 2012.