Asset Retirement Obligations

12 Months Ended

Dec. 31, 2011

17: ASSET RETIREMENT OBLIGATIONS

CMS Energy and Consumers record the fair value of the cost to remove assets at the end of their useful lives, if there is a legal obligation to remove them. No market risk premiums were included in CMS Energy's and Consumers' ARO fair value estimates since reasonable estimates could not be made. If a five percent market risk premium were assumed, CMS Energy's and Consumers' ARO liabilities at December 31, 2011 would increase by $13 million and at December 31, 2010 would increase by $12 million.

If a reasonable estimate of fair value cannot be made in the period in which the ARO is incurred, such as for assets with indeterminate lives, the liability is recognized when a reasonable estimate of fair value can be made. CMS Energy and Consumers have not recorded liabilities for assets that have insignificant cumulative disposal costs, such as substation batteries.

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:


Company and ARO Description	In-Service Date	Long-Lived Assets
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	Various	Gas transmission and storage
Closure of coal ash disposal areas	Various	Generating plants coal ash areas
Closure of wells at gas storage fields	Various	Gas storage fields
Indoor gas services equipment relocations	Various	Gas meters located inside structures
Asbestos abatement	1973	Electric and gas utility plant
Gas distribution cut, purge, and cap	Various	Gas distribution mains and services
CONSUMERS
Closure of coal ash disposal areas	Various	Generating plants coal ash areas
Closure of wells at gas storage fields	Various	Gas storage fields
Indoor gas services equipment relocations	Various	Gas meters located inside structures
Asbestos abatement	1973	Electric and gas utility plant
Gas distribution cut, purge, and cap	Various	Gas distribution mains and services

No assets have been restricted for purposes of settling AROs.

Presented in the following tables are the changes in CMS Energy's and Consumers' ARO liabilities:


In Millions
Company and ARO Description		ARO Liability 12/31/10		Incurred			Settled			Accretion		Cash flow Revisions		ARO Liability 12/31/11
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	$	1	$	-		$	-		$	-	$	-	$	1
Consumers		244		(2	)		(7	)		18		-		253
Total CMS Energy	$	245	$	(2	)	$	(7	)	$	18	$	-	$	254
CONSUMERS
Coal ash disposal areas	$	66	$	-		$	(2	)	$	6	$	-	$	70
Wells at gas storage fields		1		-			-			-		-		1
Indoor gas services relocations		1		-			(1	)		-		-		-
Asbestos abatement		40		-			(1	)		3		-		42
Gas distribution cut, purge, and cap		136		(2	)		(3	)		9		-		140
Total Consumers	$	244	$	(2	)	$	(7	)	$	18	$	-	$	253


In Millions
Company and ARO Description		ARO Liability 12/31/09		Incurred		Settled			Accretion		Cash flow Revisions		ARO Liability 12/31/10
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	$	1	$	-	$	-		$	-	$	-	$	1
Consumers		228		6		(7	)		17		-		244
Total CMS Energy	$	229	$	6	$	(7	)	$	17	$	-	$	245
CONSUMERS
Coal ash disposal areas	$	64	$	-	$	(4	)	$	6	$	-	$	66
Wells at gas storage fields		1		-		-			-		-		1
Indoor gas services relocations		1		-		-			-		-		1
Asbestos abatement		38		-		(1	)		3		-		40
Gas distribution cut, purge, and cap		124		6		(2	)		8		-		136
Total Consumers	$	228	$	6	$	(7	)	$	17	$	-	$	244

Consumers Energy Company [Member]

Asset Retirement Obligations

17: ASSET RETIREMENT OBLIGATIONS

Presented below are the categories of assets that CMS Energy and Consumers have legal obligations to remove at the end of their useful lives and for which they have an ARO liability recorded:


Company and ARO Description	In-Service Date	Long-Lived Assets
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	Various	Gas transmission and storage
Closure of coal ash disposal areas	Various	Generating plants coal ash areas
Closure of wells at gas storage fields	Various	Gas storage fields
Indoor gas services equipment relocations	Various	Gas meters located inside structures
Asbestos abatement	1973	Electric and gas utility plant
Gas distribution cut, purge, and cap	Various	Gas distribution mains and services
CONSUMERS
Closure of coal ash disposal areas	Various	Generating plants coal ash areas
Closure of wells at gas storage fields	Various	Gas storage fields
Indoor gas services equipment relocations	Various	Gas meters located inside structures
Asbestos abatement	1973	Electric and gas utility plant
Gas distribution cut, purge, and cap	Various	Gas distribution mains and services

No assets have been restricted for purposes of settling AROs.

Presented in the following tables are the changes in CMS Energy's and Consumers' ARO liabilities:


In Millions
Company and ARO Description		ARO Liability 12/31/10		Incurred			Settled			Accretion		Cash flow Revisions		ARO Liability 12/31/11
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	$	1	$	-		$	-		$	-	$	-	$	1
Consumers		244		(2	)		(7	)		18		-		253
Total CMS Energy	$	245	$	(2	)	$	(7	)	$	18	$	-	$	254
CONSUMERS
Coal ash disposal areas	$	66	$	-		$	(2	)	$	6	$	-	$	70
Wells at gas storage fields		1		-			-			-		-		1
Indoor gas services relocations		1		-			(1	)		-		-		-
Asbestos abatement		40		-			(1	)		3		-		42
Gas distribution cut, purge, and cap		136		(2	)		(3	)		9		-		140
Total Consumers	$	244	$	(2	)	$	(7	)	$	18	$	-	$	253


In Millions
Company and ARO Description		ARO Liability 12/31/09		Incurred		Settled			Accretion		Cash flow Revisions		ARO Liability 12/31/10
CMS ENERGY, INCLUDING CONSUMERS
Close gas treating plant and gas wells	$	1	$	-	$	-		$	-	$	-	$	1
Consumers		228		6		(7	)		17		-		244
Total CMS Energy	$	229	$	6	$	(7	)	$	17	$	-	$	245
CONSUMERS
Coal ash disposal areas	$	64	$	-	$	(4	)	$	6	$	-	$	66
Wells at gas storage fields		1		-		-			-		-		1
Indoor gas services relocations		1		-		-			-		-		1
Asbestos abatement		38		-		(1	)		3		-		40
Gas distribution cut, purge, and cap		124		6		(2	)		8		-		136
Total Consumers	$	228	$	6	$	(7	)	$	17	$	-	$	244

- Definition

The entire disclosure for an asset retirement obligation and the associated long-lived asset. An asset retirement obligation is a legal obligation associated with the disposal or retirement from service of a tangible long-lived asset that results from the acquisition, construction or development, or the normal operations of a long-lived asset, except for certain obligations of lessees.

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