Leases (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Rent Expense

In Millions
Years Ended December 31	2015			2014			2013
Consumers
Minimum operating lease expense
PPAs		$	6		$	6		$	6
Other agreements			19			19			21
Contingent rental expense1			82			85			77

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
2016		$	14		$	17		$	20
2017			14			17			19
2018			13			16			16
2019			13			15			10
2020			11			14			10
2021 and thereafter			36			17			29
Total minimum lease payments		$	101		$	96		$	104
Less imputed interest			43			14
Present value of net minimum lease payments		$	58		$	82
Less current portion			9			13
Non-current portion		$	49		$	69

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 financing obligation with payments recorded to interest expense and the financing obligation based on the amortization of the obligation over the life of the Palisades PPA. The value of the financing 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 $18 million for the year ended December 31, 2015,  $19 million for the year ended December 31, 2014, and $20 million for the year ended December 31, 2013.

Consumers Energy Company [Member]

Schedule of Rent Expense

In Millions
Years Ended December 31	2015			2014			2013
Consumers
Minimum operating lease expense
PPAs		$	6		$	6		$	6
Other agreements			19			19			21
Contingent rental expense1			82			85			77

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
2016		$	14		$	17		$	20
2017			14			17			19
2018			13			16			16
2019			13			15			10
2020			11			14			10
2021 and thereafter			36			17			29
Total minimum lease payments		$	101		$	96		$	104
Less imputed interest			43			14
Present value of net minimum lease payments		$	58		$	82
Less current portion			9			13
Non-current portion		$	49		$	69

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 financing obligation with payments recorded to interest expense and the financing obligation based on the amortization of the obligation over the life of the Palisades PPA. The value of the financing 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 $18 million for the year ended December 31, 2015,  $19 million for the year ended December 31, 2014, and $20 million for the year ended December 31, 2013.