10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2016
	OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934

For the transition period from_____to_____

Commission	Registrant; State of Incorporation;	IRS Employer
File Number	Address; and Telephone Number	Identification No.
1-9513	CMS ENERGY CORPORATION	38-2726431
	(A Michigan Corporation)
	One Energy Plaza, Jackson, Michigan 49201
	(517) 788-0550
1-5611	CONSUMERS ENERGY COMPANY	38-0442310
	(A Michigan Corporation)
	One Energy Plaza, Jackson, Michigan 49201
	(517) 788-0550

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

CMS Energy Corporation: Yes x  No o     Consumers Energy Company: Yes x  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

CMS Energy Corporation: Yes x  No o     Consumers Energy Company: Yes x  No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

CMS Energy Corporation:
Large accelerated filer x	Accelerated filer o
Non-Accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company o
Consumers Energy Company:
Large accelerated filer o	Accelerated filer o
Non-Accelerated filer x (Do not check if a smaller reporting company)	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

CMS Energy Corporation: Yes o  No x    Consumers Energy Company: Yes o  No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock at April 11, 2016:

CMS Energy Corporation:

CMS Energy Common Stock, $0.01 par value
(including 803,551 shares owned by Consumers Energy Company)	279,961,710
Consumers Energy Company:
Consumers Common Stock, $10 par value, privately held by CMS Energy Corporation	84,108,789

CMS Energy Corporation

Consumers Energy Company

Quarterly Reports on Form 10-Q to the Securities and Exchange Commission for the Period Ended March 31, 2016

TABLE OF CONTENTS

Glossary	2
Filing Format	7
Available Information	7
Forward-Looking Statements and Information	7
Part I—Financial Information	11
Item 1. Financial Statements	11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	64
Item 3. Quantitative and Qualitative Disclosures About Market Risk	64
Item 4. Controls and Procedures	64
Part II—Other Information	65
Item 1. Legal Proceedings	65
Item 1A. Risk Factors	65
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3. Defaults Upon Senior Securities	66
Item 4. Mine Safety Disclosures	66
Item 5. Other Information	66
Item 6. Exhibits	66
Signatures	67

1

GLOSSARY

Certain terms used in the text and financial statements are defined below.

2008 Energy Law
Comprehensive energy reform package enacted in Michigan in 2008

2015 Form 10-K
Each of CMS Energy’s and Consumers’ Annual Report on Form 10-K for the year ended December 31, 2015

ABATE
Association of Businesses Advocating Tariff Equity

AOCI
Accumulated other comprehensive income (loss)

ASU
Financial Accounting Standards Board Accounting Standards Update

Bay Harbor
A residential/commercial real estate area located near Petoskey, Michigan, in which CMS Energy sold its interest in 2002

bcf
Billion cubic feet

Cantera Gas Company
Cantera Gas Company LLC, a non-affiliated company, formerly known as CMS Field Services

Cantera Natural Gas, Inc.
Cantera Natural Gas, Inc., a non-affiliated company that purchased CMS Field Services

CCR
Coal combustion residual

CEO
Chief Executive Officer

CERCLA
Comprehensive Environmental Response, Compensation, and Liability Act of 1980

CFO
Chief Financial Officer

Clean Air Act
Federal Clean Air Act of 1963, as amended

Clean Water Act
Federal Water Pollution Control Act of 1972, as amended

CMS Capital
CMS Capital, L.L.C., a wholly owned subsidiary of CMS Energy

2

CMS Energy
CMS Energy Corporation and its consolidated subsidiaries, unless otherwise noted; the parent of Consumers and CMS Enterprises

CMS Enterprises
CMS Enterprises Company, a wholly owned subsidiary of CMS Energy

CMS Field Services
CMS Field Services, Inc., a former wholly owned subsidiary of CMS Gas Transmission Company, a wholly owned subsidiary of CMS Enterprises

CMS Land
CMS Land Company, a wholly owned subsidiary of CMS Capital

CMS MST
CMS Marketing, Services and Trading Company, a wholly owned subsidiary of CMS Enterprises, whose name was changed to CMS Energy Resource Management Company in 2004

Consumers
Consumers Energy Company and its consolidated subsidiaries, unless otherwise noted; a wholly owned subsidiary of CMS Energy

CSAPR
The Cross-State Air Pollution Rule

DB Pension Plan
Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries

DB SERP
Defined Benefit Supplemental Executive Retirement Plan

Dodd-Frank Act
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

DOE
U.S. Department of Energy

DTIA
Distribution-Transmission Interconnection Agreement dated April 1, 2001 between METC and Consumers, as amended

EBITDA
Earnings before interest, taxes, depreciation, and amortization

EnerBank
EnerBank USA, a wholly owned subsidiary of CMS Capital

EPA
U.S. Environmental Protection Agency

EPS
Earnings per share

3

Exchange Act
Securities Exchange Act of 1934

FDIC
Federal Deposit Insurance Corporation

FERC
The Federal Energy Regulatory Commission

FTR
Financial transmission right

GAAP
U.S. Generally Accepted Accounting Principles

GCR
Gas cost recovery

GDP
Gross domestic product

Genesee
Genesee Power Station Limited Partnership, a variable interest entity in which HYDRA-CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50 percent interest

Health Care Acts
Comprehensive health care reform enacted in 2010, comprising the Patient Protection and Affordable Care Act and the related Health Care and Education Reconciliation Act

kWh
Kilowatt-hour, a unit of energy equal to one thousand watt-hours

Ludington
Ludington pumped-storage plant, jointly owned by Consumers and DTE Electric Company, a non-affiliated company

MATS
Mercury and Air Toxics Standards, which limit mercury, acid gases, and other toxic pollution from coal-fueled and oil-fueled power plants

MD&A
Management’s Discussion and Analysis of Financial Condition and Results of Operations

MDEQ
Michigan Department of Environmental Quality

METC
Michigan Electric Transmission Company, LLC, a non-affiliated company

MGP
Manufactured gas plant

4

Michigan Mercury Rule
Michigan Air Pollution Control Rules, Part 15, Emission Limitations and Prohibitions – Mercury, addressing mercury emissions from coal-fueled electric generating units

MISO
Midcontinent Independent System Operator, Inc.

mothball
To place a generating unit into a state of extended reserve shutdown in which the unit is inactive and unavailable for service for a specified period, during which the unit can be brought back into service after receiving appropriate notification and completing any necessary maintenance or other work; generation owners in MISO must request approval to mothball a unit, and MISO then evaluates the request for reliability impacts

MPSC
Michigan Public Service Commission

MW
Megawatt, a unit of power equal to one million watts

NAAQS
National Ambient Air Quality Standards

NAV
Net asset value

NERC
The North American Electric Reliability Corporation, a non-affiliated company responsible for developing and enforcing reliability standards, monitoring the bulk power system, and educating and certifying industry personnel

NPDES
National Pollutant Discharge Elimination System, a permit system for regulating point sources of pollution under the Clean Water Act

NREPA
Part 201 of the Michigan Natural Resources and Environmental Protection Act, a statute that covers environmental activities including remediation

NSR
New Source Review, a construction-permitting program under the Clean Air Act

OPEB
Other Post-Employment Benefits

OPEB Plan
Postretirement health care and life insurance plans of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries

PCB
Polychlorinated biphenyl

PSCR
Power supply cost recovery

5

REC
Renewable energy credit established under the 2008 Energy Law

ReliabilityFirst Corporation
ReliabilityFirst Corporation, a non-affiliated company responsible for the preservation and enhancement of bulk power system reliability and security

Resource Conservation and Recovery Act
Federal Resource Conservation and Recovery Act of 1976

RMRR
Routine maintenance, repair, and replacement

ROA
Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to a Michigan statute enacted in 2000

SEC
U.S. Securities and Exchange Commission

securitization
A financing method authorized by statute and approved by the MPSC which allows a utility to sell its right to receive a portion of the rate payments received from its customers for the repayment of securitization bonds issued by a special-purpose entity affiliated with such utility

Sherman Act
Sherman Antitrust Act of 1890

Smart Energy
Consumers’ Smart Energy grid modernization project, which includes the installation of smart meters that transmit and receive data, a two-way communications network, and modifications to Consumers’ existing information technology system to manage the data and enable changes to key business processes

6

FILING FORMAT

This combined Form 10-Q is separately filed by CMS Energy and Consumers. Information in this combined Form 10-Q relating to each individual registrant is filed by such registrant on its own behalf. Consumers makes no representation regarding information relating to any other companies affiliated with CMS Energy other than its own subsidiaries. None of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers) has any obligation in respect of Consumers’ debt securities and holders of such debt securities should not consider the financial resources or results of operations of CMS Energy, CMS Enterprises, nor any of CMS Energy’s other subsidiaries (other than Consumers and its own subsidiaries (in relevant circumstances)) in making a decision with respect to Consumers’ debt securities. Similarly, neither Consumers nor any other subsidiary of CMS Energy has any obligation in respect of debt securities of CMS Energy.

This report should be read in its entirety. No one section of this report deals with all aspects of the subject matter of this report. This report should be read in conjunction with the consolidated financial statements and related notes and with MD&A included in the 2015 Form 10-K.

AVAILABLE INFORMATION

CMS Energy’s internet address is www.cmsenergy.com. CMS Energy routinely posts important information on its website and considers the Investor Relations section, www.cmsenergy.com/investor-relations, a channel of distribution. Information contained on CMS Energy’s website is not incorporated herein.

FORWARD-LOOKING STATEMENTS AND INFORMATION

This Form 10-Q and other CMS Energy and Consumers disclosures may contain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. The use of “might,” “may,” “could,” “should,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “forecasts,” “predicts,” “assumes,” and other similar words is intended to identify forward-looking statements that involve risk and uncertainty. This discussion of potential risks and uncertainties is designed to highlight important factors that may impact CMS Energy’s and Consumers’ businesses and financial outlook. CMS Energy and Consumers have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements. These forward-looking statements are subject to various factors that could cause CMS Energy’s and Consumers’ actual results to differ materially from the results anticipated in these statements. These factors include, but are not limited to, the following, all of which are potentially significant:

·the impact of new regulation by the MPSC, FERC, and other applicable governmental proceedings and regulations, including any associated impact on electric or gas rates or rate structures

·potentially adverse regulatory treatment or failure to receive timely regulatory orders affecting Consumers that are or could come before the MPSC, FERC, or other governmental authorities

·changes in the performance of or regulations applicable to MISO, METC, pipelines, railroads, vessels, or other service providers that CMS Energy, Consumers, or any of their affiliates rely on to serve their customers

·the adoption of federal or state laws or regulations or changes in applicable laws, rules, regulations, principles, or practices, or in their interpretation, such as those related to energy

7

policy and ROA, gas pipeline safety, gas pipeline capacity, energy efficiency, the environment, regulation or deregulation, reliability, health care reforms (including the Health Care Acts), taxes, accounting matters, climate change, air emissions, renewable energy, potential effects of the Dodd-Frank Act, and other business issues that could have an impact on CMS Energy’s, Consumers’, or any of their affiliates’ businesses or financial results

·factors affecting operations, such as costs and availability of personnel, equipment, and materials; weather conditions; natural disasters; catastrophic weather-related damage; scheduled or unscheduled equipment outages; maintenance or repairs; environmental incidents; equipment failures; and electric transmission and distribution or gas pipeline system constraints

·increases in demand for renewables by customers seeking to meet sustainability goals

·the ability of Consumers to execute its cost-reduction strategies

·potentially adverse regulatory or legal interpretations or decisions regarding environmental matters, or delayed regulatory treatment or permitting decisions that are or could come before the MDEQ, EPA, and/or U.S. Army Corps of Engineers, and potential environmental remediation costs associated with these interpretations or decisions, including those that may affect Bay Harbor or Consumers’ RMRR classification under NSR regulations

·changes in energy markets, including availability and price of electric capacity and the timing and extent of changes in commodity prices and availability and deliverability of coal, natural gas, natural gas liquids, electricity, oil, and certain related products

·the price of CMS Energy common stock, the credit ratings of CMS Energy and Consumers, capital and financial market conditions, and the effect of these market conditions on CMS Energy’s and Consumers’ interest costs and access to the capital markets, including availability of financing to CMS Energy, Consumers, or any of their affiliates

·the investment performance of the assets of CMS Energy’s and Consumers’ pension and benefit plans, the discount rates used in calculating the plans’ obligations, and the resulting impact on future funding requirements

·the impact of the economy, particularly in Michigan, and potential future volatility in the financial and credit markets on CMS Energy’s, Consumers’, or any of their affiliates’ revenues, ability to collect accounts receivable from customers, or cost and availability of capital

·changes in the economic and financial viability of CMS Energy’s and Consumers’ suppliers, customers, and other counterparties and the continued ability of these third parties, including those in bankruptcy, to meet their obligations to CMS Energy and Consumers

·population changes in the geographic areas where CMS Energy and Consumers conduct business

·national, regional, and local economic, competitive, and regulatory policies, conditions, and developments

·loss of customer demand for electric generation supply to alternative energy suppliers, increased use of distributed generation, or energy efficiency

·federal regulation of electric sales and transmission of electricity, including periodic re-examination by federal regulators of CMS Energy’s and Consumers’ market-based sales authorizations

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·the impact of credit markets, economic conditions, and any new banking regulations on EnerBank

·the availability, cost, coverage, and terms of insurance, the stability of insurance providers, and the ability of Consumers to recover the costs of any insurance from customers

·the effectiveness of CMS Energy’s and Consumers’ risk management policies, procedures, and strategies, including strategies to hedge risk related to future prices of electricity, natural gas, and other energy-related commodities

·factors affecting development of electric generation projects and gas and electric transmission and distribution infrastructure replacement, conversion, and expansion projects, including factors related to project site identification, construction material pricing, schedule delays, availability of qualified construction personnel, permitting, and government approvals

·potential disruption to, interruption of, or other impacts on facilities, utility infrastructure, or operations due to accidents, explosions, physical disasters, cyber incidents, vandalism, war, or terrorism, and the ability to obtain or maintain insurance coverage for these events

·changes or disruption in fuel supply, including but not limited to supplier bankruptcy and delivery disruptions

·potential costs, lost revenues, or other consequences resulting from misappropriation of assets or sensitive information, corruption of data, or operational disruption in connection with a cyber attack or other cyber incident

·technological developments in energy production, storage, delivery, usage, and metering

·the ability to implement technology, including Smart Energy, successfully

·the impact of CMS Energy’s and Consumers’ integrated business software system and its effects on their operations, including utility customer billing and collections

·adverse consequences resulting from any past, present, or future assertion of indemnity or warranty claims associated with assets and businesses previously owned by CMS Energy or Consumers, including claims resulting from attempts by foreign or domestic governments to assess taxes on or to impose environmental liability associated with past operations or transactions

·the outcome, cost, and other effects of any legal or administrative claims, proceedings, investigations, or settlements

·the reputational impact on CMS Energy and Consumers of operational incidents, violations of corporate policies, regulatory violations, inappropriate use of social media, and other events

·restrictions imposed by various financing arrangements and regulatory requirements on the ability of Consumers and other subsidiaries of CMS Energy to transfer funds to CMS Energy in the form of cash dividends, loans, or advances

·earnings volatility resulting from the application of fair value accounting to certain energy commodity contracts or interest rate contracts

·changes in financial or regulatory accounting principles or policies

9

·other matters that may be disclosed from time to time in CMS Energy’s and Consumers’ SEC filings, or in other public documents

All forward-looking statements should be considered in the context of the risk and other factors described above and as detailed from time to time in CMS Energy’s and Consumers’ SEC filings. For additional details regarding these and other uncertainties, see Part I—Item 1. Financial Statements—MD&A—Outlook and Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments; and Part II—Item 1A. Risk Factors.

10

Part I—Financial Information

Item 1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
CMS Energy Consolidated Financial Statements		32
Consolidated Statements of Income (Unaudited)		32
Consolidated Statements of Comprehensive Income (Unaudited)		33
Consolidated Statements of Cash Flows (Unaudited)		35
Consolidated Balance Sheets (Unaudited)		36
Consolidated Statements of Changes in Equity (Unaudited)		38
Consumers Consolidated Financial Statements		40
Consolidated Statements of Income (Unaudited)		40
Consolidated Statements of Comprehensive Income (Unaudited)		41
Consolidated Statements of Cash Flows (Unaudited)		43
Consolidated Balance Sheets (Unaudited)		44
Consolidated Statements of Changes in Equity (Unaudited)		46
Notes to the Unaudited Consolidated Financial Statements		47
1:	New Accounting Standards	47
2:	Regulatory Matters	49
3:	Contingencies and Commitments	49
4:	Financings and Capitalization	54
5:	Fair Value Measurements	55
6:	Financial Instruments	57
7:	Notes Receivable	58
8:	Retirement Benefits	59
9:	Income Taxes	60
10:	Earnings Per Share—CMS Energy	61
11:	Reportable Segments	61

11

CMS Energy Corporation

Consumers Energy Company

Management’s Discussion and Analysis of Financial Condition and Results of Operations

This MD&A is a combined report of CMS Energy and Consumers.

EXECUTIVE OVERVIEW

CMS Energy is an energy company operating primarily in Michigan. It is the parent holding company of several subsidiaries, including Consumers, an electric and gas utility, and CMS Enterprises, primarily a domestic independent power producer. Consumers’ electric utility operations include the generation, purchase, transmission, distribution, and sale of electricity, and Consumers’ gas utility operations include the purchase, transmission, storage, distribution, and sale of natural gas. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. CMS Enterprises, through its subsidiaries and equity investments, owns and operates power generation facilities.

CMS Energy and Consumers manage their businesses by the nature of services each provides. CMS Energy operates principally in three business segments: electric utility; gas utility; and enterprises, its non-utility operations and investments. Consumers operates principally in two business segments: electric utility and gas utility.

CMS Energy and Consumers earn revenue and generate cash from operations by providing electric and natural gas utility services; electric distribution, transmission, and generation; gas transmission, storage, and distribution; and other energy-related services. Their businesses are affected primarily by:

·regulation and regulatory matters

·economic conditions

·weather

·energy commodity prices

·interest rates

·CMS Energy’s and Consumers’ securities’ credit ratings

CMS Energy’s and Consumers’ business strategy emphasizes the key elements depicted below:

12

Accountability is part of CMS Energy’s and Consumers’ corporate culture. CMS Energy and Consumers are committed to making the right choices to serve their customers safely and affordably and to acting responsibly as corporate citizens. CMS Energy and Consumers hold themselves accountable to the highest standards of safety, operational performance, and ethical behavior, and work diligently to comply with all laws, rules, and regulations that govern the electric and gas industry. Consumers’ 2015 Accountability Report, which is available to the public, provides an overview of Consumers’ efforts to continue meeting Michigan’s energy needs safely and efficiently, and highlights Consumers’ commitment to Michigan businesses, its corporate citizenship, and its role in reducing the state’s air emissions.

Safe, Excellent Operations

The safety of employees, customers, and the general public remains a priority of CMS Energy and Consumers. Accordingly, CMS Energy and Consumers have worked to integrate a set of safety principles into their business operations and culture. These principles include complying with applicable safety, health, and security regulations and implementing programs and processes aimed at continually improving safety and security conditions. In 2015, Consumers reduced recordable safety incidents by 29 percent compared with 2014. The number of recordable safety incidents in 2015 was the lowest in Consumers’ history.

Customer Value

Consumers is undertaking a number of initiatives that reflect its intensified customer focus. Consumers’ planned investments in reliability are aimed at improving safety, reducing customer outage frequency, reducing repetitive outages, and increasing customer satisfaction. In 2015, Consumers attained reductions in the duration of electric customer outages and in the frequency of forced outages of its electric generation facilities. Consumers’ intensified customer focus has led to measureable improvements in customer satisfaction.

Also, in order to minimize increases in customer base rates, Consumers has undertaken several additional initiatives to reduce costs. These include accelerated pension funding, employee and retiree health care cost sharing, replacement of coal-fueled generation with more efficient gas-fueled generation, targeted infrastructure investment, including the installation of smart meters, negotiated labor agreements, information and control system efficiencies, and productivity improvements. In addition, Consumers’ gas commodity costs have declined by 64 percent over the last ten years, due in part to Consumers’ improvements to its gas infrastructure and optimization of its gas purchasing and storage strategy. These savings are all passed on to customers.

Utility Investment

Consumers expects to make capital investments of about $17 billion from 2016 through 2025. While Consumers has substantially more investment opportunities that would add customer value, Consumers has limited its capital investment program to those investments it believes are needed to provide safe, reliable, and efficient service to its customers. Consumers’ capital investment program is expected to result in annual rate-base growth of five to seven percent while allowing Consumers to maintain sustainable customer base rate increases (excluding PSCR and GCR charges) at or below the rate of inflation.

13

Over the next five years, Consumers expects to make capital investments of about $8.4 billion. Presented in the following illustration are Consumers’ planned capital investments through 2020:

		Electric base ($2.5 billion)
		Gas base ($1.6 billion)
		Gas reliability enhancements ($1.6 billion)
		Electric reliability enhancements ($1.1 billion)
		Environmental ($0.7 billion)
		Smart Energy ($0.3 billion)
		Other ($0.6 billion)

Consumers’ planned base capital investments of $4.1 billion represent projects to maintain Consumers’ system and comprise $2.5 billion at the electric utility to preserve reliability and capacity and $1.6 billion at the gas utility to sustain deliverability and enhance pipeline integrity. An additional $2.7 billion of planned reliability investments at Consumers are aimed at reducing outages and improving customer satisfaction; these investments comprise $1.6 billion at the gas utility to replace mains and enhance transmission and storage systems and $1.1 billion at the electric utility to strengthen circuits and substations and replace poles. Consumers also expects to spend $0.7 billion on environmental investments needed to comply with state and federal laws and regulations.

Consumers’ Smart Energy program also represents a major capital investment. The full-scale deployment of advanced metering infrastructure began in 2012 and is planned to continue through 2017. Consumers has spent $0.5 billion through 2015 on its Smart Energy program, and expects to spend an additional $0.3 billion, following a phased approach, through 2017.

Regulation

Regulatory matters are a key aspect of CMS Energy’s and Consumers’ businesses, particularly Consumers’ rate cases and regulatory proceedings before the MPSC. In March 2016, MPSC Commissioner John Quackenbush resigned, and a new commissioner has not yet been appointed. The MPSC still has the authority to issue orders with only two members instead of the normal three members. Other important regulatory events and developments are summarized below.

·Electric Rate Case: In March 2016, Consumers filed an application with the MPSC seeking an annual rate increase of $225 million, based on a 10.7 percent authorized return on equity. The filing also seeks approval of an investment recovery mechanism that would allow recovery of an additional $222 million in total for incremental investments that Consumers plans to make from 2017 through 2019, subject to reconciliation.

14

·Gas Rate Case: In July 2015, Consumers filed an application with the MPSC seeking an annual rate increase of $85 million, based on a 10.7 percent authorized return on equity. In January 2016, Consumers self-implemented an annual rate increase of $60 million, subject to refund with interest. In April 2016, the MPSC approved a settlement agreement authorizing a $40 million annual rate increase.

In 2015, Michigan’s governor outlined several key goals for the state’s energy policy, with a focus on increasing the use of clean energy sources, reducing Michigan’s reliance on coal, deploying smart meters, investing in the power grid and pipeline system, eliminating energy waste, and ensuring affordable, reliable, and adaptable energy while protecting the environment. Presently, the Michigan Senate and House of Representatives are considering two separate but similar pieces of legislation to address energy policy. Consumers is unable to predict the form and timing of any final legislation.

Environmental regulation is another area of importance for CMS Energy and Consumers, and they are monitoring numerous legislative and regulatory initiatives, including initiatives to regulate greenhouse gases, and related litigation. CMS Energy and Consumers believe that environmental laws and regulations related to their operations will continue to become more stringent and require them to make additional substantial capital expenditures for emissions control equipment, CCR disposal and storage, cooling water intake equipment, effluent treatment, and PCB remediation. Present and reasonably anticipated state and federal environmental statutes and regulations, including but not limited to the Clean Air Act, including the Clean Power Plan, as well as the Clean Water Act, the Resource Conservation and Recovery Act, and CERCLA, will continue to have a material effect on CMS Energy and Consumers.

Financial Performance

For the three months ended March 31, 2016, CMS Energy’s net income available to common stockholders was $164 million and diluted EPS were $0.59. This compares with net income available to common stockholders of $202 million and diluted EPS of $0.73 for the three months ended March 31, 2015. Among the primary factors contributing to CMS Energy’s decreased earnings in 2016 were lower electric and gas deliveries, reflecting the second-warmest winter in Consumers’ history, offset partially by benefits from electric and gas rate increases.

Consumers’ utility operations are seasonal. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel. In addition, Consumers’ electric rates, which follow a seasonal rate design, are higher in the summer months than in the remaining months of the year. A more detailed discussion of the factors affecting CMS Energy’s and Consumers’ performance can be found in the Results of Operations section that follows this Executive Overview.

In recent years, Michigan has benefited from strong economic growth; it ranked third among states in GDP growth from 2009 through 2014. Consumers expects that the continued rise in industrial production will drive its electric deliveries to increase annually by about 0.5 to 1.0 percent on average through 2020. Excluding the impacts of energy efficiency programs, Consumers expects its electric deliveries to increase by about 1.0 to 1.5 percent annually through 2020. Consumers is projecting that its gas deliveries will remain stable through 2020. This outlook reflects growth in gas demand offset by energy efficiency and conservation.

As Consumers seeks to continue to receive fair and timely regulatory treatment, delivering customer value will remain a key strategic priority. In order to minimize increases in customer base rates, Consumers has set goals to achieve further annual productivity improvements. Additionally, Consumers will strive to give priority to capital investments that increase customer value or lower costs.

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Consumers expects to continue to have sufficient borrowing capacity to fund its investment-based growth plans. CMS Energy also expects its sources of liquidity to remain sufficient to meet its cash requirements. To identify potential implications for CMS Energy’s and Consumers’ businesses and future financial needs, the companies will continue to monitor developments in the financial and credit markets, as well as government policy responses to those developments.

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RESULTS OF OPERATIONS

CMS Energy Consolidated Results of Operations

	In Millions, Except Per Share Amounts
Three Months Ended March 31		2016		2015		Change
Net Income Available to Common Stockholders		$	164	$	202	$	(38	)
Basic Earnings Per Share		$	0.59	$	0.73	$	(0.14	)
Diluted Earnings Per Share		$	0.59	$	0.73	$	(0.14	)

	In Millions
Three Months Ended March 31		2016			2015			Change
Electric utility		$	91		$	94		$	(3	)
Gas utility		81			121			(40		)
Enterprises		6			7			(1		)
Corporate interest and other		(14		)	(20		)	6
Net Income Available to Common Stockholders		$	164		$	202		$	(38	)

Presented in the following table are specific after-tax changes to net income available to common stockholders:

						In Millions
	March 31, 2016 better/(worse) than 2015
Reasons for the change	Three Months Ended
Consumers electric utility and gas utility
Electric sales
Weather		$	(18)
Non-weather		-		$	(18)
Gas sales
Weather		(56)
Non-weather		13		(43)
Electric rate increase				29
Gas rate increase				8
Employee benefit costs				6
Depreciation and property taxes				(14)
Operating and maintenance costs				(7)
Other				(4)			$	(43	)
Enterprises
Maintenance costs							(1		)
Corporate interest and other
EnerBank earnings							2
Other							4
Total change							$	(38	)

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Consumers Electric Utility Results of Operations

					In Millions
Three Months Ended March 31	2016		2015			Change
Net Income Available to Common Stockholders	$	91	$	94		$	(3	)
Reasons for the change
Electric deliveries and rate increases						$	18
Maintenance and other operating expenses						(7		)
Depreciation and amortization						(6		)
General taxes						(4		)
Other income, net of expenses						(6		)
Interest charges						(2		)
Income taxes						4
Total change						$	(3	)

Following is a discussion of significant changes to net income available to common stockholders.

Electric Deliveries and Rate Increases: For the three months ended March 31, 2016, electric delivery revenues increased $18 million compared with 2015. This change reflected $48 million from a December 2015 rate increase and a $7 million increase associated with energy efficiency programs. These increases were offset partially by a $27 million decrease in sales, reflecting the second-warmest winter in Consumers’ history. Additionally, revenue associated with securitization bonds decreased $10 million, due primarily to the retirement in October 2015 of securitization bonds issued by Consumers in 2001. Deliveries to end-use customers were 9.1 billion kWh in 2016 and 9.5 billion kWh in 2015.

Maintenance and Other Operating Expenses: For the three months ended March 31, 2016, maintenance and other operating expenses increased $7 million compared with 2015. This change was due to a $9 million increase in storm restoration costs, a $7 million increase associated with energy efficiency programs, and a $3 million increase in forestry spending. These increases were offset partially by a $6 million decrease in postretirement benefit costs attributable primarily to the change to a full-yield-curve approach to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. The increases were also offset partially by a $3 million reduction in uncollectible accounts expense and a $3 million reduction in other operating and maintenance expenses.

Depreciation and Amortization: For the three months ended March 31, 2016, depreciation and amortization expense increased $6 million compared with 2015. This increase was due primarily to increased plant in service and an increase in depreciation rates authorized in a June 2015 rate order that became effective in December 2015. These increases were offset partially by lower amortization of securitized assets, reflecting the conclusion in October 2015 of Consumers’ 2001 securitization program.

General Taxes: For the three months ended March 31, 2016, general taxes increased $4 million compared with 2015, due to increased property taxes, reflecting higher capital spending.

Other Income, Net of Expenses: For the three months ended March 31, 2016, other income, net of expenses, decreased $6 million compared with 2015. This decrease reflected the absence, in 2016, of a $6 million gain related to a donation of CMS Energy stock by Consumers. The gain was eliminated on CMS Energy’s consolidated statements of income.

Income Taxes: For the three months ended March 31, 2016, income taxes decreased $4 million compared with 2015, due primarily to a change in the treatment of excess tax benefits on restricted stock awards as a result of the early adoption of a new accounting standard. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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Consumers Gas Utility Results of Operations

					In Millions
Three Months Ended March 31	2016		2015			Change
Net Income Available to Common Stockholders	$	81	$	121		$	(40	)
Reasons for the change
Gas deliveries and rate increases						$	(53	)
Maintenance and other operating expenses						3
Depreciation and amortization						(10		)
General taxes						(3		)
Other income, net of expenses						(2		)
Income taxes						25
Total change						$	(40	)

Following is a discussion of significant changes to net income available to common stockholders.

Gas Deliveries and Rate Increases: For the three months ended March 31, 2016, gas delivery revenues decreased $53 million compared with 2015. This change was attributable to $68 million in decreased sales, reflecting the second-warmest winter in Consumers’ history. The decrease was offset partially by $13 million from a January 2016 rate increase and $2 million in other revenue. Deliveries to end-use customers were 121 bcf in 2016 and 152 bcf in 2015.

Maintenance and Other Operating Expenses: For the three months ended March 31, 2016, maintenance and other operating expenses decreased $3 million compared with 2015. This change was due primarily to a decrease in postretirement benefit costs attributable to the change to a full-yield-curve approach to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans.

Depreciation and Amortization: For the three months ended March 31, 2016, depreciation and amortization expense increased $10 million compared with 2015, due primarily to increased plant in service.

General Taxes: For the three months ended March 31, 2016, general taxes increased $3 million compared with 2015, due primarily to increased property taxes, reflecting higher capital spending.

Income Taxes: For the three months ended March 31, 2016, income taxes decreased $25 million compared with 2015. Of this decrease, $23 million was attributable to lower gas utility earnings and $2 million to a change in the treatment of excess tax benefits on restricted stock awards as a result of the early adoption of a new accounting standard. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

Enterprises Results of Operations

					In Millions
Three Months Ended March 31	2016		2015			Change
Net Income Available to Common Stockholders	$	6	$	7		$	(1	)

For the three months ended March 31, 2016, net income of the enterprises segment decreased $1 million compared with 2015, due primarily to higher maintenance expenses.

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Corporate Interest and Other Results of Operations

						In Millions
Three Months Ended March 31	2016			2015			Change
Net Income (Loss) Available to Common Stockholders	$	(14	)	$	(20	)	$	6

For the three months ended March 31, 2016, corporate interest and other net expenses decreased $6 million compared with 2015, due primarily to a $4 million reduction in miscellaneous corporate costs and $2 million of higher earnings at EnerBank.

CASH POSITION, INVESTING, AND FINANCING

At March 31, 2016, CMS Energy had $205 million of consolidated cash and cash equivalents, which included $28 million of restricted cash and cash equivalents. At March 31, 2016, Consumers had $55 million of consolidated cash and cash equivalents, which included $28 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of net cash provided by operating activities for the three months ended March 31, 2016 and 2015:

						In Millions
Three Months Ended March 31	2016			2015			Change
CMS Energy, including Consumers
Net income	$	164		$	202		$	(38	)
Non-cash transactions1	327			363			(36		)
	491			565			(74		)
Changes in core working capital2	242			294			(52		)
Postretirement benefits contributions	(2		)	(31		)	29
Changes in other assets and liabilities, net	(99		)	(68		)	(31		)
Net cash provided by operating activities	$	632		$	760		$	(128	)
Consumers
Net income	$	172		$	215		$	(43	)
Non-cash transactions1	316			299			17
	488			514			(26		)
Changes in core working capital2	261			299			(38		)
Postretirement benefits contributions	(1		)	(30		)	29
Changes in other assets and liabilities, net	(83		)	3			(86		)
Net cash provided by operating activities	$	665		$	786		$	(121	)

1Non-cash transactions comprise depreciation and amortization, changes in deferred income taxes, postretirement benefits expense, and other non-cash operating activities.

2Core working capital comprises accounts receivable, notes receivable, accrued revenue, inventories, accounts payable, and accrued rate refunds.

For the three months ended March 31, 2016, net cash provided by operating activities at CMS Energy decreased $128 million compared with 2015 and net cash provided by operating activities at Consumers decreased $121 million compared with 2015. These changes were due primarily to lower net income, net of non-cash transactions, and lower collections of GCR underrecoveries, offset partially by a decrease in

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postretirement benefit contributions. Higher income tax payments to CMS Energy also contributed to the decrease in net cash provided by operating activities at Consumers.

Investing Activities

Presented in the following table are specific components of net cash used in investing activities for the three months ended March 31, 2016 and 2015:

						In Millions
Three Months Ended March 31	2016			2015			Change
CMS Energy, including Consumers
Capital expenditures	$	(407	)	$	(348	)	$	(59	)
Increase in EnerBank notes receivable	(16		)	(29		)	13
DB SERP fund contributions	-			(25		)	25
Costs to retire property and other	(28		)	(20		)	(8		)
Net cash used in investing activities	$	(451	)	$	(422	)	$	(29	)
Consumers
Capital expenditures	$	(406	)	$	(345	)	$	(61	)
DB SERP fund contributions	-			(17		)	17
Costs to retire property and other	(27		)	(21		)	(6		)
Net cash used in investing activities	$	(433	)	$	(383	)	$	(50	)

For the three months ended March 31, 2016, net cash used in investing activities at CMS Energy increased $29 million compared with 2015 and net cash used in investing activities at Consumers increased $50 million compared with 2015. At CMS Energy, the change was due primarily to higher capital expenditures at Consumers, offset partially by slower growth in EnerBank consumer lending and the absence, in 2016, of DB SERP fund contributions. The change at Consumers was due primarily to higher capital expenditures, offset partially by the absence, in 2016, of DB SERP fund contributions.

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Financing Activities

Presented in the following table are specific components of net cash used in financing activities for the three months ended March 31, 2016 and 2015:

							In Millions
Three Months Ended March 31	2016			2015			Change
CMS Energy, including Consumers
Payment of dividends on common stock	$	(86	)	$	(80	)	$	(6	)
Retirement of debt	(30		)	(11		)	(19		)
Issuance of common stock	63			4			59
Proceeds from EnerBank certificates of deposit, net	14			40			(26		)
Issuance of debt	30			100			(70		)
Decrease in notes payable	(249		)	(60		)	(189		)
Other financing activities	(12		)	(16		)	4
Net cash used in financing activities	$	(270	)	$	(23	)	$	(247	)
Consumers
Payment of dividends on common stock	$	(155	)	$	(122	)	$	(33	)
Retirement of debt	-			(11		)	11
Stockholder contribution from CMS Energy	150			150			-
Decrease in notes payable	(249		)	(60		)	(189		)
Other financing activities	(1		)	(6		)	5
Net cash used in financing activities	$	(255	)	$	(49	)	$	(206	)

For the three months ended March 31, 2016, net cash used in financing activities at CMS Energy increased $247 million compared with 2015 and net cash used in financing activities at Consumers increased $206 million compared with 2015. At CMS Energy, the change was due primarily to higher repayments under Consumers’ commercial paper program and a decrease in debt issuances, offset partially by increased common stock issuances under the continuous equity offering program. At Consumers, the change was due primarily to higher repayments under the commercial paper program and higher dividend payments to CMS Energy.

CAPITAL RESOURCES AND LIQUIDITY

CMS Energy uses dividends and tax-sharing payments from its subsidiaries and external financing and capital transactions to invest in its utility and non-utility businesses, retire debt, pay dividends, and fund its other obligations. The ability of CMS Energy’s subsidiaries, including Consumers, to pay dividends to CMS Energy depends upon each subsidiary’s revenues, earnings, cash needs, and other factors. In addition, Consumers’ ability to pay dividends is restricted by certain terms included in its debt covenants and articles of incorporation and potentially by FERC requirements and provisions under the Federal Power Act and the Natural Gas Act. For additional details on Consumers’ dividend restrictions, see Note 4, Financings and Capitalization—Dividend Restrictions. For the three months ended March 31, 2016, Consumers paid $155 million in dividends on its common stock to CMS Energy.

As a result of federal tax legislation passed in December 2015 that extends bonus depreciation, CMS Energy expects to be able to extend the use of federal net operating loss carryforwards by two years and, accordingly, defer its federal income tax payments through 2019. As a consequence, however, CMS Energy expects to receive lower tax-sharing payments from Consumers during that period. This may require CMS Energy to maintain higher levels of debt in order to invest in its businesses, pay dividends, and fund its general obligations. Despite this, CMS Energy does not anticipate a need for a block equity offering.

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In April 2015, CMS Energy entered into an updated continuous equity offering program. Under this program, CMS Energy may sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $100 million. CMS Energy issued common stock under the program and received net proceeds of $60 million in March 2016 and $30 million in 2015.

Consumers uses cash flows generated from operations and external financing transactions, as well as stockholder contributions from CMS Energy, to fund capital expenditures, retire debt, pay dividends, contribute to its employee benefit plans, and fund its other obligations. As a result of accelerated pension funding in recent years and several initiatives to reduce costs, Consumers anticipates continued strong cash flows from operating activities for the remainder of 2016.

Access to the financial and capital markets depends on CMS Energy’s and Consumers’ credit ratings and on market conditions. As evidenced by past financing transactions, CMS Energy and Consumers have had ready access to these markets. Barring major market dislocations or disruptions, CMS Energy and Consumers expect to continue to have ready access to the financial and capital markets. If access to these markets were to diminish or otherwise become restricted, CMS Energy and Consumers would implement contingency plans to address debt maturities, which could include reduced capital spending.

At March 31, 2016, CMS Energy had $549 million of its secured revolving credit facility available and Consumers had $893 million available. CMS Energy and Consumers use these credit facilities for general working capital purposes and to issue letters of credit. An additional source of liquidity is Consumers’ commercial paper program, which allows Consumers to issue, in one or more placements, up to $500 million in the aggregate in commercial paper notes with maturities of up to 365 days and that bear interest at fixed or floating rates. These issuances are supported by one of Consumers’ revolving credit facilities. While the amount of outstanding commercial paper does not reduce the revolving credit facility’s available capacity, Consumers would not issue commercial paper in an amount exceeding the available facility capacity. At March 31, 2016, no commercial paper notes were outstanding under this program. For additional details on CMS Energy’s and Consumers’ secured revolving credit facilities and commercial paper program, see Note 4, Financings and Capitalization.

Certain of CMS Energy’s and Consumers’ credit agreements, debt indentures, and other facilities contain covenants that require CMS Energy and Consumers to maintain certain financial ratios, as defined therein. At March 31, 2016, no default had occurred with respect to any financial covenants contained in CMS Energy’s and Consumers’ credit agreements, debt indentures, or other facilities. CMS Energy and Consumers were each in compliance with these covenants as of March 31, 2016, as presented in the following table:

	March 31, 2016
Credit Agreement, Indenture, or Facility	Limit		Actual
CMS Energy parent
Debt to EBITDA1	<	6.0 to 1.0	4.5 to 1.0
Consumers
Debt to Capital2	<	0.65 to 1.0	0.47 to 1.0

1Applies to CMS Energy’s $550 million revolving and $180 million term loan credit agreements.

2Applies to Consumers’ $650 million, $250 million, and $30 million revolving credit agreements, and $35 million and $68 million reimbursement agreements.

Components of CMS Energy’s and Consumers’ cash management plan include controlling operating expenses and capital expenditures and evaluating market conditions for financing and refinancing opportunities. CMS Energy’s and Consumers’ present level of cash and expected cash flows from

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operating activities, together with access to sources of liquidity, are anticipated to be sufficient to fund the companies’ contractual obligations for 2016 and beyond.

Off-Balance-Sheet Arrangements

CMS Energy, Consumers, and certain of their subsidiaries enter into various arrangements in the normal course of business to facilitate commercial transactions with third parties. These arrangements include indemnities, surety bonds, letters of credit, and financial and performance guarantees. Indemnities are usually agreements to reimburse a counterparty that may incur losses due to outside claims or breach of contract terms. The maximum payment that could be required under a number of these indemnity obligations is not estimable; the maximum obligation under indemnities for which such amounts were estimable was $153 million at March 31, 2016. While CMS Energy and Consumers believe it is unlikely that they will incur any material losses related to indemnities they have not recorded as liabilities, they cannot predict the impact of these contingent obligations on their liquidity and financial condition. For additional details on these and other guarantee arrangements, see Note 3, Contingencies and Commitments—Guarantees.

OUTLOOK

Several business trends and uncertainties may affect CMS Energy’s and Consumers’ financial condition and results of operations. These trends and uncertainties could have a material impact on CMS Energy’s and Consumers’ consolidated income, cash flows, or financial position. For additional details regarding these and other uncertainties, see Forward-Looking Statements and Information; Note 2, Regulatory Matters; Note 3, Contingencies and Commitments; and Part II—Item 1A. Risk Factors.

Consumers Electric Utility and Gas Utility Outlook and Uncertainties

Smart Energy: Consumers began the full-scale deployment of smart meters in 2012 and expects to complete it in 2017. Smart meters allow customers to monitor and manage their energy usage, which Consumers expects will help reduce demand during critical peak times, resulting in lower peak electric capacity requirements. In addition, Consumers is able to disconnect and reconnect service, read, and bill from smart meters remotely. Consumers will continue to add further functionality to its smart meters. Consumers is also installing communication modules on gas meters in areas where it provides both electricity and natural gas to customers. The communication modules allow Consumers to read and bill from gas meters remotely.

By the end of 2017, Consumers expects that it will have installed a total of 1.8 million smart meters and 600,000 communication modules throughout its service territory. As of March 31, 2016, Consumers had upgraded 889,000 electric customers to smart meters and had installed 116,000 communication modules on gas meters.

In areas where it provides only natural gas to customers, Consumers plans to deploy automated meter reading technology on gas meters beginning in 2018. Under this program, communication modules will be installed on 1.2 million gas meters, allowing Consumers to conduct drive-by meter reading.

Consumers Electric Utility Outlook and Uncertainties

Clean Energy Plan: Consumers continues to experience increasing demand for electricity due to Michigan’s recovering economy and increased use of air conditioning, consumer electronics, and other electric devices, offset partially by the predicted effects of energy efficiency and conservation. In order to address future capacity requirements and growing electric demand in Michigan, Consumers has a

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comprehensive clean energy plan designed to meet the short-term and long-term electricity needs of its customers through:

·energy efficiency

·demand management

·expanded use of renewable energy

·construction or purchase of electric generating units

·continued operation or upgrade of existing units

·purchases of short-term market capacity

In April 2016, Consumers retired seven of its coal-fueled electric generating units, representing 950 MW of generating capacity. Even with these retirements, Consumers expects to meet the capacity requirements of its full-service customers for 2016 through 2020 through the use of a 540-MW natural gas-fueled electric generating plant purchased in December 2015, upgrades at Ludington, expanded use of renewable energy, energy efficiency programs, and demand management programs. As demand forecasts become more certain, Consumers may take additional actions to cover any remaining capacity requirements for its full-service customers, including participation in the annual MISO planning resource auction.

In 2014, Consumers deferred the development of a proposed 700-MW natural gas-fueled electric generating plant at its Thetford complex in Genesee County, Michigan. The MDEQ granted an extension of the project’s air permit in January 2015, which will be void if Consumers does not start construction or obtain a further extension before July 2016.

Renewable Energy Plan: Consumers’ renewable energy plan details how Consumers expects to meet REC and capacity standards prescribed by the 2008 Energy Law. This law requires Consumers to submit RECs, which represent proof that the associated electricity was generated from a renewable energy resource, in an amount equal to at least ten percent of Consumers’ electric sales volume each year. Under its renewable energy plan, Consumers expects to meet its renewable energy requirement each year with a combination of newly generated RECs and previously generated RECs carried over from prior years.

In conjunction with its renewable energy plan, Consumers signed a 15-year agreement in September 2015 to purchase renewable capacity, energy, and RECs from a 100-MW wind park to be constructed in Huron County, Michigan. The wind park is expected to be operational in 2017. Consumers also completed construction of a community solar project in April 2016 and expects to complete construction of another later in the year. Together, these solar projects will provide a combined four MW of nameplate capacity.

Electric Customer Deliveries and Revenue: Consumers’ electric customer deliveries are largely dependent on Michigan’s economy. Consumers expects weather-adjusted electric deliveries to increase in 2016 by 1.5 to 2.0 percent compared with 2015.

Over the next five years, Consumers plans conservatively for average electric delivery growth of about 0.5 to 1.0 percent annually. This increase reflects growth in electric demand, offset partially by the predicted effects of energy efficiency programs and appliance efficiency standards. Actual delivery levels will depend on:

·energy conservation measures and results of energy efficiency programs

·weather fluctuations

·Michigan’s economic conditions, including utilization, expansion, or contraction of manufacturing facilities, population trends, and housing activity

Electric ROA: The 2008 Energy Law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount up to ten percent of Consumers’ weather-adjusted retail sales for the preceding calendar year. At March 31, 2016, electric

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deliveries under the ROA program were at the ten-percent limit and alternative electric suppliers were providing 749 MW of generation service to ROA customers. Of Consumers’ 1.8 million electric customers, 304 customers, or 0.02 percent, purchased electric generation service under the ROA program.

Michigan Energy Legislation: In 2015, Michigan’s governor outlined several key goals for the state’s energy policy, with a focus on increasing the use of clean energy sources, reducing Michigan’s reliance on coal, deploying smart meters, investing in the power grid and pipeline system, eliminating energy waste, and ensuring affordable, reliable, and adaptable energy while protecting the environment. Presently, the Michigan Senate and House of Representatives are considering two separate but similar pieces of legislation to address energy policy. Consumers is unable to predict the form and timing of any final legislation.

Electric Transmission: In 2012, ReliabilityFirst Corporation informed Consumers that Consumers may not have been properly registered to meet certain NERC electric reliability standards. Consumers assessed its registration status, taking into consideration FERC’s December 2012 order on the definition of a bulk electric system, and became registered under NERC standards as a transmission owner, transmission planner, and transmission operator in October 2015. In March 2016, Consumers received FERC approval to begin collecting transmission revenues under MISO’s transmission tariff effective April 2016. Consumers had previously received approval from the MPSC in 2014 and FERC in 2015 to reclassify $34 million of net plant assets from distribution to transmission. Consumers completed the reclassification in April 2016.

In a separate matter, METC notified Consumers that the reclassified assets need to be conveyed by Consumers to METC under the terms of the DTIA. Consumers disagrees with METC’s interpretation of the provisions of the DTIA. The parties remain in dispute resolution.

Electric Rate Matters: Rate matters are critical to Consumers’ electric utility business. For additional details on rate matters, see Note 2, Regulatory Matters.

Electric Rate Case: In March 2016, Consumers filed an application with the MPSC seeking an annual rate increase of $225 million, based on a 10.7 percent authorized return on equity. The filing requested authority to recover new investment in system reliability, environmental compliance, and technology enhancements. Presented in the following table are the components of the requested increase in revenue:

	In Millions
Components of the rate increase
Investment in rate base	$	161
Operating and maintenance costs	21
Gross margin	17
Cost of capital	15
Working capital	11
Total	$	225

The filing also seeks approval of an investment recovery mechanism that would allow recovery of $38 million in 2017, $92 million in 2018, and $92 million in 2019 for incremental investments that Consumers plans to make in those years, subject to reconciliation.

Electric Environmental Outlook: Consumers’ operations are subject to various state and federal environmental laws and regulations. Consumers estimates that it will incur capital expenditures of $0.7 billion from 2016 through 2020 to continue to comply with the Clean Air Act, Clean Water Act, and numerous state and federal environmental regulations. Consumers expects to recover these costs in customer rates, but cannot guarantee this result. Consumers’ primary environmental compliance focus includes, but is not limited to, the following matters:

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Air Quality: CSAPR, which became effective in January 2015, requires Michigan and 27 other states to improve air quality by reducing power plant emissions that, according to EPA computer models, contribute to ground-level ozone and fine particle pollution in other downwind states. In December 2015, the EPA proposed new ozone-season standards for CSAPR, which would begin in 2017. Consumers expects its emissions to be within the CSAPR allowance allocations.

In 2012, the EPA published emission standards for electric generating units, based on Section 112 of the Clean Air Act, calling the final rule MATS. Under MATS, all of Consumers’ existing coal-fueled electric generating units are required to add additional controls for hazardous air pollutants. Consumers met the extended deadline of April 2016 for five coal-fueled units and two oil/gas-fueled units it continues to operate and retired its seven remaining coal-fueled units. MATS is presently being litigated, but any decision is not presently expected to impact Consumers’ MATS compliance strategy. In addition, Consumers must still comply with the Michigan Mercury Rule and with its settlement agreement with the EPA entered into in November 2014 concerning opacity and NSR.

In October 2015, the EPA released its new rule to lower the NAAQS for ozone. The new ozone NAAQS will make it more difficult to construct or modify power plants in many areas of the country, including some parts of Michigan, if the areas are designated to be in nonattainment of the new standard. Consumers is evaluating this rule to determine what, if any, effect it will have on its electric generating units.

Presently, Consumers’ strategy to comply with air quality regulations, including CSAPR, NAAQS, and MATS, involves the installation of emission control equipment at some facilities and the suspension of operations at others; however, Consumers continues to evaluate these rules in conjunction with other EPA rulemakings, litigation, and congressional action. This evaluation could result in:

·changes in environmental compliance costs related to Consumers’ coal-fueled power units

·a change in the fuel mix at coal-fueled and oil-fueled power units

·changes in how certain units are used

·the retirement, mothballing, or repowering with an alternative fuel of some of Consumers’ generating units

Greenhouse Gases: There have been numerous legislative and regulatory initiatives at the state, regional, national, and international levels that involve the potential regulation of greenhouse gases. Consumers continues to monitor and comment on these initiatives and to follow litigation involving greenhouse gases. Consumers believes Congress may eventually pass greenhouse gas legislation, but is unable to predict the form and timing of any final legislation.

In August 2015, the EPA finalized new rules pursuant to Section 111(b) of the Clean Air Act to limit carbon dioxide emissions from new electric generating units. New coal-fueled units will not be able to meet this limit without installing carbon dioxide control equipment using such methods as carbon capture and sequestration. Also in August 2015, the EPA finalized new rules pursuant to Section 111(b) of the Clean Air Act to limit carbon dioxide emissions from modified or reconstructed electric generating units. Both of these rules are being litigated.

In October 2015, the EPA published final rules pursuant to Section 111(d) of the Clean Air Act to limit carbon dioxide emissions from existing electric generating units, calling the rules the “Clean Power Plan.” The rules would require a 32 percent nationwide reduction in carbon emissions from existing power plants by 2030 (based on 2005 levels). Initial state implementation plans would be due September 2016 with extensions available until 2018. States choosing not to develop their own implementation plans would be subject to the federal plan.

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Certain states, corporations, and industry groups have initiated litigation opposing the proposed Clean Power Plan. In February 2016, the U.S. Supreme Court stayed the Clean Power Plan while the litigation proceeds. While Michigan’s Attorney General has joined the litigation, the governor had indicated that Michigan plans to file a state carbon implementation plan. In light of the stay of the Clean Power Plan, the State of Michigan has ceased additional work pending outcome of the litigation.

In December 2015, a group of 195 countries finalized the Paris Agreement, which governs carbon dioxide reduction measures beginning in 2020. As part of this agreement, the United States pledged a 26 percent reduction in greenhouse-gas-emissions by 2025 (with aspirations to achieve a 28 percent reduction) compared with 2005 levels. These targets are in line with the now-stayed Clean Power Plan targets. While these emission reduction commitments are non-binding, they will be governed by the Clean Power Plan should it survive judicial scrutiny.

Consumers believes that it is favorably positioned to deal with the impact of carbon regulation through its clean energy plan, its present carbon reduction target, and its emphasis on supply diversity. Consumers cannot, however, predict the outcome of these EPA rules in court, or of Michigan’s implementation plan, which was to be submitted for EPA review and approval in 2018, but now will likely be delayed. Consumers will continue to monitor regulatory activity regarding greenhouse gas emissions standards that may affect electric generating units.

Litigation, as well as federal laws, EPA regulations regarding greenhouse gases, or similar treaties, state laws, or rules, if enacted or ratified, could require Consumers to replace equipment, install additional emission control equipment, purchase emission allowances, curtail operations, arrange for alternative sources of supply, or take other steps to manage or lower the emission of greenhouse gases. Although associated capital or operating costs relating to greenhouse gas regulation or legislation could be material and cost recovery cannot be assured, Consumers expects to recover these costs and capital expenditures in rates consistent with the recovery of other reasonable costs of complying with environmental laws and regulations.

CCRs: In April 2015, the EPA published a final rule regulating CCRs, such as coal ash, under the Resource Conservation and Recovery Act. The final rule adopts minimum standards for beneficially reusing and disposing of non-hazardous CCRs. The rule establishes new minimum requirements for site location, groundwater monitoring, flood protection, storm water design, fugitive dust control, and public disclosure of information. The rule also sets out conditions under which CCR units would be forced to cease receiving CCR and non-CCR waste and initiate closure based on the inability to achieve minimum safety standards, meet a location standard, or meet minimum groundwater standards.

Water: The EPA’s rule to regulate existing electric generating plant cooling water intake systems under Section 316(b) of the Clean Water Act became effective in October 2014. The rule is aimed at reducing alleged harmful impacts on fish and shellfish. Consumers believes its environmental strategy will allow it to achieve compliance with the final rule. In November 2015, the EPA released its final effluent limitation guidelines, which set stringent new requirements for the discharge of arsenic, mercury, selenium, and nitrogen from electric generating units into wastewater streams.

In June 2015, the EPA and the U.S. Army Corps of Engineers published a final rule redefining “waters of the United States,” which designates the EPA’s jurisdiction under the Clean Water Act. Numerous states and other interested parties, including Michigan’s Attorney General, have filed suits in federal courts to block the rule, which was stayed in October 2015, and that litigation remains pending. Consumers does not expect any adverse changes to its environmental strategy as a result of the final rule.

28

Many of Consumers’ facilities maintain NPDES permits, which are valid for five years and vital to the facilities’ operations. Failure of the MDEQ to renew any NPDES permit, a successful appeal against a permit, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.

PCBs: In 2010, the EPA issued an Advance Notice of Proposed Rulemaking, indicating that it is considering a variety of regulatory actions with respect to PCBs. One approach would aim to phase out equipment containing PCBs by 2025. Another approach would eliminate an exemption for small equipment containing PCBs. To comply with any such regulatory actions, Consumers could incur substantial costs associated with existing electrical equipment potentially containing PCBs. A proposed rule is expected in 2016.

Other electric environmental matters could have a material impact on Consumers’ outlook. For additional details on other electric environmental matters, see Note 3, Contingencies and Commitments—Consumers Electric Utility Contingencies—Electric Environmental Matters.

Consumers Gas Utility Outlook and Uncertainties

Gas Deliveries: Consumers expects weather-adjusted gas deliveries in 2016 to increase by 1.0 percent compared with 2015. Over the next five years, Consumers plans conservatively for stable deliveries. This outlook reflects modest growth in gas demand offset by the predicted effects of energy efficiency and conservation. Actual delivery levels from year to year may vary from this expectation due to:

·weather fluctuations

·use by power producers

·availability and development of renewable energy sources

·gas price changes

·Michigan economic conditions, including population trends and housing activity

·the price of competing energy sources or fuels

·energy efficiency and conservation impacts

Gas Rate Matters: Rate matters are critical to Consumers’ gas utility business. For details on rate matters, see Note 2, Regulatory Matters.

Gas Environmental Outlook: Consumers expects to incur response activity costs at a number of sites, including 23 former MGP sites. For additional details, see Note 3, Contingencies and Commitments—Consumers Gas Utility Contingencies—Gas Environmental Matters.

Enterprises Outlook and Uncertainties

The primary focus with respect to CMS Energy’s non-utility businesses is to optimize cash flow and maximize the value of their generating assets, which represent 1,077 MW of capacity.

Trends, uncertainties, and other matters that could have a material impact on CMS Energy’s consolidated income, cash flows, or financial position include:

·changes in energy and capacity prices

·changes in commodity prices and interest rates on certain derivative contracts that do not qualify for hedge accounting and must be marked to market through earnings

·changes in various environmental laws, regulations, principles, or practices, or in their interpretation

·the outcome of certain legal proceedings

29

·indemnity and environmental remediation obligations at Bay Harbor

·obligations related to a tax claim from the government of Equatorial Guinea

·representations, warranties, and indemnities provided by CMS Energy in connection with previous sales of assets

For additional details regarding the enterprises segment’s uncertainties, see Note 3, Contingencies and Commitments.

Other Outlook and Uncertainties

EnerBank: EnerBank is a Utah state-chartered, FDIC-insured industrial bank providing unsecured consumer installment loans for financing home improvements. EnerBank represented three percent of CMS Energy’s net assets at March 31, 2016 and five percent of CMS Energy’s net income available to common stockholders for the three months ended March 31, 2016. The carrying value of EnerBank’s loan portfolio was $1.2 billion at March 31, 2016. Its loan portfolio was funded primarily by certificates of deposit of $1.1 billion. The twelve-month rolling average net default rate on loans held by EnerBank was 0.7 percent at March 31, 2016. CMS Energy is required both by law and by contract to provide financial support, including infusing additional capital, to ensure that EnerBank satisfies mandated capital requirements and has sufficient liquidity to operate. With its self-funding plan, EnerBank has exceeded these requirements historically and exceeded them as of March 31, 2016.

Litigation: CMS Energy, Consumers, and certain of their subsidiaries are named as parties in various litigation matters, as well as in administrative proceedings before various courts and governmental agencies, arising in the ordinary course of business. For additional details regarding these and other legal matters, see Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

NEW ACCOUNTING STANDARDS

For details regarding new accounting standards issued but not yet effective, see Note 1, New Accounting Standards.

30

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31

CMS Energy Corporation

Consolidated Statements of Income (Unaudited)

In Millions, Except Per Share Amounts
Three Months Ended March 31	2016			2015
Operating Revenue	$	1,801		$	2,111
Operating Expenses
Fuel for electric generation	125			167
Purchased and interchange power	346			349
Purchased power – related parties	22			23
Cost of gas sold	354			589
Maintenance and other operating expenses	293			283
Depreciation and amortization	238			222
General taxes	87			81
Total operating expenses	1,465			1,714
Operating Income	336			397
Other Income (Expense)
Interest income	1			1
Allowance for equity funds used during construction	3			2
Income from equity method investees	4			4
Other income	3			3
Other expense	(3		)	(4		)
Total other income	8			6
Interest Charges
Interest on long-term debt	100			96
Other interest expense	7			6
Allowance for borrowed funds used during construction	(1		)	(1		)
Total interest charges	106			101
Income Before Income Taxes	238			302
Income Tax Expense	74			100
Net Income Available to Common Stockholders	$	164		$	202
Basic Earnings Per Average Common Share	$	0.59		$	0.73
Diluted Earnings Per Average Common Share	$	0.59		$	0.73
Dividends Declared Per Common Share	$	0.31		$	0.29

The accompanying notes are an integral part of these statements.

32

CMS Energy Corporation

Consolidated Statements of Comprehensive Income (Unaudited)

			In Millions
Three Months Ended March 31	2016		2015
Net Income	$	164	$	202
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax of $- and $1	-		1
Other Comprehensive Income	-		1
Comprehensive Income	$	164	$	203

The accompanying notes are an integral part of these statements.

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34

CMS Energy Corporation

Consolidated Statements of Cash Flows (Unaudited)

				In Millions
Three Months Ended March 31	2016			2015
Cash Flows from Operating Activities
Net income	$	164		$	202
Adjustments to reconcile net income to net cash provided
by operating activities
Depreciation and amortization	238			222
Deferred income taxes and investment tax credit	68			99
Other non-cash operating activities	21			42
Cash provided by (used in) changes in assets and liabilities
Accounts receivable, notes receivable, and accrued revenue	16			(48		)
Inventories	274			378
Accounts payable and accrued refunds	(48		)	(36		)
Other current and non-current assets and liabilities	(101		)	(99		)
Net cash provided by operating activities	632			760
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)	(407		)	(348		)
Increase in EnerBank notes receivable	(16		)	(29		)
Cost to retire property and other investing activities	(28		)	(45		)
Net cash used in investing activities	(451		)	(422		)
Cash Flows from Financing Activities
Proceeds from issuance of debt	30			100
Proceeds from EnerBank certificates of deposit, net	14			40
Issuance of common stock	63			4
Retirement of long-term debt	(30		)	(11		)
Payment of dividends on common stock	(86		)	(80		)
Decrease in notes payable	(249		)	(60		)
Payment of capital lease obligations and other financing costs	(12		)	(16		)
Net cash used in financing activities	(270		)	(23		)
Net Increase (Decrease) in Cash and Cash Equivalents	(89		)	315
Cash and Cash Equivalents, Beginning of Period	266			207
Cash and Cash Equivalents, End of Period	$	177		$	522
Other non-cash investing and financing activities
Non-cash transactions
Capital expenditures not paid	$	173		$	117

The accompanying notes are an integral part of these statements.

35

CMS Energy Corporation

Consolidated Balance Sheets (Unaudited)

ASSETS
			In Millions
	March 31		December 31
	2016		2015
Current Assets
Cash and cash equivalents	$	177	$	266
Restricted cash and cash equivalents	28		19
Accounts receivable and accrued revenue, less allowances of $29 in 2016 and $28 in 2015	730		774
Notes receivable, less allowances of $10 in 2016 and $9 in 2015	135		128
Notes receivable held for sale	16		16
Accounts receivable – related parties	11		11
Inventories at average cost
Gas in underground storage	314		568
Materials and supplies	120		126
Generating plant fuel stock	64		84
Deferred property taxes	193		235
Regulatory assets	11		16
Prepayments and other current assets	91		77
Total current assets	1,890		2,320
Plant, Property, and Equipment
Plant, property, and equipment, gross	19,334		18,943
Less accumulated depreciation and amortization	5,878		5,747
Plant, property, and equipment, net	13,456		13,196
Construction work in progress	1,451		1,509
Total plant, property, and equipment	14,907		14,705
Other Non-current Assets
Regulatory assets	1,827		1,840
Accounts and notes receivable	1,034		1,027
Investments	64		64
Other	315		343
Total other non-current assets	3,240		3,274
Total Assets	$	20,037	$	20,299

36

LIABILITIES AND EQUITY
				In Millions
	March 31			December 31
	2016			2015
Current Liabilities
Current portion of long-term debt, capital leases, and financing obligation	$	950		$	706
Notes payable	-			249
Accounts payable	534			633
Accounts payable – related parties	9			9
Accrued rate refunds	34			26
Accrued interest	72			106
Accrued taxes	254			349
Regulatory liabilities	76			82
Other current liabilities	118			142
Total current liabilities	2,047			2,302
Non-current Liabilities
Long-term debt	8,170			8,400
Non-current portion of capital leases and financing obligation	114			118
Regulatory liabilities	2,092			2,088
Postretirement benefits	581			591
Asset retirement obligations	440			439
Deferred investment tax credit	55			56
Deferred income taxes	2,078			2,017
Other non-current liabilities	314			313
Total non-current liabilities	13,844			14,022
Commitments and Contingencies (Notes 2 and 3)
Equity
Common stockholders’ equity
Common stock, authorized 350.0 shares; outstanding 279.2 shares in 2016 and 277.2 shares in 2015	3			3
Other paid-in capital	4,897			4,837
Accumulated other comprehensive loss	(47		)	(47		)
Accumulated deficit	(744		)	(855		)
Total common stockholders’ equity	4,109			3,938
Noncontrolling interests	37			37
Total equity	4,146			3,975
Total Liabilities and Equity	$	20,037		$	20,299

The accompanying notes are an integral part of these statements.

37

CMS Energy Corporation

Consolidated Statements of Changes in Equity (Unaudited)

				In Millions
Three Months Ended March 31	2016			2015
Total Equity at Beginning of Period	$	3,975		$	3,707
Common Stock
At beginning and end of period	3			3
Other Paid-in Capital
At beginning of period	4,837			4,774
Common stock issued	70			10
Common stock repurchased	(10		)	(11		)
Common stock reissued	-			10
At end of period	4,897			4,783
Accumulated Other Comprehensive Loss
At beginning of period	(47		)	(49		)
Retirement benefits liability
At beginning of period	(43		)	(48		)
Amortization of net actuarial loss	-			1
At end of period	(43		)	(47		)
Investments
At beginning and end of period	(4		)	(1		)
At end of period	(47		)	(48		)
Accumulated Deficit
At beginning of period	(855		)	(1,058		)
Cumulative effect of change in accounting principle	33			-
Net income attributable to CMS Energy	164			202
Dividends declared on common stock	(86		)	(80		)
At end of period	(744		)	(936		)
Noncontrolling Interests
At beginning and end of period	37			37
Total Equity at End of Period	$	4,146		$	3,839

The accompanying notes are an integral part of these statements.

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39

Consumers Energy Company

Consolidated Statements of Income (Unaudited)

				In Millions
Three Months Ended March 31	2016			2015
Operating Revenue	$	1,723		$	2,028
Operating Expenses
Fuel for electric generation	99			133
Purchased and interchange power	343			346
Purchased power – related parties	22			23
Cost of gas sold	351			583
Maintenance and other operating expenses	269			265
Depreciation and amortization	237			220
General taxes	85			79
Total operating expenses	1,406			1,649
Operating Income	317			379
Other Income (Expense)
Interest income	1			1
Allowance for equity funds used during construction	3			2
Other income	3			12
Other expense	(3		)	(4		)
Total other income	4			11
Interest Charges
Interest on long-term debt	65			63
Other interest expense	3			3
Allowance for borrowed funds used during construction	(1		)	(1		)
Total interest charges	67			65
Income Before Income Taxes	254			325
Income Tax Expense	82			110
Net Income Available to Common Stockholder	$	172		$	215

The accompanying notes are an integral part of these statements.

40

Consumers Energy Company

Consolidated Statements of Comprehensive Income (Unaudited)

			In Millions
Three Months Ended March 31	2016		2015
Net Income	$	172	$	215
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax of $- for all periods	-		1
Investments
Unrealized gain on investments, net of tax of $2 and $-	3		-
Reclassification adjustments included in net income, net of tax of $- and $(3)	-		(5		)
Other Comprehensive Income (Loss)	3		(4		)
Comprehensive Income	$	175	$	211

The accompanying notes are an integral part of these statements.

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42

Consumers Energy Company

Consolidated Statements of Cash Flows (Unaudited)

				In Millions
Three Months Ended March 31	2016			2015
Cash Flows from Operating Activities
Net income	$	172		$	215
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	237			220
Deferred income taxes and investment tax credit	62			39
Other non-cash operating activities	17			40
Cash provided by (used in) changes in assets and liabilities
Accounts receivable, notes receivable, and accrued revenue	33			(43		)
Inventories	270			374
Accounts payable and accrued refunds	(42		)	(32		)
Other current and non-current assets and liabilities	(84		)	(27		)
Net cash provided by operating activities	665			786
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)	(406		)	(345		)
Cost to retire property and other investing activities	(27		)	(38		)
Net cash used in investing activities	(433		)	(383		)
Cash Flows from Financing Activities
Retirement of long-term debt	-			(11		)
Payment of dividends on common stock	(155		)	(122		)
Stockholder contribution	150			150
Decrease in notes payable	(249		)	(60		)
Payment of capital lease obligations and other financing costs	(1		)	(6		)
Net cash used in financing activities	(255		)	(49		)
Net Increase (Decrease) in Cash and Cash Equivalents	(23		)	354
Cash and Cash Equivalents, Beginning of Period	50			71
Cash and Cash Equivalents, End of Period	$	27		$	425
Other non-cash investing and financing activities
Non-cash transactions
Capital expenditures not paid	$	154		$	117

The accompanying notes are an integral part of these statements.

43

Consumers Energy Company

Consolidated Balance Sheets (Unaudited)

ASSETS
			In Millions
	March 31		December 31
	2016		2015
Current Assets
Cash and cash equivalents	$	27	$	50
Restricted cash and cash equivalents	28		19
Accounts receivable and accrued revenue, less allowances of $29 in 2016 and $28 in 2015	713		758
Accounts receivable – related parties	1		17
Inventories at average cost
Gas in underground storage	314		568
Materials and supplies	115		120
Generating plant fuel stock	63		80
Deferred property taxes	193		235
Regulatory assets	11		16
Prepayments and other current assets	84		66
Total current assets	1,549		1,929
Plant, Property, and Equipment
Plant, property, and equipment, gross	19,165		18,797
Less accumulated depreciation and amortization	5,821		5,676
Plant, property, and equipment, net	13,344		13,121
Construction work in progress	1,449		1,467
Total plant, property, and equipment	14,793		14,588
Other Non-current Assets
Regulatory assets	1,827		1,840
Accounts and notes receivable	10		10
Investments	34		29
Other	209		239
Total other non-current assets	2,080		2,118
Total Assets	$	18,422	$	18,635

44

LIABILITIES AND EQUITY
				In Millions
	March 31			December 31
	2016			2015
Current Liabilities
Current portion of long-term debt, capital leases, and financing obligation	$	469		$	220
Notes payable	-			249
Accounts payable	521			613
Accounts payable – related parties	15			15
Accrued rate refunds	34			26
Accrued interest	47			65
Accrued taxes	262			352
Regulatory liabilities	76			82
Other current liabilities	87			109
Total current liabilities	1,511			1,731
Non-current Liabilities
Long-term debt	4,934			5,183
Non-current portion of capital leases and financing obligation	114			118
Regulatory liabilities	2,092			2,088
Postretirement benefits	519			529
Asset retirement obligations	439			438
Deferred investment tax credit	55			56
Deferred income taxes	2,799			2,710
Other non-current liabilities	243			236
Total non-current liabilities	11,195			11,358
Commitments and Contingencies (Notes 2 and 3)
Equity
Common stockholder’s equity
Common stock, authorized 125.0 shares; outstanding 84.1 shares for both periods	841			841
Other paid-in capital	3,874			3,724
Accumulated other comprehensive loss	(3		)	(6		)
Retained earnings	967			950
Total common stockholder’s equity	5,679			5,509
Preferred stock	37			37
Total equity	5,716			5,546
Total Liabilities and Equity	$	18,422		$	18,635

The accompanying notes are an integral part of these statements.

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Consumers Energy Company

Consolidated Statements of Changes in Equity (Unaudited)

				In Millions
Three Months Ended March 31	2016			2015
Total Equity at Beginning of Period	$	5,546		$	5,277
Common Stock
At beginning and end of period	841			841
Other Paid-in Capital
At beginning of period	3,724			3,574
Stockholder contribution	150			150
At end of period	3,874			3,724
Accumulated Other Comprehensive Loss
At beginning of period	(6		)	(7		)
Retirement benefits liability
At beginning of period	(19		)	(26		)
Amortization of net actuarial loss	-			1
At end of period	(19		)	(25		)
Investments
At beginning of period	13			19
Unrealized gain on investments	3			-
Reclassification adjustments included in net income	-			(5		)
At end of period	16			14
At end of period	(3		)	(11		)
Retained Earnings
At beginning of period	950			832
Net income	172			215
Dividends declared on common stock	(155		)	(122		)
At end of period	967			925
Preferred Stock
At beginning and end of period	37			37
Total Equity at End of Period	$	5,716		$	5,516

The accompanying notes are an integral part of these statements.

46

CMS Energy Corporation

Consumers Energy Company

Notes to the Unaudited Consolidated Financial Statements

These interim consolidated financial statements have been prepared by CMS Energy and Consumers in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. As a result, CMS Energy and Consumers have condensed or omitted certain information and note disclosures normally included in consolidated financial statements prepared in accordance with GAAP. CMS Energy and Consumers have reclassified certain prior period amounts to conform to the presentation in the current period. In management’s opinion, the unaudited information contained in this report reflects all adjustments of a normal recurring nature necessary to ensure the fair presentation of financial position, results of operations, and cash flows for the periods presented. The notes to the unaudited consolidated financial statements and the related unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the 2015 Form 10-K. Due to the seasonal nature of CMS Energy’s and Consumers’ operations, the results presented for this interim period are not necessarily indicative of results to be achieved for the fiscal year.

1:NEW ACCOUNTING STANDARDS

Implementation of New Accounting Standards

ASU 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, addresses stock awards with performance targets that can be met after an employee has completed the required service period. The standard was issued to resolve diversity in practice regarding the accounting treatment for this type of award. Under the new guidance, the probability of the performance target being met should be factored into compensation expense each period. This guidance is consistent with the accounting that CMS Energy and Consumers already applied to awards of this type. Therefore, the standard had no impact on CMS Energy’s or Consumers’ consolidated financial statements.

ASU 2015-02, Amendments to the Consolidation Analysis: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, provides amended guidance on whether reporting entities should consolidate certain legal entities, including limited partnerships. CMS Energy and Consumers determined that the standard does not change any of their consolidation conclusions or have any impact on their consolidated income, cash flows, or financial position.

ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Previously, debt issuance costs were reported as an asset. The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. In accordance with the standard, CMS Energy included $40 million and Consumers included $22 million of unamortized debt issuance costs in long-term debt on their consolidated balance sheets at March 31, 2016. In addition, this standard requires that companies apply the new guidance retrospectively to all prior periods presented. Accordingly, CMS Energy reclassified $41 million and Consumers reclassified $23 million of unamortized debt issuance costs from other non-current assets to long-term debt on their consolidated balance sheets at December 31, 2015.

47

ASU 2016-09, Improvements to Employee Share-Based Payment Accounting: This standard was issued to simplify and improve the accounting for employee share-based payment awards. The standard will be effective on January 1, 2017 for CMS Energy and Consumers, but early adoption is permitted. CMS Energy and Consumers elected to adopt the standard as of January 1, 2016. The standard requires all excess tax benefits and deficiencies that occur upon vesting of employee stock awards to be recognized in net income. Previously, CMS Energy and Consumers did not record excess tax benefits on restricted stock awards in net income but, under this standard, CMS Energy and Consumers recorded $6 million of excess tax benefits in net income for the three months ended March 31, 2016. Also, in accordance with the standard, CMS Energy recorded a $33 million cumulative adjustment to its accumulated deficit at January 1, 2016. This amount represented excess federal tax benefits that CMS Energy had not recognized in prior periods due to the use of tax loss carryforwards. The implementation of this standard had no other material impacts on CMS Energy’s or Consumers’ consolidated financial statements.

New Accounting Standards Not Yet Effective

ASU 2014-09, Revenue from Contracts with Customers: This standard, which will become effective January 1, 2018 for CMS Energy and Consumers, provides new guidance for recognizing revenue from contracts with customers. A primary objective of the standard is to provide a single, comprehensive revenue recognition model that will be applied across entities, industries, and capital markets. The new guidance will replace most of the existing revenue recognition requirements in GAAP, although certain guidance specific to rate-regulated utilities will be retained. Entities will have the option to apply the standard retrospectively to all prior periods presented, or to apply it retrospectively only to contracts existing at the effective date, with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

ASU 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities: This standard, which will be effective January 1, 2018 for CMS Energy and Consumers, is intended to improve the accounting for financial instruments. The standard will require investments in equity securities to be measured at fair value, with changes in fair value recognized in net income, except for certain investments such as those that qualify for equity-method accounting. The standard will no longer permit unrealized gains and losses for certain equity investments to be recorded in AOCI. CMS Energy and Consumers presently record unrealized gains and losses on certain equity investments, including the mutual funds in the DB SERP and Consumers’ investment in CMS Energy common stock, in AOCI. For further details on these investments, see Note 6, Financial Instruments. Entities will apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. CMS Energy and Consumers are evaluating whether there may be further impacts of the standard on their consolidated financial statements.

ASU 2016-02, Leases: This standard, which will be effective January 1, 2019 for CMS Energy and Consumers, establishes a new accounting model for leases. The standard will require companies to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which are not recorded on the balance sheet under existing standards. The new guidance will also amend the definition of a lease to require that a lessee control the use of a specified asset, and not simply control or take the output of the asset. On the income statement, leases that meet existing capital lease criteria will generally be accounted for under a financing model, while operating leases will generally be accounted for under a straight-line expense model. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

48

2:REGULATORY MATTERS

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost allocation among customers, the adequacy of the record evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

Electric Rate Case: In December 2014, Consumers filed an application with the MPSC seeking an annual rate increase of $163 million, based on a 10.7 percent authorized return on equity. In June 2015, Consumers self-implemented an annual rate increase of $110 million, subject to refund with interest. The MPSC issued an order in November 2015, authorizing an annual rate increase of $165 million, based on a 10.3 percent authorized rate of return on equity. In April 2016, upon the retirement of seven coal-fueled electric generating units, the annual rate increase was reduced to $126 million.

In February 2016, Consumers filed a reconciliation of total revenues collected during self-implementation to those that would have collected under final rates. Consumers’ reconciliation indicated that no refund would be required.

Gas Rate Case: In July 2015, Consumers filed an application with the MPSC seeking an annual rate increase of $85 million, based on a 10.7 percent authorized return on equity. In January 2016, Consumers self-implemented an annual rate increase of $60 million, subject to refund with interest. In April 2016, the MPSC approved a settlement agreement authorizing a $40 million annual rate increase. Consumers had a recorded reserve for customer refunds at March 31, 2016 that it believes is adequate.

Energy Optimization Plan Incentive: Consumers will file its 2015 energy optimization reconciliation in 2016, requesting the MPSC’s approval to collect the maximum performance incentive of $18 million from customers for exceeding its statutory savings targets in 2015 and for achieving certain other goals.

3:CONTINGENCIES AND COMMITMENTS

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities. Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made. Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Gas Index Price Reporting Litigation: CMS Energy, along with CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company, have been named as defendants in four class action lawsuits and one individual lawsuit arising as a result of alleged inaccurate natural gas price reporting to publications that report trade information. Allegations include price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Kansas, Missouri, and Wisconsin. Plaintiffs are

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making claims for the following: treble damages, full consideration damages, exemplary damages, costs, interest, and/or attorneys’ fees.

After removal to federal court, all of the cases were transferred to a single federal district court pursuant to the multidistrict litigation process. In 2010 and 2011, all claims against CMS Energy defendants were dismissed by the district court based on FERC preemption. Plaintiffs filed appeals in all of the cases. The issues on appeal were whether the district court erred in dismissing the cases based on FERC preemption and denying the plaintiffs’ motions for leave to amend their complaints to add a federal Sherman Act antitrust claim. The plaintiffs did not appeal the dismissal of CMS Energy as a defendant in these cases, but other CMS Energy entities remain as defendants.

In 2013, the U.S. Court of Appeals for the Ninth Circuit reversed the district court decision. The appellate court found that FERC preemption does not apply under the facts of these cases. The appellate court affirmed the district court’s denial of leave to amend to add federal antitrust claims. The matter was appealed to the U.S. Supreme Court, which in 2015 upheld the Ninth Circuit’s decision. The cases have been remanded back to the federal district court.

These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions. Presently, any estimate of liability would be highly speculative; the amount of CMS Energy’s reasonably possible loss would be based on widely varying models previously untested in this context. If the outcome after appeals is unfavorable, these cases could negatively affect CMS Energy’s liquidity, financial condition, and results of operations.

Bay Harbor: CMS Land retained environmental remediation obligations for the collection and treatment of leachate, a liquid consisting of water and other substances, at Bay Harbor after selling its interests in the development in 2002. Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site. In 2012, CMS Land and the MDEQ finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit issued in 2010. CMS Land is presently working with the MDEQ to renew this permit, which requires renewal every five years. Until a new permit is issued, CMS Land is authorized to continue operating under the existing permit.

Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters. CMS Land and other parties have received a demand for payment from the EPA in the amount of $8 million, plus interest. The EPA is seeking recovery under CERCLA of response costs allegedly incurred at Bay Harbor. These costs exceed what was agreed to in a 2005 order between CMS Land and the EPA, and CMS Land has communicated to the EPA that it does not believe that this is a valid claim. The EPA has filed a lawsuit to collect these costs.

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At March 31, 2016, CMS Energy had a recorded liability of $54 million for its remaining obligations. CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs. The undiscounted amount of the remaining obligation is $69 million. CMS Energy expects to pay the following amounts for long-term liquid disposal and operating and maintenance costs in 2016 and in each of the next four years:

In Millions
	2016		2017		2018		2019		2020
CMS Energy
Long-term liquid disposal and operating and maintenance costs	$	6	$	5	$	4	$	4	$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability. Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim: In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea. The government of Equatorial Guinea claims that CMS Energy owes $152 million in taxes, plus significant penalties and interest, in connection with the sale. The matter is proceeding to formal arbitration. CMS Energy has concluded that the government’s tax claim is without merit and is contesting the claim, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters: Consumers’ operations are subject to environmental laws and regulations. Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste: Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA. Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome. Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $3 million and $5 million. At March 31, 2016, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA. CERCLA liability is joint and several. In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site. The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site. In 2011, Consumers received a follow-up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River. All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability. Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million. Various factors, including the number of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At

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March 31, 2016, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain. Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB: In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington. Consumers removed part of the PCB material and replaced it with non-PCB material. Consumers has had several communications with the EPA regarding this matter. Consumers cannot predict the financial impact or outcome of this matter.

Consumers Gas Utility Contingencies

Gas Environmental Matters: Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA. These sites include 23 former MGP facilities. Consumers operated the facilities on these sites for some part of their operating lives. For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At March 31, 2016, Consumers had a recorded liability of $114 million for its remaining obligations for these sites. This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent. The undiscounted amount of the remaining obligation is $130 million. Consumers expects to pay the following amounts for remediation and other response activity costs in 2016 and in each of the next four years:

In Millions
	2016		2017		2018		2019		2020
Consumers
Remediation and other response activity costs	$	15	$	20	$	11	$	14	$	19

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability. At one of the MGP sites, Consumers is evaluating the timing and approach of its remediation strategy, which could result in a change to its cost estimates in 2016.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period. At March 31, 2016, Consumers had a regulatory asset of $145 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million. At March 31, 2016, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability.

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Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at March 31, 2016:

			In Millions
			Maximum		Carrying
Guarantee Description	Issue Date	Expiration Date	Obligation		Amount
CMS Energy, including Consumers
Indemnity obligations from asset sales and other agreements1	Various	Indefinite	$	153	$	7
Guarantees2	Various	Indefinite	49		-
Consumers
Gurarantee2	July 2011	Indefinite	$	30	$	-

1These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

2At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers’ guarantee to the DOE and CMS Energy’s 1994 guarantee of non-recourse revenue bonds issued by Genesee.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. The current carrying value of these indemnity obligations is less than $1 million. CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

Michigan Sales and Use Tax Litigation: In 2010, the Michigan Department of Treasury finalized a sales and use tax audit of Consumers for the period from October 1997 to December 2004. It determined that Consumers’ electric and natural gas distribution equipment was not eligible for an industrial-processing exemption and therefore was subject to the use tax. Consumers paid the tax for the period from 1997 through 2004 and filed a claim in the Michigan Court of Claims disputing the tax determination. Consumers has continued to apply the industrial-processing exemption for the years subsequent to 2004.

In December 2015, Consumers and the Michigan Department of Treasury reached a settlement agreement under which the Michigan Department of Treasury will refund to Consumers the majority of use tax that Consumers paid on electric distribution equipment for the period from October 1997 through December 2004. Accordingly, Consumers will receive $37 million, which comprises a $19 million refund of taxes paid, a $12 million refund of interest paid, and $6 million of interest owed to Consumers. Consumers recognized the effects of this settlement agreement in its consolidated financial statements in December 2015.

The parties continue to meet to reach agreement on a reasonable method of apportionment relating to Consumers’ natural gas system for the period from October 1997 to December 2004 and to Consumers’ electric and natural gas distribution equipment for the period from January 2005 to December 2014.

Other: In addition to the matters disclosed in this Note and Note 2, Regulatory Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies arising in

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the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits and proceedings may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters. Further, CMS Energy and Consumers occasionally self-report certain regulatory non-compliance matters that may or may not eventually result in administrative proceedings. CMS Energy and Consumers believe that the outcome of any one of these proceedings will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

4:FINANCINGS AND CAPITALIZATION

Term Loan: In April 2016, CMS Energy reached an agreement to extend the maturity date of its $180 million term loan by one year, through April 2018.

Revolving Credit Facilities: The following secured revolving credit facilities with banks were available at March 31, 2016:

							In Millions
					Letters of Credit
Expiration Date	Amount of Facility		Amount Borrowed		Outstanding		Amount Available
CMS Energy parent
May 27, 20201	$	550	$	-	$	1	$	549
Consumers
May 27, 20202	$	650	$	-	$	7	$	643
November 23, 20172	250		-		-		250
May 9, 20182	30		-		30		-

1During the three months ended March 31, 2016, CMS Energy’s average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent. Obligations under this facility are secured by Consumers common stock.

2Obligations under this facility are secured by first mortgage bonds of Consumers.

Short-term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, commercial paper notes with maturities of up to 365 days and that bear interest at fixed or floating rates. These issuances are supported by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the revolver’s available capacity, Consumers would not issue commercial paper in an amount exceeding the available revolver capacity. At March 31, 2016, no commercial paper notes were outstanding under this program.

Dividend Restrictions: At March 31, 2016, payment of dividends by CMS Energy on its common stock was limited to $4.1 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at March 31, 2016, Consumers had $902 million of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy. Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings. Several decisions from FERC suggest that under a variety of circumstances dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings. Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

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For the three months ended March 31, 2016, Consumers paid $155 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In April 2015, CMS Energy entered into an updated continuous equity offering program permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $100 million. Presented in the following table are the transactions that CMS Energy entered into under the program:

	Number of	Average		Proceeds
	Shares Issued	Price per Share		(In Millions)
April – July 2015	888,610	$	33.76	$	30
March 2016	1,449,171	41.40		60
Total	2,337,781	$	38.50	$	90

5:FAIR VALUE MEASUREMENTS

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market. The three levels of the fair value hierarchy are as follows:

·Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

·Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

·Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

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Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

					In Millions
	CMS Energy, including Consumers				Consumers
	March 31		December 31		March 31		December 31
	2016		2015		2016		2015
Assets1
Cash equivalents	$	85	$	158	$	-	$	-
Restricted cash equivalents	28		19		28		19
CMS Energy common stock	-		-		34		29
Nonqualified deferred compensation plan assets	10		10		7		7
DB SERP
Cash equivalents	1		2		1		2
Mutual funds	145		146		104		104
Derivative instruments
Commodity contracts	1		1		1		1
Total	$	270	$	336	$	175	$	162
Liabilities1
Nonqualified deferred compensation plan liabilities	$	10	$	10	$	7	$	7
Total	$	10	$	10	$	7	$	7

1All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using daily quoted NAVs. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect what is owed to the plan participants in accordance with their investment elections. CMS Energy and Consumers report the assets in other non-current assets and the liabilities in other non-current liabilities on their consolidated balance sheets.

DB SERP Assets: The DB SERP cash equivalents consist of a money market fund with daily liquidity. The DB SERP invests in mutual funds that hold primarily fixed-income instruments of varying maturities. In order to meet their investment objectives, the funds hold investment-grade debt securities and may invest a portion of their assets in high-yield securities, foreign debt, and derivative instruments. CMS Energy and Consumers value these funds using daily quoted NAVs. CMS Energy and Consumers report their DB SERP assets in other non-current assets on their consolidated balance sheets. For additional details about DB SERP securities, see Note 6, Financial Instruments.

Derivative Instruments: CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount. CMS Energy’s and Consumers’ derivatives are classified as Level 3.

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The majority of these derivatives are FTRs held by Consumers. Consumers uses FTRs to manage price risk related to electricity transmission congestion. An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges. Under regulatory accounting, all changes in fair value associated with FTRs are deferred as regulatory assets and liabilities until the instruments are settled. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements.

6:    FINANCIAL INSTRUMENTS

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value. The table does not include information on cash, cash equivalents, short-term accounts and notes receivable, short-term investments, and current liabilities since the carrying amounts of these items approximate their fair values because of their short-term nature. For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

																	In Millions
	March 31, 2016										December 31, 2015
			Fair Value										Fair Value
	Carrying				Level						Carrying				Level
	Amount		Total		1		2		3		Amount		Total		1		2		3
CMS Energy, including Consumers
Securities held to maturity	$	13	$	13	$	-	$	13	$	-	$	11	$	11	$	-	$	11	$	-
Long-term payable1	14		15		-		-		15		14		14		-		-		14
Notes receivable2	1,175		1,256		-		-		1,256		1,161		1,228		-		-		1,228
Long-term debt3	9,099		9,841		-		8,856		985		9,084		9,599		-		8,648		951
Consumers
Long-term debt4	$	5,382	$	5,853	$	-	$	4,868	$	985	$	5,381	$	5,684	$	-	$	4,733	$	951

1Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

2Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

3Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

4Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

Notes receivable consist of EnerBank’s fixed-rate installment loans. EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available. In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for

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similarly rated debt. Depending on the information available, other valuation techniques and models may be used that rely on assumptions that cannot be observed or confirmed through market transactions.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt. At March 31, 2016 and December 31, 2015, CMS Energy’s long-term debt included $103 million principal amount that was supported by third-party credit enhancements. This entire principal amount was at Consumers.

Presented in the following table are CMS Energy’s and Consumers’ investment securities classified as available for sale or held to maturity:

													In Millions
	March 31, 2016								December 31, 2015
			Unrealized		Unrealized		Fair				Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value		Cost		Gains		Losses		Value
CMS Energy, including Consumers
Available for sale
DB SERP
Mutual funds	$	152	$	-	$	7	$	145	$	152	$	-	$	6	$	146
Held to maturity
Debt securities	13		-		-		13		11		-		-		11
Consumers
Available for sale
DB SERP
Mutual funds	$	109	$	-	$	5	$	104	$	108	$	-	$	4	$	104
CMS Energy common stock	4		30		-		34		4		25		-		29

The mutual funds classified as available for sale hold primarily fixed-income instruments of varying maturities. Debt securities classified as held to maturity consist primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.

7:NOTES RECEIVABLE

Presented in the following table are details of CMS Energy’s current and non-current notes receivable:

			In Millions
	March 31, 2016		December 31, 2015
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses	$	135	$	128
EnerBank notes receivable held for sale	16		16
Non-current
EnerBank notes receivable	1,024		1,017
Total notes receivable	$	1,175	$	1,161

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements. EnerBank records its notes receivable at cost, less allowance for loan losses. At March 31, 2016, $16 million of notes receivable were classified as held for sale; the fair value of notes receivable held for sale exceeded their carrying value. These notes are expected to be sold in 2016.

Authorized contractors pay fees to EnerBank to provide borrowers with same-as-cash, zero interest, or reduced interest loans. Unearned income associated with the loan fees, which is recorded as a reduction to

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notes receivable on CMS Energy’s consolidated balance sheets, was $83 million at March 31, 2016 and $82 million at December 31, 2015.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses. The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries. Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors. Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent consumer loans was $8 million at March 31, 2016 and at December 31, 2015.

At March 31, 2016 and December 31, 2015, $1 million of EnerBank’s loans had been modified as troubled debt restructurings.

8:RETIREMENT BENEFITS

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In January 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. Historically, the discount rate used for this purpose represented a single weighted-average rate derived from the yield curve used to determine the benefit obligation. CMS Energy and Consumers have elected to use instead a full-yield-curve approach in the estimation of service cost and interest expense; this approach is more accurate in that it applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment. For the three months ended March 31, 2016, the service cost and interest expense components of net periodic benefit costs were reduced by $6 million for the DB Pension Plan and by $3 million for the OPEB Plan for both CMS Energy and Consumers as a result of changing to the full-yield-curve approach to determine the discount rate.

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Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

							In Millions
	DB Pension Plan						OPEB Plan
Three Months Ended March 31	2016			2015			2016			2015
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost	$	11		$	12		$	5		$	6
Interest expense	21			25			12			15
Expected return on plan assets	(37		)	(34		)	(22		)	(23		)
Amortization of:
Net loss	17			23			5			5
Prior service cost (credit)	1			-			(10		)	(10		)
Net periodic cost (credit)	$	13		$	26		$	(10	)	$	(7	)
Consumers
Net periodic cost (credit)
Service cost	$	10		$	12		$	4		$	6
Interest expense	21			25			11			14
Expected return on plan assets	(36		)	(33		)	(20		)	(22		)
Amortization of:
Net loss	17			22			6			6
Prior service cost (credit)	1			-			(10		)	(10		)
Net periodic cost (credit)	$	13		$	26		$	(9	)	$	(6	)

9: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:

Three Months Ended March 31	2016		2015
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	4.1		4.8
Accelerated flow-through of regulatory tax benefits	(4.7	)	(4.9	)
Employee share-based awards1	(2.2	)	-
Other, net	(1.1	)	(1.8	)
Effective tax rate	31.1	%	33.1	%
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	4.4		4.7
Accelerated flow-through of regulatory tax benefits	(4.2	)	(4.4	)
Employee share-based awards1	(2.0	)	-
Other, net	(0.9	)	(1.5	)
Effective tax rate	32.3	%	33.8	%

1CMS Energy and Consumers elected to adopt ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, as of January 1, 2016. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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10:EARNINGS PER SHARE—CMS ENERGY

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on net income:

In Millions, Except Per Share Amounts
Three Months Ended March 31	2016		2015
Income available to common stockholders
Net income available to common stockholders – basic and diluted	$	164	$	202
Average common shares outstanding
Weighted-average shares – basic	276.7		274.8
Add dilutive nonvested stock awards	1.2		0.9
Weighted-average shares – diluted	277.9		275.7
Net income per average common share available to common stockholders
Basic	$	0.59	$	0.73
Diluted	0.59		0.73

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non-participating securities. The participating securities accrue cash dividends when common stockholders receive dividends. Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS. The non-participating securities accrue stock dividends that vest concurrently with the stock award. If the recipient forfeits the award, the stock dividends accrued on the non-participating securities are also forfeited. Accordingly, the non-participating awards and stock dividends were included in the computation of diluted EPS, but not basic EPS.

11:REPORTABLE SEGMENTS

Reportable segments consist of business units defined by the products and services they offer. CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

CMS Energy

The reportable segments for CMS Energy are:

·electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

·gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

·enterprises, consisting of various subsidiaries engaging primarily in domestic independent power production

CMS Energy presents EnerBank and corporate interest and other expenses within other reconciling items.

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Consumers

The reportable segments for Consumers are:

·electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

·gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by reportable segment:

	In Millions
Three Months Ended March 31	2016			2015
CMS Energy, including Consumers
Operating revenue
Electric utility	$	1,013		$	1,033
Gas utility	710			995
Enterprises	48			60
Other reconciling items	30			23
Total operating revenue – CMS Energy	$	1,801		$	2,111
Consumers
Operating revenue
Electric utility	$	1,013		$	1,033
Gas utility	710			995
Total operating revenue – Consumers	$	1,723		$	2,028
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility	$	91		$	94
Gas utility	81			121
Enterprises	6			7
Other reconciling items	(14		)	(20		)
Total net income available to common stockholders – CMS Energy	$	164		$	202
Consumers
Net income available to common stockholder
Electric utility	$	91		$	94
Gas utility	81			121
Total net income available to common stockholder – Consumers	$	172		$	215

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			In Millions
	March 31, 2016		December 31, 2015
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility1	$	13,331	$	13,059
Gas utility1	5,819		5,723
Enterprises	159		120
Other reconciling items	25		41
Total plant, property, and equipment, gross – CMS Energy	$	19,334	$	18,943
Consumers
Plant, property, and equipment, gross
Electric utility1	$	13,331	$	13,059
Gas utility1	5,819		5,723
Other reconciling items	15		15
Total plant, property, and equipment, gross – Consumers	$	19,165	$	18,797
CMS Energy, including Consumers
Total assets
Electric utility1	$	12,743	$	12,660
Gas utility1	5,624		5,912
Enterprises	261		270
Other reconciling items	1,409		1,457
Total assets – CMS Energy2	$	20,037	$	20,299
Consumers
Total assets
Electric utility1	$	12,744	$	12,660
Gas utility1	5,624		5,912
Other reconciling items	54		63
Total assets – Consumers2	$	18,422	$	18,635

1Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

2CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of financial condition and results of operations for CMS Energy and Consumers is contained in Part I—Item 1. Financial Statements—MD&A, which is incorporated by reference herein.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to market risk as previously disclosed in Part II—Item 7A. Quantitative and Qualitative Disclosures About Market Risk, in the 2015 Form 10-K.

Item 4. Controls and Procedures

CMS ENERGY

Disclosure Controls and Procedures: CMS Energy’s management, with the participation of its CEO and CFO, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, CMS Energy’s CEO and CFO have concluded that, as of the end of such period, its disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have not been any changes in CMS Energy’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

CONSUMERS

Disclosure Controls and Procedures: Consumers’ management, with the participation of its CEO and CFO, has evaluated the effectiveness of its disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, Consumers’ CEO and CFO have concluded that, as of the end of such period, its disclosure controls and procedures are effective.

Internal Control Over Financial Reporting: There have not been any changes in Consumers’ internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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Part II—Other Information

Item 1. Legal Proceedings

CMS Energy, Consumers, and certain of their affiliates are parties to various lawsuits and regulatory matters in the ordinary course of business. For information regarding material legal proceedings, including updates to information reported under Part I—Item 3. Legal Proceedings, of the 2015 Form 10-K, see Part I—Item 1. Financial Statements—Notes to the Unaudited Consolidated Financial Statements—Note 2, Regulatory Matters and Note 3, Contingencies and Commitments.

Item 1A. Risk Factors

There have been no material changes to the Risk Factors as previously disclosed in Part I—Item 1A. Risk Factors, in the 2015 Form 10-K, which Risk Factors are incorporated herein by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

UNREGISTERED SALES OF EQUITY SECURITIES

None.

ISSUER REPURCHASES OF EQUITY SECURITIES

Presented in the following table are CMS Energy’s repurchases of equity securities for the three months ended March 31, 2016:

			Total Number of	Maximum Number of
			Shares Purchased as	Shares That May Yet Be
	Total Number	Average	Part of Publicly	Purchased Under Publicly
	of Shares	Price Paid	Announced Plans or	Announced Plans or
Period	Purchased1	per Share	Programs	Programs
January 1, 2016 to
January 31, 2016	268,378	$  36.55	-	-
February 1, 2016 to
February 29, 2016	459	39.19	-	-
March 1, 2016 to
March 31, 2016	728	40.99	-	-
Total	269,565	$  36.57	-	-

1All of the common shares were repurchased to satisfy the minimum statutory income tax withholding obligation for common shares that have vested under the Performance Incentive Stock Plan. The value of shares repurchased is based on the market price on the vesting date.

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Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On April 25, 2016, CMS Energy and JPMorgan Chase Bank, N A., in its capacity as agent (the “Agent”) for itself and the other financial institutions (the “Banks”) named in the $180 million unsecured Term Loan Credit Agreement dated June 11, 2015 between CMS Energy, the Banks and the Agent (the “Agreement”), agreed to extend the maturity date of the term loans made thereunder. The Agreement was previously filed as Exhibit 10.1 to the Form 8-K filed June 16, 2015 and is incorporated herein by reference. Subject to the terms of the Agreement, effective as of April 25, 2016, the maturity date will extend for a period of one year to April 25, 2018.

The Banks have provided banking and underwriting services to CMS Energy in the ordinary course of business.

Item 6. Exhibits

See CMS Energy’s and Consumers’ Exhibit Index included as the last part of this report, which is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiary.

		CMS ENERGY CORPORATION
Dated: April 28, 2016	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer
		CONSUMERS ENERGY COMPANY
Dated: April 28, 2016	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

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EXHIBITS

CMS ENERGY’S AND CONSUMERS’ EXHIBIT INDEX

The agreements included as exhibits to this Form 10-Q filing are included solely to provide information regarding the terms of the agreements and are not intended to provide any other factual or disclosure information about CMS Energy, Consumers, or other parties to the agreements. The agreements may contain representations and warranties made by each of the parties to each of the agreements that were made exclusively for the benefit of the parties involved in each of the agreements and should not be treated as statements of fact. The representations and warranties were made as a way to allocate risk if one or more of those statements prove to be incorrect. The statements were qualified by disclosures of the parties to each of the agreements that may not be reflected in each of the agreements. The agreements may apply standards of materiality that are different than standards applied to other investors. Additionally, the statements were made as of the date of the agreements or as specified in the agreements and have not been updated. The representations and warranties may not describe the actual state of affairs of the parties to each agreement.

Additional information about CMS Energy and Consumers may be found in this filing, at www.cmsenergy.com, at www.consumersenergy.com, and through the SEC’s website at www.sec.gov.

Exhibits		Description
3.11	—	CMS Energy Amended and Restated Bylaws, amended and restated effective February 8, 2016 (Exhibit 3.2 to Form 8-K filed February 8, 2016 and incorporated herein by reference)
10.12	—	Amendment to the CMS Energy Deferred Salary Savings Plan effective January 1, 2016 (Exhibit 10.1 to Form 10-Q for the quarterly period ended September 30, 2015 and incorporated herein by reference)
10.22	—	Amendment to the Defined Contribution Supplemental Executive Retirement Plan effective January 1, 2016 (Exhibit 10.7.a to Form 10-K for the fiscal year ended December 31, 2015 and incorporated herein by reference)
10.31	—	Description of the $180,000,000 Term Loan Credit Agreement Extension
12.1	—	Statement regarding computation of CMS Energy’s Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
12.2	—	Statement regarding computation of Consumers’ Ratios of Earnings to Fixed Charges and Combined Fixed Charges and Preferred Dividends
31.1	—	CMS Energy’s certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	—	CMS Energy’s certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	—	Consumers’ certification of the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.4	—	Consumers’ certification of the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	—	CMS Energy’s certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	—	Consumers’ certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS3	—	XBRL Instance Document
101.SCH3	—	XBRL Taxonomy Extension Schema
101.CAL3	—	XBRL Taxonomy Extension Calculation Linkbase
101.DEF3	—	XBRL Taxonomy Extension Definition Linkbase
101.LAB3	—	XBRL Taxonomy Extension Labels Linkbase
101.PRE3	—	XBRL Taxonomy Extension Presentation Linkbase

1Obligations of CMS Energy or its subsidiaries, but not of Consumers.

2Management contract or compensatory plan or arrangement.

3The financial information contained in the XBRL-related information is “unaudited” and “unreviewed.”

EX-10.3

Exhibit 10.3

Description of the $180,000,000 Term Loan Credit Agreement Extension

April 25, 2016

Pursuant to the terms of the $180,000,000 Term Loan Credit Agreement, dated as of June 11, 2015, among CMS Energy Corporation, the financial institutions named therein and JPMorgan Chase Bank, N.A., as Agent, the parties have all agreed, effective April 25, 2016,  to extend the Maturity Date for a period of one year to April 25, 2018.

EX-12.1

Exhibit 12.1

CMS Energy Corporation

Ratios of Earnings to Fixed Charges
and Combined Fixed Charges and Preferred Dividends

	In Millions, Except Ratios
	Three Months
	Ended		Year Ended December 31
	March 31, 2016		2015			2014			2013			2012			2011
Earnings as defined1
Pretax income from continuing operations	$	238	$	796		$	729		$	756		$	622		$	606
Exclude equity basis subsidiaries	-		(2		)	(1		)	(2		)	(7		)	(1		)
Fixed charges as defined2	112		421			432			423			414			437
Earnings as defined2	$	350	$	1,215		$	1,160		$	1,177		$	1,029		$	1,042
Fixed charges as defined1
Interest on long-term debt	$	100	$	386		$	393		$	385		$	372		$	396
Estimated interest portion of lease rental	5		21			21			21			21			18
Other interest charges	7		16			19			18			23			25
Fixed charges as defined2	112		423			433			424			416			439
Preferred dividends	-		-			-			-			-			-
Combined fixed charges and preferred dividends	$	112	$	423		$	433		$	424		$	416		$	439
Ratio of earnings to fixed charges	3.13		2.87			2.68			2.78			2.47			2.37
Ratio of earnings to combined fixed charges and preferred dividends	3.13		2.87			2.68			2.78			2.47			2.37

1Earnings and fixed charges as defined in instructions for Item 503 of Regulation S-K.

2Preferred dividends of a consolidated subsidiary are included in fixed charges, but excluded from earnings as defined because the amount was not deducted in arriving at pretax income from continuing operations.

EX-12.2

Exhibit 12.2

Consumers Energy Company

Ratios of Earnings to Fixed Charges
and Combined Fixed Charges and Preferred Dividends

	In Millions, Except Ratios
	Three Months
	Ended		Year Ended December 31
	March 31, 2016		2015		2014		2013		2012		2011
Earnings as defined1
Pretax income from continuing operations	$	254	$	896	$	873	$	880	$	736	$	734
Exclude equity basis subsidiaries	-		-		-		-		-		-
Fixed charges as defined	73		275		274		269		269		287
Earnings as defined	$	327	$	1,171	$	1,147	$	1,149	$	1,005	$	1,021
Fixed charges as defined1
Interest on long-term debt	$	65	$	252	$	243	$	237	$	232	$	251
Estimated interest portion of lease rental	5		21		21		21		21		18
Other interest charges	3		2		10		11		16		18
Fixed charges as defined	73		275		274		269		269		287
Preferred dividends	-		3		3		3		3		3
Combined fixed charges and preferred dividends	$	73	$	278	$	277	$	272	$	272	$	290
Ratio of earnings to fixed charges	4.48		4.26		4.19		4.27		3.74		3.56
Ratio of earnings to combined fixed charges and preferred dividends	4.48		4.21		4.14		4.22		3.69		3.52

1Earnings and fixed charges as defined in instructions for Item 503 of Regulation S-K.

EX-31.1

Exhibit 31.1

CERTIFICATION OF JOHN G. RUSSELL

I, John G. Russell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CMS Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2016	By:	/s/ John Russell
		John G. Russell
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THOMAS J. WEBB

I, Thomas J. Webb, certify that:

1.I have reviewed this quarterly report on Form 10-Q of CMS Energy Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2016	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION OF JOHN G. RUSSELL

I, John G. Russell, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Consumers Energy Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2016	By:	/s/ John Russell
		John G. Russell
		President and Chief Executive Officer

EX-31.4

Exhibit 31.4

CERTIFICATION OF THOMAS J. WEBB

I, Thomas J. Webb, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Consumers Energy Company;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: April 28, 2016	By:	/s/ Thomas J. Webb
		Thomas J. Webb
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of CMS Energy Corporation (the “Company”) for the quarterly period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John G. Russell, as President and Chief Executive Officer of the Company, and Thomas J. Webb, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John Russell
Name:	John G. Russell
Title:	President and Chief Executive Officer
Date:	April 28, 2016
/s/ Thomas J. Webb
Name:	Thomas J. Webb
Title:	Executive Vice President and Chief Financial Officer
Date:	April 28, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION OF CEO AND CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Consumers Energy Company (the “Company”) for the quarterly period ended March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), John G. Russell, as President and Chief Executive Officer of the Company, and Thomas J. Webb, as Executive Vice President and Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John Russell
Name:	John G. Russell
Title:	President and Chief Executive Officer
Date:	April 28, 2016
/s/ Thomas J. Webb
Name:	Thomas J. Webb
Title:	Executive Vice President and Chief Financial Officer
Date:	April 28, 2016

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2016	Apr. 11, 2016
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2016
Trading Symbol	cms
Entity Registrant Name	CMS Energy Corporation
Entity Central Index Key	0000811156
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
CMS Energy [Member]
Entity Common Stock, Shares Outstanding		279,961,710
Consumers Energy Company [Member]
Entity Registrant Name	Consumers Energy Company
Entity Central Index Key	0000201533
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		84,108,789

XML

Consolidated Statements Of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Revenue	$ 1,801	$ 2,111
Operating Expenses
Fuel for electric generation	125	167
Purchased and interchange power	346	349
Purchased power - related parties	22	23
Cost of gas sold	354	589
Maintenance and other operating expenses	293	283
Depreciation and amortization	238	222
General taxes	87	81
Total operating expenses	1,465	1,714
Operating Income	336	397
Other Income (Expense)
Interest income	1	1
Allowance for equity funds used during construction	3	2
Income from equity method investees	4	4
Other income	3	3
Other expense	(3)	(4)
Total other income (expense)	8	6
Interest Charges
Interest on long-term debt	100	96
Other interest expense	7	6
Allowance for borrowed funds used during construction	(1)	(1)
Total interest charges	106	101
Income Before Income Taxes	238	302
Income Tax Expense	74	100
Net Income	$ 164	$ 202
Basic Earnings Per Average Common Share	$ 0.59	$ 0.73
Diluted Earnings Per Average Common Share	0.59	0.73
Dividends declared per common share	$ 0.31	$ 0.29
Consumers Energy Company [Member]
Operating Revenue	$ 1,723	$ 2,028
Operating Expenses
Fuel for electric generation	99	133
Purchased and interchange power	343	346
Purchased power - related parties	22	23
Cost of gas sold	351	583
Maintenance and other operating expenses	269	265
Depreciation and amortization	237	220
General taxes	85	79
Total operating expenses	1,406	1,649
Operating Income	317	379
Other Income (Expense)
Interest income	1	1
Allowance for equity funds used during construction	3	2
Other income	3	12
Other expense	(3)	(4)
Total other income (expense)	4	11
Interest Charges
Interest on long-term debt	65	63
Other interest expense	3	3
Allowance for borrowed funds used during construction	(1)	(1)
Total interest charges	67	65
Income Before Income Taxes	254	325
Income Tax Expense	82	110
Net Income	$ 172	$ 215

XML

Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 164	$ 202
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax		1
Investments
Other Comprehensive Income (Loss)		1
Comprehensive Income Attributable to CMS Energy	164	203
Consumers Energy Company [Member]
Net income	172	215
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax		1
Investments
Unrealized gain on investments, net of tax	3
Reclassification adjustments included in net income, net of tax		(5)
Other Comprehensive Income (Loss)	3	(4)
Comprehensive Income Attributable to CMS Energy	$ 175	$ 211

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Amortization of net actuarial loss, tax		$ 1
Consumers Energy Company [Member]
Amortization of net actuarial loss, tax
Unrealized gain (loss) on investments, tax expense (tax benefit)	$ 2
Reclassification adjustments included in net income, tax		$ (3)

XML

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows from Operating Activities
Net income	$ 164	$ 202
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	238	222
Deferred income taxes and investment tax credit	68	99
Other non-cash operating activities	21	42
Cash provided by (used in) changes in assets and liabilities
Decrease (increase) in accounts receivable, notes receivable, and accrued revenue	16	(48)
Decrease (increase) in inventories	274	378
Increase (decrease) in accounts payable and accrued refunds	(48)	(36)
Other current and non-current assets and liabilities	(101)	(99)
Net cash provided by operating activities	632	760
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)	(407)	(348)
Increase in EnerBank notes receivable	(16)	(29)
Other investing activities	(28)	(45)
Net cash used in investing activities	(451)	(422)
Cash Flows from Financing Activities
Proceeds from issuance of debt	30	100
Proceeds from EnerBank certificates of deposit, net	14	40
Issuance of common stock	63	4
Retirement of long-term debt	(30)	(11)
Payment of dividends on common stock	(86)	(80)
Decrease in notes payable	(249)	(60)
Payment of capital lease obligations and other financing costs	(12)	(16)
Net cash used in financing activities	(270)	(23)
Net Increase (Decrease) in Cash and Cash Equivalents	(89)	315
Cash and Cash Equivalents, Beginning of Period	266	207
Cash and Cash Equivalents, End of Period	177	522
Non-Cash Transactions
Capital expenditures not paid	173	117
Consumers Energy Company [Member]
Cash Flows from Operating Activities
Net income	172	215
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	237	220
Deferred income taxes and investment tax credit	62	39
Other non-cash operating activities	17	40
Cash provided by (used in) changes in assets and liabilities
Decrease (increase) in accounts receivable, notes receivable, and accrued revenue	33	(43)
Decrease (increase) in inventories	270	374
Increase (decrease) in accounts payable and accrued refunds	(42)	(32)
Other current and non-current assets and liabilities	(84)	(27)
Net cash provided by operating activities	665	786
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under capital lease)	(406)	(345)
Other investing activities	(27)	(38)
Net cash used in investing activities	(433)	(383)
Cash Flows from Financing Activities
Retirement of long-term debt		(11)
Payment of dividends on common stock	(155)	(122)
Stockholder contribution	150	150
Decrease in notes payable	(249)	(60)
Payment of capital lease obligations and other financing costs	(1)	(6)
Net cash used in financing activities	(255)	(49)
Net Increase (Decrease) in Cash and Cash Equivalents	(23)	354
Cash and Cash Equivalents, Beginning of Period	50	71
Cash and Cash Equivalents, End of Period	27	425
Non-Cash Transactions
Capital expenditures not paid	$ 154	$ 117

XML

Consolidated Balance Sheets - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Current Assets
Cash and cash equivalents		$ 177	$ 266
Restricted cash and cash equivalents		28	19
Accounts receivable and accrued revenue, less allowances		730	774
Notes receivable, less allowances		135	128
Notes receivable held for sale		16	16
Accounts receivable - related parties		11	11
Inventories at average cost
Gas in underground storage		314	568
Materials and supplies		120	126
Generating plant fuel stock		64	84
Deferred property taxes		193	235
Regulatory assets		11	16
Prepayments and other current assets		91	77
Total current assets		1,890	2,320
Plant, Property, and Equipment
Plant, property, and equipment, gross		19,334	18,943
Less accumulated depreciation and amortization		5,878	5,747
Plant, property, and equipment, net		13,456	13,196
Construction work in progress		1,451	1,509
Total plant, property, and equipment		14,907	14,705
Other Non-current Assets
Regulatory assets		1,827	1,840
Accounts and notes receivable		1,034	1,027
Investments		64	64
Other		315	343
Total other non-current assets		3,240	3,274
Total Assets	[1]	20,037	20,299
Current Liabilities
Current portion of long-term debt, capital leases, and financing obligation		950	706
Notes payable			249
Accounts payable		534	633
Accounts payable - related parties		9	9
Accrued rate refunds		34	26
Accrued interest		72	106
Accrued taxes		254	349
Regulatory liabilities		76	82
Other current liabilities		118	142
Total current liabilities		2,047	2,302
Non-current Liabilities
Long-term debt		8,170	8,400
Non-current portion of capital leases and financing obligation		114	118
Regulatory liabilities		2,092	2,088
Postretirement benefits		581	591
Asset retirement obligations		440	439
Deferred investment tax credit		55	56
Deferred income taxes		2,078	2,017
Other non-current liabilities		314	313
Total non-current liabilities		$ 13,844	$ 14,022
Commitments and Contingencies (Notes 2 and 3)
Common stockholder's equity
Common stock		$ 3	$ 3
Other paid-in capital		4,897	4,837
Accumulated other comprehensive loss		(47)	(47)
Retained earnings (Accumulated deficit)		(744)	(855)
Total common stockholders' equity		4,109	3,938
Noncontrolling interests		37	37
Total equity		4,146	3,975
Total Liabilities and Equity		20,037	20,299
Consumers Energy Company [Member]
Current Assets
Cash and cash equivalents		27	50
Restricted cash and cash equivalents		28	19
Accounts receivable and accrued revenue, less allowances		713	758
Accounts receivable - related parties		1	17
Inventories at average cost
Gas in underground storage		314	568
Materials and supplies		115	120
Generating plant fuel stock		63	80
Deferred property taxes		193	235
Regulatory assets		11	16
Prepayments and other current assets		84	66
Total current assets		1,549	1,929
Plant, Property, and Equipment
Plant, property, and equipment, gross		19,165	18,797
Less accumulated depreciation and amortization		5,821	5,676
Plant, property, and equipment, net		13,344	13,121
Construction work in progress		1,449	1,467
Total plant, property, and equipment		14,793	14,588
Other Non-current Assets
Regulatory assets		1,827	1,840
Accounts and notes receivable		10	10
Investments		34	29
Other		209	239
Total other non-current assets		2,080	2,118
Total Assets	[1]	18,422	18,635
Current Liabilities
Current portion of long-term debt, capital leases, and financing obligation		469	220
Notes payable			249
Accounts payable		521	613
Accounts payable - related parties		15	15
Accrued rate refunds		34	26
Accrued interest		47	65
Accrued taxes		262	352
Regulatory liabilities		76	82
Other current liabilities		87	109
Total current liabilities		1,511	1,731
Non-current Liabilities
Long-term debt		4,934	5,183
Non-current portion of capital leases and financing obligation		114	118
Regulatory liabilities		2,092	2,088
Postretirement benefits		519	529
Asset retirement obligations		439	438
Deferred investment tax credit		55	56
Deferred income taxes		2,799	2,710
Other non-current liabilities		243	236
Total non-current liabilities		$ 11,195	$ 11,358
Commitments and Contingencies (Notes 2 and 3)
Common stockholder's equity
Common stock		$ 841	$ 841
Other paid-in capital		3,874	3,724
Accumulated other comprehensive loss		(3)	(6)
Retained earnings (Accumulated deficit)		967	950
Total common stockholders' equity		5,679	5,509
Preferred stock		37	37
Total equity		5,716	5,546
Total Liabilities and Equity		$ 18,422	$ 18,635

[1] CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Allowances for doubtful accounts receivable	$ 29	$ 28
Allowances for doubtful notes receivable	$ 10	$ 9
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares outstanding	279,200,000	277,200,000
Consumers Energy Company [Member]
Allowances for doubtful accounts receivable	$ 29	$ 28
Common stock, shares authorized	125,000,000	125,000,000
Common stock, shares outstanding	84,100,000	84,100,000

XML

Consolidated Statements Of Changes In Equity - USD ($) $ in Millions	Consumers Energy Company [Member] CMS Energy Common Stock [Member]	Consumers Energy Company [Member] Other Paid-in Capital [Member]	Consumers Energy Company [Member] Accumulated Other Comprehensive Income (Loss) [Member]	Consumers Energy Company [Member] Retirement Benefits Liability [Member]	Consumers Energy Company [Member] Investments [Member]	Consumers Energy Company [Member] Retained Earnings (Accumulated Deficit) [Member]	Consumers Energy Company [Member] Preferred Stock [Member]	Consumers Energy Company [Member]	CMS Energy Common Stock [Member]	Other Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retirement Benefits Liability [Member]	Investments [Member]	Retained Earnings (Accumulated Deficit) [Member]	Noncontrolling Interest [Member]	Total
Total Equity, beginning at Dec. 31, 2014	$ 841	$ 3,574	$ (7)	$ (26)	$ 19	$ 832	$ 37	$ 5,277	$ 3	$ 4,774	$ (49)	$ (48)	$ (1)	$ (1,058)	$ 37	$ 3,707
Common stock issued										10
Common stock repurchased										(11)
Common stock reissued										10
Stockholder contribution		150
Amortization of net actuarial loss				1				1				1				1
Reclassification adjustments included in net income, net of tax					(5)			5
Net income						215		215						202		202
Dividends declared on common stock						(122)								(80)
Total Equity, end at Mar. 31, 2015	841	3,724	(11)	(25)	14	925	37	$ 5,516	3	4,783	(48)	(47)	(1)	(936)	37	3,839
Common stock issued																$ 90
Number of Shares Issued																2,337,781
End of period, shares at Mar. 31, 2016								84,100,000								279,200,000
Total Equity, end at Mar. 31, 2016	841	3,874	(3)	(19)	16	967	37	$ 5,716	3	4,897	(47)	(43)	(4)	(744)	37	$ 4,146
Total Equity, beginning at Dec. 31, 2015	841	3,724	(6)	$ (19)	13	950	37	$ 5,546	3	4,837	(47)	(43)	(4)	(855)	37	$ 3,975
Beginning of period, shares at Dec. 31, 2015								84,100,000								277,200,000
Common stock issued										70
Common stock repurchased										(10)
Stockholder contribution		150
Amortization of net actuarial loss
Unrealized gain on investments, net of tax					$ 3			$ 3
Reclassification adjustments included in net income, net of tax
Net income						172		$ 172						164		$ 164
Dividends declared on common stock						(155)								(86)
End of period, shares at Mar. 31, 2016								84,100,000								279,200,000
Total Equity, end at Mar. 31, 2016	$ 841	$ 3,874	$ (3)	$ (19)	$ 16	$ 967	$ 37	$ 5,716	$ 3	$ 4,897	$ (47)	$ (43)	$ (4)	(744)	$ 37	$ 4,146
Cumulative effect of change in accounting principle														$ 33

XML

New Accounting Standards

3 Months Ended

Mar. 31, 2016

New Accounting Standards

1:New Accounting Standards

Implementation of New Accounting Standards

ASU 2014‑12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period:This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, addresses stock awards with performance targets that can be met after an employee has completed the required service period. The standard was issued to resolve diversity in practice regarding the accounting treatment for this type of award. Under the new guidance, the probability of the performance target being met should be factored into compensation expense each period. This guidance is consistent with the accounting that CMS Energy and Consumers already applied to awards of this type. Therefore, the standard had no impact on CMS Energy’s or Consumers’ consolidated financial statements.

ASU 2015‑02, Amendments to the Consolidation Analysis: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, provides amended guidance on whether reporting entities should consolidate certain legal entities, including limited partnerships. CMS Energy and Consumers determined that the standard does not change any of their consolidation conclusions or have any impact on their consolidated income, cash flows, or financial position.

ASU 2015‑03, Simplifying the Presentation of Debt Issuance Costs: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Previously, debt issuance costs were reported as an asset.  The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. In accordance with the standard, CMS Energy included $40 million and Consumers included $22 million of unamortized debt issuance costs in long-term debt on their consolidated balance sheets at March 31, 2016. In addition, this standard requires that companies apply the new guidance retrospectively to all prior periods presented. Accordingly, CMS Energy reclassified $41 million and Consumers reclassified$23 million of unamortized debt issuance costs from other non‑current assets to long-term debt on their consolidated balance sheets at December 31, 2015.

ASU 2016‑09, Improvements to Employee Share-Based Payment Accounting: This standard was issued to simplify and improve the accounting for employee share-based payment awards. The standard will be effective on January 1, 2017 for CMS Energy and Consumers, but early adoption is permitted. CMS Energy and Consumers elected to adopt the standard as of January 1, 2016. The standard requires all excess tax benefits and deficiencies that occur upon vesting of employee stock awards to be recognized in net income. Previously, CMS Energy and Consumers did not record excess tax benefits on restricted stock awards in net income but, under this standard, CMS Energy and Consumers recorded $6 million of excess tax benefits in net income for the three months ended March 31, 2016. Also, in accordance with the standard, CMS Energy recorded a $33 million cumulative adjustment to its accumulated deficit at January 1, 2016. This amount represented excess federal tax benefits that CMS Energy had not recognized in prior periods due to the use of tax loss carryforwards. The implementation of this standard had no other material impacts on CMS Energy’s or Consumers’ consolidated financial statements.

New Accounting Standards Not Yet Effective

ASU 2014‑09, Revenue from Contracts with Customers: This standard, which will become effective January 1, 2018 for CMS Energy and Consumers, provides new guidance for recognizing revenue from contracts with customers. A primary objective of the standard is to provide a single, comprehensive revenue recognition model that will be applied across entities, industries, and capital markets. The new guidance will replace most of the existing revenue recognition requirements in GAAP, although certain guidance specific to rate-regulated utilities will be retained. Entities will have the option to apply the standard retrospectively to all prior periods presented, or to apply it retrospectively only to contracts existing at the effective date, with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

ASU 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities: This standard, which will be effective January 1, 2018 for CMS Energy and Consumers, is intended to improve the accounting for financial instruments. The standard will require investments in equity securities to be measured at fair value, with changes in fair value recognized in net income, except for certain investments such as those that qualify for equity-method accounting. The standard will no longer permit unrealized gains and losses for certain equity investments to be recorded in AOCI. CMS Energy and Consumers presently record unrealized gains and losses on certain equity investments, including the mutual funds in the DB SERP and Consumers’ investment in CMS Energy common stock, in AOCI. For further details on these investments, see Note 6, Financial Instruments. Entities will apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. CMS Energy and Consumers are evaluating whether there may be further impacts of the standard on their consolidated financial statements.

ASU 2016‑02, Leases: This standard, which will be effective January 1, 2019 for CMS Energy and Consumers, establishes a new accounting model for leases. The standard will require companies to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which are not recorded on the balance sheet under existing standards. The new guidance will also amend the definition of a lease to require that a lessee control the use of a specified asset, and not simply control or take the output of the asset. On the income statement, leases that meet existing capital lease criteria will generally be accounted for under a financing model, while operating leases will generally be accounted for under a straight-line expense model. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

Consumers Energy Company [Member]

New Accounting Standards

1:New Accounting Standards

Implementation of New Accounting Standards

ASU 2014‑12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period:This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, addresses stock awards with performance targets that can be met after an employee has completed the required service period. The standard was issued to resolve diversity in practice regarding the accounting treatment for this type of award. Under the new guidance, the probability of the performance target being met should be factored into compensation expense each period. This guidance is consistent with the accounting that CMS Energy and Consumers already applied to awards of this type. Therefore, the standard had no impact on CMS Energy’s or Consumers’ consolidated financial statements.

ASU 2015‑02, Amendments to the Consolidation Analysis: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, provides amended guidance on whether reporting entities should consolidate certain legal entities, including limited partnerships. CMS Energy and Consumers determined that the standard does not change any of their consolidation conclusions or have any impact on their consolidated income, cash flows, or financial position.

ASU 2015‑03, Simplifying the Presentation of Debt Issuance Costs: This standard, which was effective on January 1, 2016 for CMS Energy and Consumers, requires that debt issuance costs be presented as a direct deduction from the carrying amount of long-term debt on the balance sheet. Previously, debt issuance costs were reported as an asset.  The new guidance aligns the presentation of debt issuance costs with debt discounts and premiums. In accordance with the standard, CMS Energy included $40 million and Consumers included $22 million of unamortized debt issuance costs in long-term debt on their consolidated balance sheets at March 31, 2016. In addition, this standard requires that companies apply the new guidance retrospectively to all prior periods presented. Accordingly, CMS Energy reclassified $41 million and Consumers reclassified$23 million of unamortized debt issuance costs from other non‑current assets to long-term debt on their consolidated balance sheets at December 31, 2015.

ASU 2016‑09, Improvements to Employee Share-Based Payment Accounting: This standard was issued to simplify and improve the accounting for employee share-based payment awards. The standard will be effective on January 1, 2017 for CMS Energy and Consumers, but early adoption is permitted. CMS Energy and Consumers elected to adopt the standard as of January 1, 2016. The standard requires all excess tax benefits and deficiencies that occur upon vesting of employee stock awards to be recognized in net income. Previously, CMS Energy and Consumers did not record excess tax benefits on restricted stock awards in net income but, under this standard, CMS Energy and Consumers recorded $6 million of excess tax benefits in net income for the three months ended March 31, 2016. Also, in accordance with the standard, CMS Energy recorded a $33 million cumulative adjustment to its accumulated deficit at January 1, 2016. This amount represented excess federal tax benefits that CMS Energy had not recognized in prior periods due to the use of tax loss carryforwards. The implementation of this standard had no other material impacts on CMS Energy’s or Consumers’ consolidated financial statements.

New Accounting Standards Not Yet Effective

ASU 2014‑09, Revenue from Contracts with Customers: This standard, which will become effective January 1, 2018 for CMS Energy and Consumers, provides new guidance for recognizing revenue from contracts with customers. A primary objective of the standard is to provide a single, comprehensive revenue recognition model that will be applied across entities, industries, and capital markets. The new guidance will replace most of the existing revenue recognition requirements in GAAP, although certain guidance specific to rate-regulated utilities will be retained. Entities will have the option to apply the standard retrospectively to all prior periods presented, or to apply it retrospectively only to contracts existing at the effective date, with the cumulative effect of the standard recorded as an adjustment to beginning retained earnings. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

ASU 2016‑01, Recognition and Measurement of Financial Assets and Financial Liabilities: This standard, which will be effective January 1, 2018 for CMS Energy and Consumers, is intended to improve the accounting for financial instruments. The standard will require investments in equity securities to be measured at fair value, with changes in fair value recognized in net income, except for certain investments such as those that qualify for equity-method accounting. The standard will no longer permit unrealized gains and losses for certain equity investments to be recorded in AOCI. CMS Energy and Consumers presently record unrealized gains and losses on certain equity investments, including the mutual funds in the DB SERP and Consumers’ investment in CMS Energy common stock, in AOCI. For further details on these investments, see Note 6, Financial Instruments. Entities will apply the standard using a modified retrospective approach, with a cumulative-effect adjustment recorded to beginning retained earnings on the effective date. CMS Energy and Consumers are evaluating whether there may be further impacts of the standard on their consolidated financial statements.

ASU 2016‑02, Leases: This standard, which will be effective January 1, 2019 for CMS Energy and Consumers, establishes a new accounting model for leases. The standard will require companies to recognize lease assets and liabilities on the balance sheet for all leases with a term of more than one year, including operating leases, which are not recorded on the balance sheet under existing standards. The new guidance will also amend the definition of a lease to require that a lessee control the use of a specified asset, and not simply control or take the output of the asset. On the income statement, leases that meet existing capital lease criteria will generally be accounted for under a financing model, while operating leases will generally be accounted for under a straight-line expense model. CMS Energy and Consumers are evaluating the impact of the standard on their consolidated financial statements.

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Regulatory Matters

3 Months Ended

Mar. 31, 2016

Regulatory Matters

2:Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost allocation among customers, the adequacy of the record evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

Electric Rate Case: In December 2014, Consumers filed an application with the MPSC seeking an annual rate increase of $163 million, based on a 10.7 percent authorized return on equity. In June 2015, Consumers self-implemented an annual rate increase of $110 million, subject to refund with interest. The MPSC issued an order in November 2015, authorizing an annual rate increase of $165 million, based on a 10.3 percent authorized rate of return on equity. In April 2016, upon the retirement of seven coal-fueled electric generating units, the annual rate increase was reduced to $126 million.

In February 2016, Consumers filed a reconciliation of total revenues collected during self-implementation to those that would have collected under final rates. Consumers’ reconciliation indicated that no refund would be required.

Gas Rate Case: In July 2015, Consumers filed an application with the MPSC seeking an annual rate increase of $85 million, based on a 10.7 percent authorized return on equity. In January 2016, Consumers self-implemented an annual rate increase of $60 million, subject to refund with interest. In April 2016, the MPSC approved a settlement agreement authorizing a  $40 millionannual rate increase. Consumers had a  recorded reserve for customer refunds at March 31, 2016 that it believes is adequate.

Energy Optimization Plan Incentive:Consumers will file its 2015 energy optimization reconciliation in 2016, requesting the MPSC’s approval to collect the maximum performance incentive of $18 million from customers for exceeding its statutory savings targets in 2015 and for achieving certain other goals.

Consumers Energy Company [Member]

Regulatory Matters

2:Regulatory Matters

Regulatory matters are critical to Consumers. The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers, such as Consumers’ rate cases and PSCR and GCR processes. These parties often challenge various aspects of those proceedings, including the prudence of Consumers’ policies and practices, and seek cost disallowances and other relief. The parties also have appealed significant MPSC orders. Depending upon the specific issues, the outcomes of rate cases and proceedings, including judicial proceedings challenging MPSC orders or other actions, could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations. Consumers cannot predict the outcome of these proceedings.

There are multiple appeals pending that involve various issues concerning cost allocation among customers, the adequacy of the record evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

Electric Rate Case: In December 2014, Consumers filed an application with the MPSC seeking an annual rate increase of $163 million, based on a 10.7 percent authorized return on equity. In June 2015, Consumers self-implemented an annual rate increase of $110 million, subject to refund with interest. The MPSC issued an order in November 2015, authorizing an annual rate increase of $165 million, based on a 10.3 percent authorized rate of return on equity. In April 2016, upon the retirement of seven coal-fueled electric generating units, the annual rate increase was reduced to $126 million.

In February 2016, Consumers filed a reconciliation of total revenues collected during self-implementation to those that would have collected under final rates. Consumers’ reconciliation indicated that no refund would be required.

Gas Rate Case: In July 2015, Consumers filed an application with the MPSC seeking an annual rate increase of $85 million, based on a 10.7 percent authorized return on equity. In January 2016, Consumers self-implemented an annual rate increase of $60 million, subject to refund with interest. In April 2016, the MPSC approved a settlement agreement authorizing a  $40 millionannual rate increase. Consumers had a  recorded reserve for customer refunds at March 31, 2016 that it believes is adequate.

Energy Optimization Plan Incentive:Consumers will file its 2015 energy optimization reconciliation in 2016, requesting the MPSC’s approval to collect the maximum performance incentive of $18 million from customers for exceeding its statutory savings targets in 2015 and for achieving certain other goals.

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Contingencies And Commitments

3 Months Ended

Mar. 31, 2016

Contingencies And Commitments

3:Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities.  Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made.  Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Gas Index Price Reporting Litigation:CMS Energy, along with CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company, have been named as defendants in four class action lawsuits and one individual lawsuit arising as a result of alleged inaccurate natural gas price reporting to publications that report trade information.  Allegations include price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Kansas, Missouri, and Wisconsin. Plaintiffs are making claims for the following: treble damages, full consideration damages, exemplary damages, costs, interest, and/or attorneys’ fees.

After removal to federal court, all of the cases were transferred to a single federal district court pursuant to the multidistrict litigation process.  In 2010 and 2011, all claims against CMS Energy defendants were dismissed by the district court based on FERC preemption.  Plaintiffs filed appeals in all of the cases.  The issues on appeal were whether the district court erred in dismissing the cases based on FERC preemption and denying the plaintiffs’ motions for leave to amend their complaints to add a federal Sherman Act antitrust claim.  The plaintiffs did not appeal the dismissal of CMS Energy as a defendant in these cases, but other CMS Energy entities remain as defendants.

In 2013, the U.S. Court of Appeals for the Ninth Circuit reversed the district court decision. The appellate court found that FERC preemption does not apply under the facts of these cases.  The appellate court affirmed the district court’s denial of leave to amend to add federal antitrust claims. The matter was appealed to the U.S. Supreme Court, which in 2015 upheld the Ninth Circuit’s decision. The cases have been remanded back to the federal district court.

These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions.  Presently, any estimate of liability would be highly speculative; the amount of CMS Energy’s reasonably possible loss would be based on widely varying models previously untested in this context.  If the outcome after appeals is unfavorable, these cases could negatively affect CMS Energy’s liquidity, financial condition, and results of operations.

Bay Harbor:CMS Land retained environmental remediation obligations for the collection and treatment of leachate, a liquid consisting of water and other substances, at Bay Harbor after selling its interests in the development in 2002.  Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site.  In 2012, CMS Land and the MDEQ finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit issued in 2010.  CMS Land is presently working with the MDEQ to renew this permit, which requires renewal every five years. Until a new permit is issued, CMS Land is authorized to continue operating under the existing permit.

Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters.  CMS Land and other parties have received a demand for payment from the EPA in the amount of $8 million, plus interest.  The EPA is seeking recovery under CERCLA of response costs allegedly incurred at Bay Harbor.  These costs exceed what was agreed to in a 2005 order between CMS Land and the EPA, and CMS Land has communicated to the EPA that it does not believe that this is a valid claim. The EPA has filed a lawsuit to collect these costs.

At March 31, 2016, CMS Energy had a recorded liability of $54 million for its remaining obligations.  CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs.  The undiscounted amount of the remaining obligation is $69 million.  CMS Energy expects to pay the following amounts for long-term liquid disposal and operating and maintenance costs in 2016 and in each of the next four years:

In Millions
	2016			2017			2018			2019			2020
CMS Energy
Long-term liquid disposal and operating and maintenance costs		$	6		$	5		$	4		$	4		$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability.  Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim:In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea.  The government of Equatorial Guinea claims that CMS Energy owes $152 million in taxes, plus significant penalties and interest, in connection with the sale. The matteris proceeding to formal arbitration.  CMS Energy has concluded that the government’s tax claim is without merit and is contesting the claim, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters:Consumers’ operations are subject to environmental laws and regulations.  Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste:Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA.  Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome.  Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $3 million and $5 million.  At March 31, 2016, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA.  CERCLA liability is joint and several.  In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site.  The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site.  In 2011, Consumers received a follow‑up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River.  All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability.  Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million.  Various factors, including the number of potentially responsible parties involved with each site, affect Consumers’ share of the total liability.  At March 31, 2016, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain.  Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB:In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington.  Consumers removed part of the PCB material and replaced it with non‑PCB material.  Consumers has had several communications with the EPA regarding this matter.  Consumers cannot predict the financial impact or outcome of this matter.

Consumers Gas Utility Contingencies

Gas Environmental Matters:Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA.  These sites include 23 former MGP facilities.  Consumers operated the facilities on these sites for some part of their operating lives.  For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At March 31, 2016, Consumers had a recorded liability of $114 million for its remaining obligations for these sites.  This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent.  The undiscounted amount of the remaining obligation is $130 million.  Consumers expects to pay the following amounts for remediation and other response activity costs in 2016 and in each of the next four years:

In Millions
	2016			2017			2018			2019			2020
Consumers
Remediation and other response activity costs		$	15		$	20		$	11		$	14		$	19

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability. At one of the MGP sites, Consumers is evaluating the timing and approach of its remediation strategy, which could result in a change to its cost estimates in 2016.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period.  At March 31, 2016, Consumers had a regulatory asset of $145 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million.  At March 31, 2016, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at March 31, 2016:

In Millions
			Maximum			Carrying
Guarantee Description	Issue Date	Expiration Date	Obligation			Amount
CMS Energy, including Consumers
Indemnity obligations from asset sales    and other agreements1	Various	Indefinite		$	153		$	7
Guarantees2	Various	Indefinite			49			-
Consumers
Gurarantee2	July 2011	Indefinite		$	30		$	-

¹ These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

² At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers’ guarantee to the DOE and CMS Energy’s 1994 guarantee of non-recourse revenue bonds issued by Genesee.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. The current carrying value of these indemnity obligations is less than $1 million.  CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

Michigan Sales and Use Tax Litigation: In 2010, the Michigan Department of Treasury finalized a sales and use tax audit of Consumers for the period from October 1997 to December 2004. It determined that Consumers’ electric and natural gas distribution equipment was not eligible for an industrial-processing exemption and therefore was subject to the use tax. Consumers paid the tax for the period from 1997 through 2004 and filed a claim in the Michigan Court of Claims disputing the tax determination. Consumers has continued to apply the industrial-processing exemption for the years subsequent to 2004.

In December 2015, Consumers and the Michigan Department of Treasury reached a settlement agreement under which the Michigan Department of Treasury will refund to Consumers the majority of use tax that Consumers paid on electric distribution equipment for the period from October 1997 through December 2004. Accordingly, Consumers will receive $37 million, which comprises a $19 million refund of taxes paid, a $12 million refund of interest paid, and $6 million of interest owed to Consumers. Consumers recognized the effects of this settlement agreement in its consolidated financial statements in December 2015.

The parties continue to meet to reach agreement on a reasonable method of apportionment relating to Consumers’ natural gas system for the period from October 1997 to December 2004 and to Consumers’ electric and natural gas distribution equipment for the period from January 2005 to December 2014.

Other:In addition to the matters disclosed in this Note and Note 2, Regulatory Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties.  These other lawsuits and proceedings may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters.  Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings.  CMS Energy and Consumers believe that the outcome of any one of these proceedings will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Consumers Energy Company [Member]

Contingencies And Commitments

3:Contingencies and Commitments

CMS Energy and Consumers are involved in various matters that give rise to contingent liabilities.  Depending on the specific issues, the resolution of these contingencies could negatively affect CMS Energy’s and Consumers’ liquidity, financial condition, and results of operations.  In their disclosures of these matters, CMS Energy and Consumers provide an estimate of the possible loss or range of loss when such an estimate can be made.  Disclosures that state that CMS Energy or Consumers cannot predict the outcome of a matter indicate that they are unable to estimate a possible loss or range of loss for the matter.

CMS Energy Contingencies

Gas Index Price Reporting Litigation:CMS Energy, along with CMS MST, CMS Field Services, Cantera Natural Gas, Inc., and Cantera Gas Company, have been named as defendants in four class action lawsuits and one individual lawsuit arising as a result of alleged inaccurate natural gas price reporting to publications that report trade information.  Allegations include price-fixing conspiracies, restraint of trade, and artificial inflation of natural gas retail prices in Kansas, Missouri, and Wisconsin. Plaintiffs are making claims for the following: treble damages, full consideration damages, exemplary damages, costs, interest, and/or attorneys’ fees.

After removal to federal court, all of the cases were transferred to a single federal district court pursuant to the multidistrict litigation process.  In 2010 and 2011, all claims against CMS Energy defendants were dismissed by the district court based on FERC preemption.  Plaintiffs filed appeals in all of the cases.  The issues on appeal were whether the district court erred in dismissing the cases based on FERC preemption and denying the plaintiffs’ motions for leave to amend their complaints to add a federal Sherman Act antitrust claim.  The plaintiffs did not appeal the dismissal of CMS Energy as a defendant in these cases, but other CMS Energy entities remain as defendants.

In 2013, the U.S. Court of Appeals for the Ninth Circuit reversed the district court decision. The appellate court found that FERC preemption does not apply under the facts of these cases.  The appellate court affirmed the district court’s denial of leave to amend to add federal antitrust claims. The matter was appealed to the U.S. Supreme Court, which in 2015 upheld the Ninth Circuit’s decision. The cases have been remanded back to the federal district court.

These cases involve complex facts, a large number of similarly situated defendants with different factual positions, and multiple jurisdictions.  Presently, any estimate of liability would be highly speculative; the amount of CMS Energy’s reasonably possible loss would be based on widely varying models previously untested in this context.  If the outcome after appeals is unfavorable, these cases could negatively affect CMS Energy’s liquidity, financial condition, and results of operations.

Bay Harbor:CMS Land retained environmental remediation obligations for the collection and treatment of leachate, a liquid consisting of water and other substances, at Bay Harbor after selling its interests in the development in 2002.  Leachate is produced when water enters into cement kiln dust piles left over from former cement plant operations at the site.  In 2012, CMS Land and the MDEQ finalized an agreement that established the final remedies and the future water quality criteria at the site. CMS Land completed all construction necessary to implement the remedies required by the agreement and will continue to maintain and operate a system to discharge treated leachate into Little Traverse Bay under an NPDES permit issued in 2010.  CMS Land is presently working with the MDEQ to renew this permit, which requires renewal every five years. Until a new permit is issued, CMS Land is authorized to continue operating under the existing permit.

Various claims have been brought against CMS Land or its affiliates, including CMS Energy, alleging environmental damage to property, loss of property value, insufficient disclosure of environmental matters, breach of agreement relating to access, or other matters.  CMS Land and other parties have received a demand for payment from the EPA in the amount of $8 million, plus interest.  The EPA is seeking recovery under CERCLA of response costs allegedly incurred at Bay Harbor.  These costs exceed what was agreed to in a 2005 order between CMS Land and the EPA, and CMS Land has communicated to the EPA that it does not believe that this is a valid claim. The EPA has filed a lawsuit to collect these costs.

At March 31, 2016, CMS Energy had a recorded liability of $54 million for its remaining obligations.  CMS Energy calculated this liability based on discounted projected costs, using a discount rate of 4.34 percent and an inflation rate of one percent on annual operating and maintenance costs.  The undiscounted amount of the remaining obligation is $69 million.  CMS Energy expects to pay the following amounts for long-term liquid disposal and operating and maintenance costs in 2016 and in each of the next four years:

In Millions
	2016			2017			2018			2019			2020
CMS Energy
Long-term liquid disposal and operating and maintenance costs		$	6		$	5		$	4		$	4		$	4

CMS Energy’s estimate of response activity costs and the timing of expenditures could change if there are changes in circumstances or assumptions used in calculating the liability.  Although a liability for its present estimate of remaining response activity costs has been recorded, CMS Energy cannot predict the ultimate financial impact or outcome of this matter.

Equatorial Guinea Tax Claim:In 2002, CMS Energy sold its oil, gas, and methanol investments in Equatorial Guinea.  The government of Equatorial Guinea claims that CMS Energy owes $152 million in taxes, plus significant penalties and interest, in connection with the sale. The matteris proceeding to formal arbitration.  CMS Energy has concluded that the government’s tax claim is without merit and is contesting the claim, but cannot predict the financial impact or outcome of the matter. An unfavorable outcome could have a material adverse effect on CMS Energy’s liquidity, financial condition, and results of operations.

Consumers Electric Utility Contingencies

Electric Environmental Matters:Consumers’ operations are subject to environmental laws and regulations.  Historically, Consumers has generally been able to recover, in customer rates, the costs to operate its facilities in compliance with these laws and regulations.

Cleanup and Solid Waste:Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA.  Consumers believes that these costs should be recoverable in rates, but cannot guarantee that outcome.  Consumers estimates that its liability for NREPA sites for which it can estimate a range of loss will be between $3 million and $5 million.  At March 31, 2016, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability.

Consumers is a potentially responsible party at a number of contaminated sites administered under CERCLA.  CERCLA liability is joint and several.  In 2010, Consumers received official notification from the EPA that identified Consumers as a potentially responsible party for cleanup of PCBs at the Kalamazoo River CERCLA site.  The notification claimed that the EPA has reason to believe that Consumers disposed of PCBs and arranged for the disposal and treatment of PCB-containing materials at portions of the site.  In 2011, Consumers received a follow‑up letter from the EPA requesting that Consumers agree to participate in a removal action plan along with several other companies for an area of lower Portage Creek, which is connected to the Kalamazoo River.  All parties, including Consumers, that were asked to participate in the removal action plan declined to accept liability.  Until further information is received from the EPA, Consumers is unable to estimate a range of potential liability for cleanup of the river.

Based on its experience, Consumers estimates that its share of the total liability for known CERCLA sites will be between $3 million and $8 million.  Various factors, including the number of potentially responsible parties involved with each site, affect Consumers’ share of the total liability.  At March 31, 2016, Consumers had a recorded liability of $3 million for its share of the total liability at these sites, the minimum amount in the range of its estimated probable CERCLA liability.

The timing of payments related to Consumers’ remediation and other response activities at its CERCLA and NREPA sites is uncertain.  Consumers periodically reviews these cost estimates. A change in the underlying assumptions, such as an increase in the number of sites, different remediation techniques, the nature and extent of contamination, and legal and regulatory requirements, could affect its estimates of NREPA and CERCLA liability.

Ludington PCB:In 1998, during routine maintenance activities, Consumers identified PCB as a component in certain paint, grout, and sealant materials at Ludington.  Consumers removed part of the PCB material and replaced it with non‑PCB material.  Consumers has had several communications with the EPA regarding this matter.  Consumers cannot predict the financial impact or outcome of this matter.

Consumers Gas Utility Contingencies

Gas Environmental Matters:Consumers expects to incur remediation and other response activity costs at a number of sites under the NREPA.  These sites include 23 former MGP facilities.  Consumers operated the facilities on these sites for some part of their operating lives.  For some of these sites, Consumers has no present ownership interest or may own only a portion of the original site.

At March 31, 2016, Consumers had a recorded liability of $114 million for its remaining obligations for these sites.  This amount represents the present value of long-term projected costs, using a discount rate of 2.57 percent and an inflation rate of 2.5 percent.  The undiscounted amount of the remaining obligation is $130 million.  Consumers expects to pay the following amounts for remediation and other response activity costs in 2016 and in each of the next four years:

In Millions
	2016			2017			2018			2019			2020
Consumers
Remediation and other response activity costs		$	15		$	20		$	11		$	14		$	19

Consumers periodically reviews these cost estimates. Any significant change in the underlying assumptions, such as an increase in the number of sites, changes in remediation techniques, or legal and regulatory requirements, could affect Consumers’ estimates of annual response activity costs and the MGP liability. At one of the MGP sites, Consumers is evaluating the timing and approach of its remediation strategy, which could result in a change to its cost estimates in 2016.

Pursuant to orders issued by the MPSC, Consumers defers its MGP-related remediation costs and recovers them from its customers over a ten-year period.  At March 31, 2016, Consumers had a regulatory asset of $145 million related to the MGP sites.

Consumers estimates that its liability to perform remediation and other response activities at NREPA sites other than the MGP sites could reach $3 million.  At March 31, 2016, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at March 31, 2016:

In Millions
			Maximum			Carrying
Guarantee Description	Issue Date	Expiration Date	Obligation			Amount
CMS Energy, including Consumers
Indemnity obligations from asset sales    and other agreements1	Various	Indefinite		$	153		$	7
Guarantees2	Various	Indefinite			49			-
Consumers
Gurarantee2	July 2011	Indefinite		$	30		$	-

¹ These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

² At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers’ guarantee to the DOE and CMS Energy’s 1994 guarantee of non-recourse revenue bonds issued by Genesee.

Additionally, in the normal course of business, CMS Energy, Consumers, and certain other subsidiaries of CMS Energy have entered into various agreements containing tax and other indemnity provisions for which they are unable to estimate the maximum potential obligation. The current carrying value of these indemnity obligations is less than $1 million.  CMS Energy and Consumers consider the likelihood that they would be required to perform or incur substantial losses related to these indemnities to be remote.

Other Contingencies

Michigan Sales and Use Tax Litigation: In 2010, the Michigan Department of Treasury finalized a sales and use tax audit of Consumers for the period from October 1997 to December 2004. It determined that Consumers’ electric and natural gas distribution equipment was not eligible for an industrial-processing exemption and therefore was subject to the use tax. Consumers paid the tax for the period from 1997 through 2004 and filed a claim in the Michigan Court of Claims disputing the tax determination. Consumers has continued to apply the industrial-processing exemption for the years subsequent to 2004.

In December 2015, Consumers and the Michigan Department of Treasury reached a settlement agreement under which the Michigan Department of Treasury will refund to Consumers the majority of use tax that Consumers paid on electric distribution equipment for the period from October 1997 through December 2004. Accordingly, Consumers will receive $37 million, which comprises a $19 million refund of taxes paid, a $12 million refund of interest paid, and $6 million of interest owed to Consumers. Consumers recognized the effects of this settlement agreement in its consolidated financial statements in December 2015.

The parties continue to meet to reach agreement on a reasonable method of apportionment relating to Consumers’ natural gas system for the period from October 1997 to December 2004 and to Consumers’ electric and natural gas distribution equipment for the period from January 2005 to December 2014.

Other:In addition to the matters disclosed in this Note and Note 2, Regulatory Matters, there are certain other lawsuits and administrative proceedings before various courts and governmental agencies arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties.  These other lawsuits and proceedings may involve personal injury, property damage, contracts, environmental matters, federal and state taxes, rates, licensing, employment, and other matters.  Further, CMS Energy and Consumers occasionally self-report certain regulatory non‑compliance matters that may or may not eventually result in administrative proceedings.  CMS Energy and Consumers believe that the outcome of any one of these proceedings will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

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Financings And Capitalization

3 Months Ended

Mar. 31, 2016

Financings And Capitalization

4:Financings and Capitalization

Term Loan: In April 2016, CMS Energy reached an agreement to extend the maturity date of its $180 million term loan by one year, through April 2018.

Revolving Credit Facilities:The following secured revolving credit facilities with banks were available at March 31, 2016:

In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy parent
May 27, 20201		$	550		$	-		$	1		$	549
Consumers
May 27, 20202		$	650		$	-		$	7		$	643
November 23, 20172			250			-			-			250
May 9, 20182			30			-			30			-

¹ During the three months ended March 31, 2016, CMS Energy’s average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent.  Obligations under this facility are secured by Consumers common stock.

² Obligations under this facility are secured by first mortgage bonds of Consumers.

Short-term Borrowings:Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, commercial paper notes with maturities of up to 365 days and that bear interest at fixed or floating rates.  These issuances are supported by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million.  While the amount of outstanding commercial paper does not reduce the revolver’s available capacity, Consumers would not issue commercial paper in an amount exceeding the available revolver capacity.  At March 31, 2016,  no commercial paper notes were outstanding under this program.

Dividend Restrictions:At March 31, 2016, payment of dividends by CMS Energy on its common stock was limited to $4.1 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at March 31, 2016, Consumers had $902 million of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy.  Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings.  Several decisions from FERC suggest that under a variety of circumstances dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings.  Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

For the three months ended March 31, 2016, Consumers paid $155 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock:In April 2015, CMS Energy entered into an updated continuous equity offering program permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $100 million. Presented in the following table are the transactions that CMS Energy entered into under the program:

	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
April – July 2015	888,610		$	33.76		$	30
March 2016	1,449,171			41.40			60
Total	2,337,781		$	38.50		$	90

Consumers Energy Company [Member]

Financings And Capitalization

4:Financings and Capitalization

Term Loan: In April 2016, CMS Energy reached an agreement to extend the maturity date of its $180 million term loan by one year, through April 2018.

Revolving Credit Facilities:The following secured revolving credit facilities with banks were available at March 31, 2016:

In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy parent
May 27, 20201		$	550		$	-		$	1		$	549
Consumers
May 27, 20202		$	650		$	-		$	7		$	643
November 23, 20172			250			-			-			250
May 9, 20182			30			-			30			-

¹ During the three months ended March 31, 2016, CMS Energy’s average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent.  Obligations under this facility are secured by Consumers common stock.

² Obligations under this facility are secured by first mortgage bonds of Consumers.

Short-term Borrowings:Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, commercial paper notes with maturities of up to 365 days and that bear interest at fixed or floating rates.  These issuances are supported by Consumers’ $650 million revolving credit facility and may have an aggregate principal amount outstanding of up to $500 million.  While the amount of outstanding commercial paper does not reduce the revolver’s available capacity, Consumers would not issue commercial paper in an amount exceeding the available revolver capacity.  At March 31, 2016,  no commercial paper notes were outstanding under this program.

Dividend Restrictions:At March 31, 2016, payment of dividends by CMS Energy on its common stock was limited to $4.1 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at March 31, 2016, Consumers had $902 million of unrestricted retained earnings available to pay dividends on its common stock to CMS Energy.  Provisions of the Federal Power Act and the Natural Gas Act appear to restrict dividends payable by Consumers to the amount of Consumers’ retained earnings.  Several decisions from FERC suggest that under a variety of circumstances dividends from Consumers on its common stock would not be limited to amounts in Consumers’ retained earnings.  Any decision by Consumers to pay dividends on its common stock in excess of retained earnings would be based on specific facts and circumstances and would be subject to a formal regulatory filing process.

For the three months ended March 31, 2016, Consumers paid $155 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock:In April 2015, CMS Energy entered into an updated continuous equity offering program permitting it to sell, from time to time in “at the market” offerings, common stock having an aggregate sales price of up to $100 million. Presented in the following table are the transactions that CMS Energy entered into under the program:

	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
April – July 2015	888,610		$	33.76		$	30
March 2016	1,449,171			41.40			60
Total	2,337,781		$	38.50		$	90

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

5:Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.  A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market.  The three levels of the fair value hierarchy are as follows:

· Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

· Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

· Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
	March 31			December 31			March 31			December 31
	2016			2015			2016			2015
Assets1
Cash equivalents		$	85		$	158		$	-		$	-
Restricted cash equivalents			28			19			28			19
CMS Energy common stock			-			-			34			29
Nonqualified deferred    compensation plan assets			10			10			7			7
DB SERP
Cash equivalents			1			2			1			2
Mutual funds			145			146			104			104
Derivative instruments
Commodity contracts			1			1			1			1
Total		$	270		$	336		$	175		$	162
Liabilities1
Nonqualified deferred    compensation plan liabilities		$	10		$	10		$	7		$	7
Total		$	10		$	10		$	7		$	7

¹ All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

Cash Equivalents:Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity.

Nonqualified Deferred Compensation Plan Assets and Liabilities:The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using daily quoted NAVs.  CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect what is owed to the plan participants in accordance with their investment elections.  CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

DB SERP Assets:The DB SERP cash equivalents consist of a money market fund with daily liquidity.  The DB SERP invests in mutual funds that hold primarily fixed-income instruments of varying maturities.  In order to meet their investment objectives, the funds hold investment-grade debt securities and may invest a portion of their assets in high-yield securities, foreign debt, and derivative instruments.  CMS Energy and Consumers value these funds using daily quoted NAVs. CMS Energy and Consumers report their DB SERP assets in other non‑current assets on their consolidated balance sheets.  For additional details about DB SERP securities, see Note 6, Financial Instruments.

Derivative Instruments:CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount.  CMS Energy’s and Consumers’ derivatives are classified as Level 3.

The majority of these derivatives are FTRs held by Consumers.  Consumers uses FTRs to manage price risk related to electricity transmission congestion.  An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges.  Under regulatory accounting, all changes in fair value associated with FTRs are deferred as regulatory assets and liabilities until the instruments are settled.  Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements.

Consumers Energy Company [Member]

Fair Value Measurements

5:Fair Value Measurements

Accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.  When measuring fair value, CMS Energy and Consumers are required to incorporate all assumptions that market participants would use in pricing an asset or liability, including assumptions about risk.  A fair value hierarchy prioritizes inputs used to measure fair value according to their observability in the market.  The three levels of the fair value hierarchy are as follows:

· Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.

· Level 2 inputs are observable, market-based inputs, other than Level 1 prices. Level 2 inputs may include quoted prices for similar assets or liabilities in active markets, quoted prices in inactive markets, and inputs derived from or corroborated by observable market data.

· Level 3 inputs are unobservable inputs that reflect CMS Energy’s or Consumers’ own assumptions about how market participants would value their assets and liabilities.

CMS Energy and Consumers classify fair value measurements within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement in its entirety.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

Presented in the following table are CMS Energy’s and Consumers’ assets and liabilities recorded at fair value on a recurring basis:

In Millions
	CMS Energy, including Consumers						Consumers
	March 31			December 31			March 31			December 31
	2016			2015			2016			2015
Assets1
Cash equivalents		$	85		$	158		$	-		$	-
Restricted cash equivalents			28			19			28			19
CMS Energy common stock			-			-			34			29
Nonqualified deferred    compensation plan assets			10			10			7			7
DB SERP
Cash equivalents			1			2			1			2
Mutual funds			145			146			104			104
Derivative instruments
Commodity contracts			1			1			1			1
Total		$	270		$	336		$	175		$	162
Liabilities1
Nonqualified deferred    compensation plan liabilities		$	10		$	10		$	7		$	7
Total		$	10		$	10		$	7		$	7

¹ All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

Cash Equivalents:Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity.

Nonqualified Deferred Compensation Plan Assets and Liabilities:The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using daily quoted NAVs.  CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect what is owed to the plan participants in accordance with their investment elections.  CMS Energy and Consumers report the assets in other non‑current assets and the liabilities in other non‑current liabilities on their consolidated balance sheets.

DB SERP Assets:The DB SERP cash equivalents consist of a money market fund with daily liquidity.  The DB SERP invests in mutual funds that hold primarily fixed-income instruments of varying maturities.  In order to meet their investment objectives, the funds hold investment-grade debt securities and may invest a portion of their assets in high-yield securities, foreign debt, and derivative instruments.  CMS Energy and Consumers value these funds using daily quoted NAVs. CMS Energy and Consumers report their DB SERP assets in other non‑current assets on their consolidated balance sheets.  For additional details about DB SERP securities, see Note 6, Financial Instruments.

Derivative Instruments:CMS Energy and Consumers value their derivative instruments using either a market approach that incorporates information from market transactions, or an income approach that discounts future expected cash flows to a present value amount.  CMS Energy’s and Consumers’ derivatives are classified as Level 3.

The majority of these derivatives are FTRs held by Consumers.  Consumers uses FTRs to manage price risk related to electricity transmission congestion.  An FTR is a financial instrument that entitles its holder to receive compensation or requires its holder to remit payment for congestion-related transmission charges.  Under regulatory accounting, all changes in fair value associated with FTRs are deferred as regulatory assets and liabilities until the instruments are settled.  Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements.

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Financial Instruments

3 Months Ended

Mar. 31, 2016

Financial Instruments

6:Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value.  The table does not include information on cash, cash equivalents, short-term accounts and notes receivable, short-term investments, and current liabilities since the carrying amounts of these items approximate their fair values because of their short-term nature.  For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	March 31, 2016															December 31, 2015
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Securities held    to maturity		$	13		$	13		$	-		$	13		$	-		$	11		$	11		$	-		$	11		$	-
Long-term    payable1			14			15			-			-			15			14			14			-			-			14
Notes    receivable2			1,175			1,256			-			-			1,256			1,161			1,228			-			-			1,228
Long-term    debt3			9,099			9,841			-			8,856			985			9,084			9,599			-			8,648			951
Consumers
Long-term    debt4		$	5,382		$	5,853		$	-		$	4,868		$	985		$	5,381		$	5,684		$	-		$	4,733		$	951

¹ Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

² Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

³ Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

⁴ Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

Notes receivable consist of EnerBank’s fixed-rate installment loans.  EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available.  In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for similarly rated debt.  Depending on the information available, other valuation techniques and models may be used that rely on assumptions that cannot be observed or confirmed through market transactions.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt.  At March 31, 2016 and December 31, 2015, CMS Energy’s long-term debt included  $103 million principal amount that was supported by third-party credit enhancements.  This entire principal amount was at Consumers.

Presented in the following table are CMS Energy’s and Consumers’ investment securities classified as available for sale or held to maturity:

In Millions
	March 31, 2016												December 31, 2015
				Unrealized			Unrealized			Fair						Unrealized			Unrealized			Fair
	Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
CMS Energy, including Consumers
Available for sale
DB SERP
Mutual funds		$	152		$	-		$	7		$	145		$	152		$	-		$	6		$	146
Held to maturity
Debt securities			13			-			-			13			11			-			-			11
Consumers
Available for sale
DB SERP
Mutual funds		$	109		$	-		$	5		$	104		$	108		$	-		$	4		$	104
CMS Energy    common stock			4			30			-			34			4			25			-			29

The mutual funds classified as available for sale hold primarily fixed-income instruments of varying maturities.  Debt securities classified as held to maturity consist primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.

Consumers Energy Company [Member]

Financial Instruments

6:Financial Instruments

Presented in the following table are the carrying amounts and fair values, by level within the fair value hierarchy, of CMS Energy’s and Consumers’ financial instruments that are not recorded at fair value.  The table does not include information on cash, cash equivalents, short-term accounts and notes receivable, short-term investments, and current liabilities since the carrying amounts of these items approximate their fair values because of their short-term nature.  For information about assets and liabilities recorded at fair value and for additional details regarding the fair value hierarchy, see Note 5, Fair Value Measurements.

In Millions
	March 31, 2016															December 31, 2015
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Securities held    to maturity		$	13		$	13		$	-		$	13		$	-		$	11		$	11		$	-		$	11		$	-
Long-term    payable1			14			15			-			-			15			14			14			-			-			14
Notes    receivable2			1,175			1,256			-			-			1,256			1,161			1,228			-			-			1,228
Long-term    debt3			9,099			9,841			-			8,856			985			9,084			9,599			-			8,648			951
Consumers
Long-term    debt4		$	5,382		$	5,853		$	-		$	4,868		$	985		$	5,381		$	5,684		$	-		$	4,733		$	951

¹ Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

² Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

³ Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

⁴ Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

Notes receivable consist of EnerBank’s fixed-rate installment loans.  EnerBank estimates the fair value of these loans using a discounted cash flows technique that incorporates market interest rates as well as assumptions about the remaining life of the loans and credit risk.

CMS Energy and Consumers estimate the fair value of their long-term debt using quoted prices from market trades of the debt, if available.  In the absence of quoted prices, CMS Energy and Consumers calculate market yields and prices for the debt using a matrix method that incorporates market data for similarly rated debt.  Depending on the information available, other valuation techniques and models may be used that rely on assumptions that cannot be observed or confirmed through market transactions.

The effects of third-party credit enhancements are excluded from the fair value measurements of long-term debt.  At March 31, 2016 and December 31, 2015, CMS Energy’s long-term debt included  $103 million principal amount that was supported by third-party credit enhancements.  This entire principal amount was at Consumers.

Presented in the following table are CMS Energy’s and Consumers’ investment securities classified as available for sale or held to maturity:

In Millions
	March 31, 2016												December 31, 2015
				Unrealized			Unrealized			Fair						Unrealized			Unrealized			Fair
	Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
CMS Energy, including Consumers
Available for sale
DB SERP
Mutual funds		$	152		$	-		$	7		$	145		$	152		$	-		$	6		$	146
Held to maturity
Debt securities			13			-			-			13			11			-			-			11
Consumers
Available for sale
DB SERP
Mutual funds		$	109		$	-		$	5		$	104		$	108		$	-		$	4		$	104
CMS Energy    common stock			4			30			-			34			4			25			-			29

The mutual funds classified as available for sale hold primarily fixed-income instruments of varying maturities.  Debt securities classified as held to maturity consist primarily of mortgage-backed securities and Utah Housing Corporation bonds held by EnerBank.

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Notes Receivable

3 Months Ended

Mar. 31, 2016

Notes Receivable [Abstract]

Notes Receivable

7:Notes Receivable

Presented in the following table are details of CMS Energy’s current and non‑current notes receivable:

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	135		$	128
EnerBank notes receivable held for sale			16			16
Non-current
EnerBank notes receivable			1,024			1,017
Total notes receivable		$	1,175		$	1,161

EnerBank notes receivable are unsecured consumer installment loans for financing home improvements.  EnerBank records its notes receivable at cost, less allowance for loan losses.  At March 31,2016,  $16 million of notes receivable were classified as held for sale; the fair value of notes receivable held for sale exceeded their carrying value. These notes are expected to be sold in 2016.

Authorized contractors pay fees to EnerBank to provide borrowers with same-as-cash, zero interest, or reduced interest loans. Unearned income associated with the loan fees, which is recorded as a reduction to notes receivable on CMS Energy’s consolidated balance sheets, was $83 million at March 31, 2016 and $82million at December 31, 2015.

The allowance for loan losses is a valuation allowance to reflect estimated credit losses.  The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries.  Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors.  Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

Loans that are 30 days or more past due are considered delinquent.  The balance of EnerBank’s delinquent consumer loans was $8 million at March 31, 2016 and at December 31, 2015.

At March 31, 2016 and December 31, 2015, $1 million of EnerBank’s loans had been modified as troubled debt restructurings.

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Retirement Benefits

3 Months Ended

Mar. 31, 2016

Retirement Benefits

8:Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In January 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. Historically, the discount rate used for this purpose represented a single weighted-average rate derived from the yield curve used to determine the benefit obligation. CMS Energy and Consumers have elected to use instead a full-yield-curve approach in the estimation of service cost and interest expense; this approach is more accurate in that it applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment. For the three months ended March 31, 2016, the service cost and interest expense components of net periodic benefit costs were reduced by $6 million for the DB Pension Plan and by $3 million for the OPEB Plan for both CMS Energy and Consumers as a result of changing to the full-yield-curve approach to determine the discount rate.

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

In Millions
	DB Pension Plan						OPEB Plan
Three Months Ended March 31	2016			2015			2016			2015
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	11		$	12		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(9)		$	(6)

Consumers Energy Company [Member]

Retirement Benefits

8:Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In January 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. Historically, the discount rate used for this purpose represented a single weighted-average rate derived from the yield curve used to determine the benefit obligation. CMS Energy and Consumers have elected to use instead a full-yield-curve approach in the estimation of service cost and interest expense; this approach is more accurate in that it applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment. For the three months ended March 31, 2016, the service cost and interest expense components of net periodic benefit costs were reduced by $6 million for the DB Pension Plan and by $3 million for the OPEB Plan for both CMS Energy and Consumers as a result of changing to the full-yield-curve approach to determine the discount rate.

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

In Millions
	DB Pension Plan						OPEB Plan
Three Months Ended March 31	2016			2015			2016			2015
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	11		$	12		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(9)		$	(6)

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Income Taxes

3 Months Ended

Mar. 31, 2016

Income Taxes

9: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:

Three Months Ended March 31	2016			2015
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		4.1			4.8
Accelerated flow-through of regulatory tax benefits		(4.7)			(4.9)
Employee share-based awards1		(2.2)			-
Other, net		(1.1)			(1.8)
Effective tax rate		31.1	%		33.1	%
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		4.4			4.7
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.4)
Employee share-based awards1		(2.0)			-
Other, net		(0.9)			(1.5)
Effective tax rate		32.3	%		33.8	%

¹ CMSEnergy and Consumers elected to adopt ASU2016-09, Improvements to Employee Share-Based Payment Accounting, as of January1, 2016. For further details on the implementation of this standard, see Note1, New Accounting Standards.

Consumers Energy Company [Member]

Income Taxes

9: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:

Three Months Ended March 31	2016			2015
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		4.1			4.8
Accelerated flow-through of regulatory tax benefits		(4.7)			(4.9)
Employee share-based awards1		(2.2)			-
Other, net		(1.1)			(1.8)
Effective tax rate		31.1	%		33.1	%
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		4.4			4.7
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.4)
Employee share-based awards1		(2.0)			-
Other, net		(0.9)			(1.5)
Effective tax rate		32.3	%		33.8	%

¹ CMSEnergy and Consumers elected to adopt ASU2016-09, Improvements to Employee Share-Based Payment Accounting, as of January1, 2016. For further details on the implementation of this standard, see Note1, New Accounting Standards.

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Earnings Per Share - CMS Energy

3 Months Ended

Mar. 31, 2016

Earnings Per Share - CMS Energy [Abstract]

Earnings Per Share - CMS Energy

10:Earnings Per Share—CMS Energy

Presented in the following table are CMS Energy’s basic and diluted EPS computations based on net income:

In Millions, Except Per Share Amounts
Three Months Ended March 31	2016			2015
Income available to common stockholders
Net income available to common stockholders – basic and diluted		$	164		$	202
Average common shares outstanding
Weighted-average shares – basic			276.7			274.8
Add dilutive nonvested stock awards			1.2			0.9
Weighted-average shares – diluted			277.9			275.7
Net income per average common share available to common stockholders
Basic		$	0.59		$	0.73
Diluted			0.59			0.73

Nonvested Stock Awards

CMS Energy’s nonvested stock awards are composed of participating and non‑participating securities.  The participating securities accrue cash dividends when common stockholders receive dividends.  Since the recipient is not required to return the dividends to CMS Energy if the recipient forfeits the award, the nonvested stock awards are considered participating securities. As such, the participating nonvested stock awards were included in the computation of basic EPS.  The non‑participating securities accrue stock dividends that vest concurrently with the stock award.  If the recipient forfeits the award, the stock dividends accrued on the non‑participating securities are also forfeited.  Accordingly, the non‑participating awards and stock dividends were included in the computation of diluted EPS, but not basic EPS.

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Reportable Segments

3 Months Ended

Mar. 31, 2016

Reportable Segments

11:Reportable Segments

Reportable segments consist of business units defined by the products and services they offer.  CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

CMS Energy

The reportable segments for CMS Energy are:

· electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

· gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

· enterprises, consisting of various subsidiaries engaging primarily in domestic independent power production

CMS Energy presents EnerBank and corporate interest and other expenses within other reconciling items.

Consumers

The reportable segments for Consumers are:

· electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

· gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by reportable segment:

In Millions
Three Months Ended March 31	2016			2015
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Enterprises			48			60
Other reconciling items			30			23
Total operating revenue – CMS Energy		$	1,801		$	2,111
Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Total operating revenue – Consumers		$	1,723		$	2,028
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	91		$	94
Gas utility			81			121
Enterprises			6			7
Other reconciling items			(14)			(20)
Total net income available to common stockholders – CMS Energy		$	164		$	202
Consumers
Net income available to common stockholder
Electric utility		$	91		$	94
Gas utility			81			121
Total net income available to common stockholder – Consumers		$	172		$	215

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Enterprises			159			120
Other reconciling items			25			41
Total plant, property, and equipment, gross – CMS Energy		$	19,334		$	18,943
Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Other reconciling items			15			15
Total plant, property, and equipment, gross – Consumers		$	19,165		$	18,797
CMS Energy, including Consumers
Total assets
Electric utility1		$	12,743		$	12,660
Gas utility1			5,624			5,912
Enterprises			261			270
Other reconciling items			1,409			1,457
Total assets – CMS Energy2		$	20,037		$	20,299
Consumers
Total assets
Electric utility1		$	12,744		$	12,660
Gas utility1			5,624			5,912
Other reconciling items			54			63
Total assets – Consumers2		$	18,422		$	18,635

¹ Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

² CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03,  Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

Consumers Energy Company [Member]

Reportable Segments

11:Reportable Segments

Reportable segments consist of business units defined by the products and services they offer.  CMS Energy and Consumers evaluate the performance of each segment based on its contribution to net income available to CMS Energy’s common stockholders.

CMS Energy

The reportable segments for CMS Energy are:

· electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

· gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

· enterprises, consisting of various subsidiaries engaging primarily in domestic independent power production

CMS Energy presents EnerBank and corporate interest and other expenses within other reconciling items.

Consumers

The reportable segments for Consumers are:

· electric utility, consisting of regulated activities associated with the generation, transmission, and distribution of electricity in Michigan

· gas utility, consisting of regulated activities associated with the transportation, storage, and distribution of natural gas in Michigan

Consumers’ other consolidated entities are presented within other reconciling items.

Presented in the following tables is financial information by reportable segment:

In Millions
Three Months Ended March 31	2016			2015
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Enterprises			48			60
Other reconciling items			30			23
Total operating revenue – CMS Energy		$	1,801		$	2,111
Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Total operating revenue – Consumers		$	1,723		$	2,028
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	91		$	94
Gas utility			81			121
Enterprises			6			7
Other reconciling items			(14)			(20)
Total net income available to common stockholders – CMS Energy		$	164		$	202
Consumers
Net income available to common stockholder
Electric utility		$	91		$	94
Gas utility			81			121
Total net income available to common stockholder – Consumers		$	172		$	215

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Enterprises			159			120
Other reconciling items			25			41
Total plant, property, and equipment, gross – CMS Energy		$	19,334		$	18,943
Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Other reconciling items			15			15
Total plant, property, and equipment, gross – Consumers		$	19,165		$	18,797
CMS Energy, including Consumers
Total assets
Electric utility1		$	12,743		$	12,660
Gas utility1			5,624			5,912
Enterprises			261			270
Other reconciling items			1,409			1,457
Total assets – CMS Energy2		$	20,037		$	20,299
Consumers
Total assets
Electric utility1		$	12,744		$	12,660
Gas utility1			5,624			5,912
Other reconciling items			54			63
Total assets – Consumers2		$	18,422		$	18,635

¹ Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

² CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03,  Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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Notes Receivable (Policy)

3 Months Ended

Mar. 31, 2016

Notes Receivable [Abstract]

Allowance For Loan Losses Policy

The allowance for loan losses is a valuation allowance to reflect estimated credit losses.  The allowance is increased by the provision for loan losses and decreased by loan charge-offs net of recoveries.  Management estimates the allowance balance required by taking into consideration historical loan loss experience, the nature and volume of the portfolio, economic conditions, and other factors.  Loan losses are charged against the allowance when the loss is confirmed, but no later than the point at which a loan becomes 120 days past due.

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Contingencies And Commitments (Tables)

3 Months Ended

Mar. 31, 2016

Site Contingency [Line Items]

Guarantees

In Millions
			Maximum			Carrying
Guarantee Description	Issue Date	Expiration Date	Obligation			Amount
CMS Energy, including Consumers
Indemnity obligations from asset sales    and other agreements1	Various	Indefinite		$	153		$	7
Guarantees2	Various	Indefinite			49			-
Consumers
Gurarantee2	July 2011	Indefinite		$	30		$	-

¹ These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

² At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers’ guarantee to the DOE and CMS Energy’s 1994 guarantee of non-recourse revenue bonds issued by Genesee.

Consumers Energy Company [Member]

Site Contingency [Line Items]

Expected Remediation Cost By Year

In Millions
	2016			2017			2018			2019			2020
Consumers
Remediation and other response activity costs		$	15		$	20		$	11		$	14		$	19

Guarantees

In Millions
			Maximum			Carrying
Guarantee Description	Issue Date	Expiration Date	Obligation			Amount
CMS Energy, including Consumers
Indemnity obligations from asset sales    and other agreements1	Various	Indefinite		$	153		$	7
Guarantees2	Various	Indefinite			49			-
Consumers
Gurarantee2	July 2011	Indefinite		$	30		$	-

¹ These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

² At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers’ guarantee to the DOE and CMS Energy’s 1994 guarantee of non-recourse revenue bonds issued by Genesee.

Bay Harbor [Member]

Site Contingency [Line Items]

Expected Remediation Cost By Year

In Millions
	2016			2017			2018			2019			2020
CMS Energy
Long-term liquid disposal and operating and maintenance costs		$	6		$	5		$	4		$	4		$	4

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Financings And Capitalization (Tables)

3 Months Ended

Mar. 31, 2016

Revolving Credit Facilities

In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy parent
May 27, 20201		$	550		$	-		$	1		$	549
Consumers
May 27, 20202		$	650		$	-		$	7		$	643
November 23, 20172			250			-			-			250
May 9, 20182			30			-			30			-

¹ During the three months ended March 31, 2016, CMS Energy’s average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent.  Obligations under this facility are secured by Consumers common stock.

² Obligations under this facility are secured by first mortgage bonds of Consumers.

Issuance Of Stock

	Number of	Average			Proceeds
	Shares Issued	Price per Share			(In Millions)
April – July 2015	888,610		$	33.76		$	30
March 2016	1,449,171			41.40			60
Total	2,337,781		$	38.50		$	90

Consumers Energy Company [Member]

Revolving Credit Facilities

In Millions
							Letters of Credit
Expiration Date	Amount of Facility			Amount Borrowed			Outstanding			Amount Available
CMS Energy parent
May 27, 20201		$	550		$	-		$	1		$	549
Consumers
May 27, 20202		$	650		$	-		$	7		$	643
November 23, 20172			250			-			-			250
May 9, 20182			30			-			30			-

¹ During the three months ended March 31, 2016, CMS Energy’s average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent.  Obligations under this facility are secured by Consumers common stock.

² Obligations under this facility are secured by first mortgage bonds of Consumers.

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Assets And Liabilities Measured At Fair Value On A Recurring Basis

In Millions
	CMS Energy, including Consumers						Consumers
	March 31			December 31			March 31			December 31
	2016			2015			2016			2015
Assets1
Cash equivalents		$	85		$	158		$	-		$	-
Restricted cash equivalents			28			19			28			19
CMS Energy common stock			-			-			34			29
Nonqualified deferred    compensation plan assets			10			10			7			7
DB SERP
Cash equivalents			1			2			1			2
Mutual funds			145			146			104			104
Derivative instruments
Commodity contracts			1			1			1			1
Total		$	270		$	336		$	175		$	162
Liabilities1
Nonqualified deferred    compensation plan liabilities		$	10		$	10		$	7		$	7
Total		$	10		$	10		$	7		$	7

¹ All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

Consumers Energy Company [Member]

Assets And Liabilities Measured At Fair Value On A Recurring Basis

In Millions
	CMS Energy, including Consumers						Consumers
	March 31			December 31			March 31			December 31
	2016			2015			2016			2015
Assets1
Cash equivalents		$	85		$	158		$	-		$	-
Restricted cash equivalents			28			19			28			19
CMS Energy common stock			-			-			34			29
Nonqualified deferred    compensation plan assets			10			10			7			7
DB SERP
Cash equivalents			1			2			1			2
Mutual funds			145			146			104			104
Derivative instruments
Commodity contracts			1			1			1			1
Total		$	270		$	336		$	175		$	162
Liabilities1
Nonqualified deferred    compensation plan liabilities		$	10		$	10		$	7		$	7
Total		$	10		$	10		$	7		$	7

¹ All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2016

Schedule Of Carrying Amounts And Fair Values Of Financial Instruments

In Millions
	March 31, 2016															December 31, 2015
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Securities held    to maturity		$	13		$	13		$	-		$	13		$	-		$	11		$	11		$	-		$	11		$	-
Long-term    payable1			14			15			-			-			15			14			14			-			-			14
Notes    receivable2			1,175			1,256			-			-			1,256			1,161			1,228			-			-			1,228
Long-term    debt3			9,099			9,841			-			8,856			985			9,084			9,599			-			8,648			951
Consumers
Long-term    debt4		$	5,382		$	5,853		$	-		$	4,868		$	985		$	5,381		$	5,684		$	-		$	4,733		$	951

¹ Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

² Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

³ Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

⁴ Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

Schedule Of Investment Securities

In Millions
	March 31, 2016												December 31, 2015
				Unrealized			Unrealized			Fair						Unrealized			Unrealized			Fair
	Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
CMS Energy, including Consumers
Available for sale
DB SERP
Mutual funds		$	152		$	-		$	7		$	145		$	152		$	-		$	6		$	146
Held to maturity
Debt securities			13			-			-			13			11			-			-			11
Consumers
Available for sale
DB SERP
Mutual funds		$	109		$	-		$	5		$	104		$	108		$	-		$	4		$	104
CMS Energy    common stock			4			30			-			34			4			25			-			29

Consumers Energy Company [Member]

Schedule Of Carrying Amounts And Fair Values Of Financial Instruments

In Millions
	March 31, 2016															December 31, 2015
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Securities held    to maturity		$	13		$	13		$	-		$	13		$	-		$	11		$	11		$	-		$	11		$	-
Long-term    payable1			14			15			-			-			15			14			14			-			-			14
Notes    receivable2			1,175			1,256			-			-			1,256			1,161			1,228			-			-			1,228
Long-term    debt3			9,099			9,841			-			8,856			985			9,084			9,599			-			8,648			951
Consumers
Long-term    debt4		$	5,382		$	5,853		$	-		$	4,868		$	985		$	5,381		$	5,684		$	-		$	4,733		$	951

¹ Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

² Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

³ Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

⁴ Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

Schedule Of Investment Securities

In Millions
	March 31, 2016												December 31, 2015
				Unrealized			Unrealized			Fair						Unrealized			Unrealized			Fair
	Cost			Gains			Losses			Value			Cost			Gains			Losses			Value
CMS Energy, including Consumers
Available for sale
DB SERP
Mutual funds		$	152		$	-		$	7		$	145		$	152		$	-		$	6		$	146
Held to maturity
Debt securities			13			-			-			13			11			-			-			11
Consumers
Available for sale
DB SERP
Mutual funds		$	109		$	-		$	5		$	104		$	108		$	-		$	4		$	104
CMS Energy    common stock			4			30			-			34			4			25			-			29

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Notes Receivable (Tables)

3 Months Ended

Mar. 31, 2016

Notes Receivable [Abstract]

Schedule Of Current And Non-Current Notes Receivable

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	135		$	128
EnerBank notes receivable held for sale			16			16
Non-current
EnerBank notes receivable			1,024			1,017
Total notes receivable		$	1,175		$	1,161

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Retirement Benefits (Tables)

3 Months Ended

Mar. 31, 2016

Defined Benefit Plan Disclosure [Line Items]

Schedule Of Net Benefit Costs

In Millions
	DB Pension Plan						OPEB Plan
Three Months Ended March 31	2016			2015			2016			2015
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	11		$	12		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(9)		$	(6)

Consumers Energy Company [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule Of Net Benefit Costs

In Millions
	DB Pension Plan						OPEB Plan
Three Months Ended March 31	2016			2015			2016			2015
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	11		$	12		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(9)		$	(6)

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2016

Schedule Of Effective Income Tax Rate Reconciliation

Three Months Ended March 31	2016			2015
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		4.1			4.8
Accelerated flow-through of regulatory tax benefits		(4.7)			(4.9)
Employee share-based awards1		(2.2)			-
Other, net		(1.1)			(1.8)
Effective tax rate		31.1	%		33.1	%
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		4.4			4.7
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.4)
Employee share-based awards1		(2.0)			-
Other, net		(0.9)			(1.5)
Effective tax rate		32.3	%		33.8	%

¹ CMSEnergy and Consumers elected to adopt ASU2016-09, Improvements to Employee Share-Based Payment Accounting, as of January1, 2016. For further details on the implementation of this standard, see Note1, New Accounting Standards.

Consumers Energy Company [Member]

Schedule Of Effective Income Tax Rate Reconciliation

Three Months Ended March 31	2016			2015
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		4.1			4.8
Accelerated flow-through of regulatory tax benefits		(4.7)			(4.9)
Employee share-based awards1		(2.2)			-
Other, net		(1.1)			(1.8)
Effective tax rate		31.1	%		33.1	%
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		4.4			4.7
Accelerated flow-through of regulatory tax benefits		(4.2)			(4.4)
Employee share-based awards1		(2.0)			-
Other, net		(0.9)			(1.5)
Effective tax rate		32.3	%		33.8	%

¹ CMSEnergy and Consumers elected to adopt ASU2016-09, Improvements to Employee Share-Based Payment Accounting, as of January1, 2016. For further details on the implementation of this standard, see Note1, New Accounting Standards.

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Earnings Per Share - CMS Energy (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share - CMS Energy [Abstract]

Basic And Diluted EPS Computations

In Millions, Except Per Share Amounts
Three Months Ended March 31	2016			2015
Income available to common stockholders
Net income available to common stockholders – basic and diluted		$	164		$	202
Average common shares outstanding
Weighted-average shares – basic			276.7			274.8
Add dilutive nonvested stock awards			1.2			0.9
Weighted-average shares – diluted			277.9			275.7
Net income per average common share available to common stockholders
Basic		$	0.59		$	0.73
Diluted			0.59			0.73

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2016

Schedule Of Financial Information By Reportable Segments

In Millions
Three Months Ended March 31	2016			2015
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Enterprises			48			60
Other reconciling items			30			23
Total operating revenue – CMS Energy		$	1,801		$	2,111
Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Total operating revenue – Consumers		$	1,723		$	2,028
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	91		$	94
Gas utility			81			121
Enterprises			6			7
Other reconciling items			(14)			(20)
Total net income available to common stockholders – CMS Energy		$	164		$	202
Consumers
Net income available to common stockholder
Electric utility		$	91		$	94
Gas utility			81			121
Total net income available to common stockholder – Consumers		$	172		$	215

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Enterprises			159			120
Other reconciling items			25			41
Total plant, property, and equipment, gross – CMS Energy		$	19,334		$	18,943
Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Other reconciling items			15			15
Total plant, property, and equipment, gross – Consumers		$	19,165		$	18,797
CMS Energy, including Consumers
Total assets
Electric utility1		$	12,743		$	12,660
Gas utility1			5,624			5,912
Enterprises			261			270
Other reconciling items			1,409			1,457
Total assets – CMS Energy2		$	20,037		$	20,299
Consumers
Total assets
Electric utility1		$	12,744		$	12,660
Gas utility1			5,624			5,912
Other reconciling items			54			63
Total assets – Consumers2		$	18,422		$	18,635

¹ Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

² CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03,  Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

Consumers Energy Company [Member]

Schedule Of Financial Information By Reportable Segments

In Millions
Three Months Ended March 31	2016			2015
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Enterprises			48			60
Other reconciling items			30			23
Total operating revenue – CMS Energy		$	1,801		$	2,111
Consumers
Operating revenue
Electric utility		$	1,013		$	1,033
Gas utility			710			995
Total operating revenue – Consumers		$	1,723		$	2,028
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	91		$	94
Gas utility			81			121
Enterprises			6			7
Other reconciling items			(14)			(20)
Total net income available to common stockholders – CMS Energy		$	164		$	202
Consumers
Net income available to common stockholder
Electric utility		$	91		$	94
Gas utility			81			121
Total net income available to common stockholder – Consumers		$	172		$	215

In Millions
	March 31, 2016			December 31, 2015
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Enterprises			159			120
Other reconciling items			25			41
Total plant, property, and equipment, gross – CMS Energy		$	19,334		$	18,943
Consumers
Plant, property, and equipment, gross
Electric utility1		$	13,331		$	13,059
Gas utility1			5,819			5,723
Other reconciling items			15			15
Total plant, property, and equipment, gross – Consumers		$	19,165		$	18,797
CMS Energy, including Consumers
Total assets
Electric utility1		$	12,743		$	12,660
Gas utility1			5,624			5,912
Enterprises			261			270
Other reconciling items			1,409			1,457
Total assets – CMS Energy2		$	20,037		$	20,299
Consumers
Total assets
Electric utility1		$	12,744		$	12,660
Gas utility1			5,624			5,912
Other reconciling items			54			63
Total assets – Consumers2		$	18,422		$	18,635

¹ Amounts include a portion of Consumers’ other common assets attributable to both the electric and gas utility businesses.

² CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03,  Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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New Accounting Standards (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Unamortized debt issuance costs	$ 40		$ 41
Income Tax Benefit	74	$ 100
New Accounting Pronouncement, Early Adoption, Effect [Member]
Income Tax Benefit	6
Retained Earnings (Accumulated Deficit) [Member]
Cumulative effect of change in accounting principle	33
Consumers Energy Company [Member]
Unamortized debt issuance costs	22		$ 23
Income Tax Benefit	82	$ 110
Consumers Energy Company [Member] | New Accounting Pronouncement, Early Adoption, Effect [Member]
Income Tax Benefit	$ 6

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Regulatory Matters (Narrative) (Details)	1 Months Ended
	Apr. 30, 2016 USD ($) item	Jan. 31, 2016 USD ($)	Nov. 30, 2015 USD ($)	Jul. 31, 2015 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Mar. 31, 2016 USD ($)	Feb. 29, 2016 USD ($)	Dec. 31, 2015 USD ($)
Public Utilities, General Disclosures [Line Items]
Regulatory liability current							$ 76,000,000		$ 82,000,000
Consumers Energy Company [Member]
Public Utilities, General Disclosures [Line Items]
Regulatory liability current							$ 76,000,000		82,000,000
Electric Rate Case [Member] | Consumers Energy Company [Member]
Public Utilities, General Disclosures [Line Items]
Annual rate increase requested						$ 163,000,000
Rate of return on equity requested						10.70%
Annual rate increase self-implemented					$ 110,000,000
Rate of return on equity authorized			10.30%
Temporary rate increase			$ 165,000,000
Electric Rate Case [Member] | Consumers Energy Company [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Annual rate increase authorized	$ 126,000,000
Number of units retired | item	7
Electric Rate Case [Member] | Self-Implemented Rate Refunds [Member] | Consumers Energy Company [Member]
Public Utilities, General Disclosures [Line Items]
Regulatory liability current								$ 0
Gas Rate Case [Member] | Consumers Energy Company [Member]
Public Utilities, General Disclosures [Line Items]
Annual rate increase requested				$ 85,000,000
Rate of return on equity requested				10.70%
Annual rate increase self-implemented		$ 60,000,000
Gas Rate Case [Member] | Consumers Energy Company [Member] | Subsequent Event [Member]
Public Utilities, General Disclosures [Line Items]
Annual rate increase authorized	$ 40,000,000
Energy Optimization Plan Incentive [Member] | Consumers Energy Company [Member]
Public Utilities, General Disclosures [Line Items]
Requested recovery/collection									$ 18,000,000

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Contingencies And Commitments (Contingencies And Commitments) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($) item lawsuit	Dec. 31, 2015 USD ($)
Loss Contingencies [Line Items]
Regulatory assets	$ 1,827	$ 1,840
Consumers Energy Company [Member]
Loss Contingencies [Line Items]
Regulatory assets	$ 1,827	$ 1,840
Bay Harbor [Member]
Loss Contingencies [Line Items]
Environmental remediation permit renewal term	5 years
Demand for payment by USEPA	$ 8
Accrual for environmental loss contingencies	$ 54
Discounted projected costs rate	4.34%
Remaining undiscounted obligation amount	$ 69
Accrual for environmental loss contingencies, inflation rate	1.00%
CERCLA Liability [Member] | Consumers Energy Company [Member]
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 3
Remediation and other response activity costs, minimum	3
Remediation and other response activity costs, maximum	8
Manufactured Gas Plant [Member] | Consumers Energy Company [Member]
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 114
Discounted projected costs rate	2.57%
Remaining undiscounted obligation amount	$ 130
Number of former MGPs | item	23
Regulatory assets	$ 145
Authorized recovery, collection period	10 years
Accrual for environmental loss contingencies, inflation rate	2.50%
Electric Utility [Member] | NREPA [Member] | Consumers Energy Company [Member]
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	$ 3
Remediation and other response activity costs, minimum	3
Remediation and other response activity costs, maximum	5
Gas Utility [Member] | NREPA [Member] | Consumers Energy Company [Member]
Loss Contingencies [Line Items]
Accrual for environmental loss contingencies	1
Remediation and other response activity costs, maximum	3
Equatorial Guinea Tax Claim [Member]
Loss Contingencies [Line Items]
Foreign government tax claim on sale	$ 152
Class Action Lawsuits [Member]
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit	4
Individual Lawsuits [Member]
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit	1

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Contingencies And Commitments (Expected Remediation Cost By Year) (Details) $ in Millions	Mar. 31, 2016 USD ($)
Manufactured Gas Plant [Member] | Consumers Energy Company [Member]
Site Contingency [Line Items]
Undiscounted amount due within one year	$ 15
Undiscounted amount due within two year	20
Undiscounted amount due within third year	11
Undiscounted amount due within fourth year	14
Undiscounted amount due within five year	19
Bay Harbor [Member]
Site Contingency [Line Items]
Undiscounted amount due within one year	6
Undiscounted amount due within two year	5
Undiscounted amount due within third year	4
Undiscounted amount due within fourth year	4
Undiscounted amount due within five year	$ 4

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Contingencies And Commitments (Guarantees) (Details) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Guarantor Obligations [Line Items]
Interest expense reduction		$ (7)	$ (6)
Interest income		1	1
Consumers Energy Company [Member]
Guarantor Obligations [Line Items]
Interest expense reduction		(3)	(3)
Interest income		$ 1	$ 1
Consumers Energy Company [Member] | Settlement with Taxing Authority [Member]
Guarantor Obligations [Line Items]
Tax examination refund				$ 37
PPE reduction resulting from tax refund				19
Interest expense reduction				12
Interest income				$ 6
Guarantees [Member]
Guarantor Obligations [Line Items]
Guarantee Description	[1]	Guarantees2
Expiration Date	[1]	Indefinite
Maximum obligation	[1]	$ 49
Guarantees [Member] | Consumers Energy Company [Member]
Guarantor Obligations [Line Items]
Guarantee Description	[1]	Gurarantee2
Expiration Date	[1]	Indefinite
Maximum obligation	[1]	$ 30
Indemnity Obligations From Asset Sales And Other Agreements [Member]
Guarantor Obligations [Line Items]
Guarantee Description	[2]	Indemnity obligations from asset sales   and other agreements1
Expiration Date	[2]	Indefinite
Maximum obligation	[2]	$ 153
Carrying Amount	[2]	7
Tax And Other Indemnity Obligations [Member] | Consumers Energy Company [Member] | Maximum [Member]
Guarantor Obligations [Line Items]
Carrying Amount		$ 1

[1] At Consumers, this obligation comprises a guarantee provided to the DOE in connection with a settlement agreement regarding damages resulting from the DOE's failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers. At CMS Energy, the guarantee obligations comprise Consumers' guarantee to the DOE and CMS Energy's 1994 guarantee of non-recourse revenue bonds issued by Genesee.

[2] These obligations arose from stock and asset sale agreements under which CMS Energy or a subsidiary of CMS Energy indemnified the purchaser for losses resulting from various matters, primarily claims related to taxes. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

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Financings And Capitalization (Narrative) (Details) - USD ($)		1 Months Ended	3 Months Ended
		Apr. 30, 2016	Mar. 31, 2016
Financing And Capitalization [Line Items]
Limitation on payment of stock dividends			$ 4,100,000,000
Common stock dividends from Consumers			155,000,000
Aggregate sales price of an equity offering program			100,000,000
Term Loan [Member] | Subsequent Event [Member]
Financing And Capitalization [Line Items]
Debt issuance		$ 180,000,000
Debt instrument, extension term		1 year
Consumers Energy Company [Member]
Financing And Capitalization [Line Items]
Unrestricted retained earnings			902,000,000
Consumers Energy Company [Member] | Commercial Paper [Member]
Financing And Capitalization [Line Items]
Short-term debt, authorized borrowings			500,000,000
Revolving Credit Facilities May 27, 2020 [Member] | CMS Energy [Member]
Financing And Capitalization [Line Items]
Amount of Facility	[1]		550,000,000
Revolving Credit Facilities May 27, 2020 [Member] | Consumers Energy Company [Member]
Financing And Capitalization [Line Items]
Amount of Facility	[2]		$ 650,000,000

[1] During the three months ended March 31, 2016, CMS Energy's average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent. Obligations under this facility are secured by Consumers common stock.

[2] Obligations under this facility are secured by first mortgage bonds of Consumers.

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Financings And Capitalization (Revolving Credit Facilities) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Revolving Credit Facilities May 27, 2020 [Member] | CMS Energy [Member]
Line of Credit Facility [Line Items]
Expiration Date	May 27, 2020	[1]
Amount of Facility	$ 550	[1]
Amount Borrowed		[1]
Letters of Credit Outstanding	$ 1	[1]
Amount Available	549	[1]
Average borrowings	$ 10
Weighted average interest rate	1.68%
Revolving Credit Facilities May 27, 2020 [Member] | Consumers Energy Company [Member]
Line of Credit Facility [Line Items]
Expiration Date	May 27, 2020	[2]
Amount of Facility	$ 650	[2]
Amount Borrowed		[2]
Letters of Credit Outstanding	$ 7	[2]
Amount Available	$ 643	[2]
Revolving Credit Facilities November 23, 2017 [Member] | Consumers Energy Company [Member]
Line of Credit Facility [Line Items]
Expiration Date	Nov. 23, 2017	[2]
Amount of Facility	$ 250	[2]
Amount Borrowed		[2]
Letters of Credit Outstanding		[2]
Amount Available	$ 250	[2]
Revolving Credit Facilities May 9, 2018 [Member] | Consumers Energy Company [Member]
Line of Credit Facility [Line Items]
Expiration Date	May 09, 2018	[2]
Amount of Facility	$ 30	[2]
Amount Borrowed		[2]
Letters of Credit Outstanding	$ 30	[2]
Amount Available		[2]

[1] During the three months ended March 31, 2016, CMS Energy's average borrowings totaled $10 million with a weighted-average interest rate of 1.68 percent. Obligations under this facility are secured by Consumers common stock.

[2] Obligations under this facility are secured by first mortgage bonds of Consumers.

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Financings And Capitalization (Issuance Of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	4 Months Ended	12 Months Ended
	Mar. 31, 2016	Jul. 31, 2015	Mar. 31, 2016
Financings And Capitalization [Abstract]
Number of Shares Issued	1,449,171	888,610	2,337,781
Average Price Per Share	$ 41.40	$ 33.76	$ 38.50
Proceeds	$ 60	$ 30	$ 90

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Fair Value Measurements (Assets And Liabilties Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	[1]	$ 85	$ 158
Restricted cash equivalents	[1]	28	19
Nonqualified deferred compensation plan assets	[1]	10	10
Commodity contracts	[1]	1	1
Total	[1]	270	336
Nonqualified deferred compensation plan liabilities	[1]	10	10
Total	[1]	10	10
Consumers Energy Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash equivalents	[1]	28	19
Nonqualified deferred compensation plan assets	[1]	7	7
Commodity contracts	[1]	1	1
Total	[1]	175	162
Nonqualified deferred compensation plan liabilities	[1]	7	7
Total	[1]	7	7
DB SERP [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	[1]	1	2
DB SERP [Member] | Consumers Energy Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash equivalents	[1]	1	2
DB SERP [Member] | Mutual Fund [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale - Fair Value	[1]	145	146
DB SERP [Member] | Mutual Fund [Member] | Consumers Energy Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale - Fair Value	[1]	104	104
CMS Energy Common Stock [Member] | Consumers Energy Company [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available for sale - Fair Value	[1]	$ 34	$ 29

[1] All assets and liabilities were classified as Level 1 with the exception of commodity contracts, which were classified as Level 3 and which were insignificant at March 31, 2016 and December 31, 2015.

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Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Financial Instruments [Line Items]
Portion of long-term debt supported by third-party credit enhancements	$ 103	$ 103
Consumers Energy Company [Member]
Financial Instruments [Line Items]
Portion of long-term debt supported by third-party credit enhancements	$ 103	$ 103

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Financial Instruments (Schedule Of Carrying Amounts And Fair Values Of Financial Instruments) (Details) - USD ($) $ in Millions		Mar. 31, 2016	Dec. 31, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other liabilities current		$ 118	$ 142
Current portion of long-term debt		929	684
DIG Note Payable [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other liabilities current		1	1
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity - Fair Value		13	11
Long-term payable, Fair Value	[1]	14	14
Long-term debt, Fair Value	[2]	9,099	9,084
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity - Fair Value		13	11
Long-term payable, Fair Value	[1]	15	14
Long-term debt, Fair Value	[2]	9,841	9,599
Consumers Energy Company [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Other liabilities current		87	109
Current portion of long-term debt		448	198
Consumers Energy Company [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, Fair Value	[3]	5,382	5,381
Consumers Energy Company [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, Fair Value	[3]	5,853	5,684
EnerBank [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Current notes receivable		151	144
EnerBank [Member] | Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, Fair Value	[4]	1,175	1,161
EnerBank [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, Fair Value	[4]	$ 1,256	$ 1,228
Fair Value, Inputs, Level 1 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity - Fair Value
Long-term payable, Fair Value	[1]
Long-term debt, Fair Value	[2]
Fair Value, Inputs, Level 1 [Member] | Consumers Energy Company [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, Fair Value	[3]
Fair Value, Inputs, Level 1 [Member] | EnerBank [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, Fair Value	[4]
Fair Value, Inputs, Level 2 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Securities held to maturity - Fair Value		$ 13	$ 11
Long-term debt, Fair Value	[2]	8,856	8,648
Fair Value, Inputs, Level 2 [Member] | Consumers Energy Company [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, Fair Value	[3]	4,868	4,733
Fair Value, Inputs, Level 3 [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term payable, Fair Value	[1]	15	14
Long-term debt, Fair Value	[2]	985	951
Fair Value, Inputs, Level 3 [Member] | Consumers Energy Company [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term debt, Fair Value	[3]	985	951
Fair Value, Inputs, Level 3 [Member] | EnerBank [Member] | Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Notes receivable, Fair Value	[4]	$ 1,256	$ 1,228

[1] Includes current portion of long-term payable of $1 million at March 31, 2016 and December 31, 2015.

[2] Includes current portion of long-term debt of $929 million at March 31, 2016 and $684 million at December 31, 2015.

[3] Includes current portion of long-term debt of $448 million at March 31, 2016 and $198 million at December 31, 2015.

[4] Includes current portion of notes receivable of $151 million at March 31, 2016 and $144 million at December 31, 2015.

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Financial Instruments (Schedule Of Investment Securities) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Debt Securities [Member]
Investment Securities [Line Items]
Held to maturity securities - Cost	$ 13	$ 11
Held to maturity securities - Unrealized Gains
Held to maturity securities - Unrealized Losses
Held to maturity securities - Fair Value	$ 13	$ 11
CMS Energy Common Stock [Member] | Consumers Energy Company [Member]
Investment Securities [Line Items]
Available for sale - Cost	4	4
Available for sale - Unrealized Gains	$ 30	$ 25
Available for sale - Unrealized Losses
Available for sale - Fair Value	$ 34	$ 29
DB SERP [Member] | Mutual Fund [Member]
Investment Securities [Line Items]
Available for sale - Cost	$ 152	$ 152
Available for sale - Unrealized Gains
Available for sale - Unrealized Losses	$ 7	$ 6
Available for sale - Fair Value	145	146
DB SERP [Member] | Mutual Fund [Member] | Consumers Energy Company [Member]
Investment Securities [Line Items]
Available for sale - Cost	$ 109	$ 108
Available for sale - Unrealized Gains
Available for sale - Unrealized Losses	$ 5	$ 4
Available for sale - Fair Value	$ 104	$ 104

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Notes Receivable (Narrative) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current notes receivable	$ 135	$ 128
EnerBank notes receivable held for sale	16	16
EnerBank [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
EnerBank notes receivable held for sale	16	16
Unearned income	83	82
Delinquent loans	8	8
Loans modified as troubled debt restructurings	$ 1	$ 1

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Notes Receivable (Schedule Of Current And Non-Current Notes Receivable) (Details) - USD ($) $ in Millions	Mar. 31, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current notes receivable	$ 135	$ 128
EnerBank notes receivable held for sale	16	16
Total notes receivable	1,175	1,161
EnerBank [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
EnerBank notes receivable held for sale	16	16
Noncurrent notes receivable	1,024	1,017
Receivables, Net Of Allowance For Loan Losses [Member] | EnerBank [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Current notes receivable	$ 135	$ 128

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Retirement Benefits (Narrative) (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
DB Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease in service cost and interest expense	$ 6
OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease in service cost and interest expense	3
Consumers Energy Company [Member] | DB Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease in service cost and interest expense	6
Consumers Energy Company [Member] | OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Decrease in service cost and interest expense	$ 3

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Retirement Benefits (Schedule Of Net Benefit Costs) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
DB Pension Plan [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 11	$ 12
Interest expense	21	25
Expected return on plan assets	(37)	(34)
Amortization of Net loss	17	23
Amortization of Prior service cost (credit)	1
Net periodic cost (credit)	13	26
DB Pension Plan [Member] | Consumers Energy Company [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	10	12
Interest expense	21	25
Expected return on plan assets	(36)	(33)
Amortization of Net loss	17	22
Amortization of Prior service cost (credit)	1
Net periodic cost (credit)	13	26
OPEB [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	5	6
Interest expense	12	15
Expected return on plan assets	(22)	(23)
Amortization of Net loss	5	5
Amortization of Prior service cost (credit)	(10)	(10)
Net periodic cost (credit)	(10)	(7)
OPEB [Member] | Consumers Energy Company [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	4	6
Interest expense	11	14
Expected return on plan assets	(20)	(22)
Amortization of Net loss	6	6
Amortization of Prior service cost (credit)	(10)	(10)
Net periodic cost (credit)	$ (9)	$ (6)

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Income Taxes (Details)		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015
U.S. federal income tax rate		35.00%	35.00%
State and local income taxes, net of federal effect		4.10%	4.80%
Accelerated flow-through of regulatory tax benefits		(4.70%)	(4.90%)
Employee share-based awards	[1]	(2.20%)
Other, net		(1.10%)	(1.80%)
Effective tax rate		31.10%	33.10%
Consumers Energy Company [Member]
U.S. federal income tax rate		35.00%	35.00%
State and local income taxes, net of federal effect		4.40%	4.70%
Accelerated flow-through of regulatory tax benefits		(4.20%)	(4.40%)
Employee share-based awards	[1]	(2.00%)
Other, net		(0.90%)	(1.50%)
Effective tax rate		32.30%	33.80%

[1] CMS Energy and Consumers elected to adopt ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, as of January 1, 2016. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

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Earnings Per Share - CMS Energy (Basic And Diluted EPS Computations) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Earnings Per Share - CMS Energy [Abstract]
Net income available to common stockholders	$ 164	$ 202
Weighted average shares - basic	276.7	274.8
Add dilutive non-vested stock awards	1.2	0.9
Weighted average shares - diluted	277.9	275.7
Basic	$ 0.59	$ 0.73
Diluted	$ 0.59	$ 0.73

XML

Reportable Segments (Details) - USD ($) $ in Millions		3 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Segment Reporting Information [Line Items]
Operating Revenue		$ 1,801	$ 2,111
Depreciation and amortization		238	222
Income (loss) from equity method investees		4	4
Interest charges		106	101
Income tax expense (benefit)		74	100
Net income available to common stockholders		164	202
Plant, property, and equipment, gross		19,334		$ 18,943
Investments in equity method investees		64		64
Total Assets	[1]	20,037		20,299
Consumers Energy Company [Member]
Segment Reporting Information [Line Items]
Operating Revenue		1,723	2,028
Depreciation and amortization		237	220
Interest charges		67	65
Income tax expense (benefit)		82	110
Net income available to common stockholders		172	215
Plant, property, and equipment, gross		19,165		18,797
Total Assets	[1]	18,422		18,635
Electric Utility [Member]
Segment Reporting Information [Line Items]
Operating Revenue		1,013	1,033
Net income available to common stockholders		91	94
Plant, property, and equipment, gross	[2]	13,331		13,059
Total Assets	[2]	12,743		12,660
Electric Utility [Member] | Consumers Energy Company [Member]
Segment Reporting Information [Line Items]
Operating Revenue		1,013	1,033
Net income available to common stockholders		91	94
Plant, property, and equipment, gross	[2]	13,331		13,059
Total Assets	[2]	12,744		12,660
Gas Utility [Member]
Segment Reporting Information [Line Items]
Operating Revenue		710	995
Net income available to common stockholders		81	121
Plant, property, and equipment, gross	[2]	5,819		5,723
Total Assets	[2]	5,624		5,912
Gas Utility [Member] | Consumers Energy Company [Member]
Segment Reporting Information [Line Items]
Operating Revenue		710	995
Net income available to common stockholders		81	121
Plant, property, and equipment, gross	[2]	5,819		5,723
Total Assets	[2]	5,624		5,912
Enterprises [Member]
Segment Reporting Information [Line Items]
Operating Revenue		48	60
Net income available to common stockholders		6	7
Plant, property, and equipment, gross		159		120
Total Assets		261		270
Other [Member]
Segment Reporting Information [Line Items]
Operating Revenue		30	23
Net income available to common stockholders		(14)	$ (20)
Plant, property, and equipment, gross		25		41
Total Assets		1,409		1,457
Other [Member] | Consumers Energy Company [Member]
Segment Reporting Information [Line Items]
Plant, property, and equipment, gross		15		15
Total Assets		$ 54		$ 63

[1] CMS Energy and Consumers changed the reporting of debt issuance costs on their consolidated balance sheets in accordance with ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs, as of January 1, 2016, and retrospectively adjusted prior-period amounts for comparability. For further details on the implementation of this standard, see Note 1, New Accounting Standards.

[2] Amounts include a portion of Consumers' other common assets attributable to both the electric and gas utility businesses.