Related Party Transactions - Consumers

12 Months Ended

Dec. 31, 2015

Consumers Energy Company [Member]

Related Party Transactions - Consumers

18:Related-Party  Transactions—Consumers

Consumers enters into a number of transactions with related parties. These transactions include:

· purchases of electricity from affiliates of CMS Enterprises

· payments to and from CMS Energy related to parent company overhead costs

· investment in CMS Energy common stock

Transactions involving power supply purchases from certain affiliates of CMS Enterprises are based on avoided costs under the Public Utility Regulatory Policies Act of 1978, state law, and competitive bidding. The payment of parent company overhead costs is based on the use of accepted industry allocation methodologies. These payments are for costs that occur in the normal course of business.

Presented in the following table is Consumers’ expense recorded from related party transactions for the years ended December 31:

In Millions
Description	Related Party	2015			2014			2013
Purchases of capacity and energy	Affiliates of CMS Enterprises		$	83		$	89		$	89

Amounts payable to related parties for purchased power and other services were $23 million at December 31, 2015 and $12 million at December 31, 2014.  

Accounts receivable from related parties were $17 million at December 31, 2015, primarily representing Consumers’ payment of postretirement benefits contributions on behalf of CMS Energy. Accounts receivable from related parties were $1 million at December 31, 2014.

Consumers owned shares of CMS Energy common stock with a fair value of $29 million at December 31, 2015. For additional details on Consumers’ investment in CMS Energy common stock, see Note 7, Financial Instruments.

In January 2016, Consumers renewed a short-term credit agreement with CMS Energy, permitting Consumers to borrow up to $300 million. At December 31, 2015, there were no outstanding loans under the agreement.