Income Taxes

9 Months Ended

Sep. 30, 2015

Income Taxes

10:INCOME TAXES

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations, excluding noncontrolling interests:

Nine Months Ended September 30	2015			2014
CMS Energy, including Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.8			4.9
Accelerated flow-through of regulatory tax benefits		(4.9)			(5.3)
Other, net		(1.3)			(0.7)
Effective tax rate		33.6	%		33.9	%
Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.8			4.9
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.3)
Other, net		(1.5)			(0.7)
Effective tax rate		34.1	%		34.9	%

Prior to 2014, Consumers recognized the income tax benefits associated with the removal costs of plant placed in service before 1993 as payments were made and the tax benefits were flowed through to customers.  In 2013, the MPSC issued an order authorizing Consumers to flow through to customers the income tax benefits on a straight-line basis over an accelerated period.  This regulatory treatment, which Consumers implemented in January 2014, will accelerate the return of $209 million of income tax benefits over five years to electric customers and $260 million of income tax benefits over 12 years to gas customers.  This treatment reduced Consumers’ income tax expense by $29million for the nine months ended September 30, 2015and by $30 million for thenine months ended September 30, 2014.

Consumers Energy Company [Member]

Income Taxes

10:INCOME TAXES

Presented in the following table is a reconciliation of the statutory U.S. federal income tax rate to the effective income tax rate from continuing operations, excluding noncontrolling interests:

Nine Months Ended September 30	2015			2014
CMS Energy, including Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.8			4.9
Accelerated flow-through of regulatory tax benefits		(4.9)			(5.3)
Other, net		(1.3)			(0.7)
Effective tax rate		33.6	%		33.9	%
Consumers
U.S. federal income tax rate		35.0	%		35.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.8			4.9
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.3)
Other, net		(1.5)			(0.7)
Effective tax rate		34.1	%		34.9	%

Prior to 2014, Consumers recognized the income tax benefits associated with the removal costs of plant placed in service before 1993 as payments were made and the tax benefits were flowed through to customers.  In 2013, the MPSC issued an order authorizing Consumers to flow through to customers the income tax benefits on a straight-line basis over an accelerated period.  This regulatory treatment, which Consumers implemented in January 2014, will accelerate the return of $209 million of income tax benefits over five years to electric customers and $260 million of income tax benefits over 12 years to gas customers.  This treatment reduced Consumers’ income tax expense by $29million for the nine months ended September 30, 2015and by $30 million for thenine months ended September 30, 2014.