10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _____to_____

Commission File Number	Registrant; State of Incorporation; Address; and Telephone Number	IRS Employer 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

Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
CMS Energy Corporation Common Stock, $0.01 par value	CMS	New York Stock Exchange
CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078	CMSA	New York Stock Exchange
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078	CMSC	New York Stock Exchange
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079	CMSD	New York Stock Exchange
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series	CMS-PB	New York Stock Exchange

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	☒	No	☐	Consumers Energy Company:	Yes	☒	No	☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).
CMS Energy Corporation:	Yes	☒	No	☐	Consumers Energy Company:	Yes	☒	No	☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.
CMS Energy Corporation:		Consumers Energy Company:
Large accelerated filer	☒	Large accelerated filer	☐
Non‑accelerated filer	☐	Non‑accelerated filer	☒
Accelerated filer	☐	Accelerated filer	☐
Smaller reporting company	☐	Smaller reporting company	☐
Emerging growth company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
CMS Energy Corporation:	☐	Consumers Energy Company:	☐

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	☐	No	☒	Consumers Energy Company:	Yes	☐	No	☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock at July 7, 2020:
CMS Energy Corporation:
CMS Energy Common Stock, $0.01 par value (including 12,322 shares owned by Consumers Energy)	286,280,694
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 June 30, 2020

Table of Contents

Glossary		2
Filing Format		8
Available Information		8
Forward-Looking Statements and Information		8
Part I—Financial Information		13
Item 1.	Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	90
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	90
Item 4.	Controls and Procedures	90
Part II—Other Information		91
Item 1.	Legal Proceedings	91
Item 1A.	Risk Factors	91
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	92
Item 3.	Defaults Upon Senior Securities	93
Item 4.	Mine Safety Disclosures	93
Item 5.	Other Information	93
Item 6.	Exhibits	95
Signatures		97

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Glossary

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

2016 Energy Law

Michigan’s Public Acts 341 and 342 of 2016, which became effective in April 2017

2019 Form 10‑K

Each of CMS Energy’s and Consumers’ Annual Report on Form 10‑K for the year ended December 31, 2019

ABATE

The Association of Businesses Advocating Tariff Equity

ARO

Asset retirement obligation

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

CARES Act

Coronavirus Aid, Relief, and Economic Security Act of 2020

CCR

Coal combustion residual

CDC

U.S. Centers for Disease Control and Prevention

CEO

Chief Executive Officer

CERCLA

The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended

CFO

Chief Financial Officer

Clean Air Act

Federal Clean Air Act of 1963, as amended

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Clean Energy Plan

Consumers’ long‑term strategy for delivering clean, reliable, and affordable energy to its customers through the increased use of energy efficiency and customer demand management programs, additional renewable energy generation, and conservation voltage reduction

Clean Water Act

Federal Water Pollution Control Act of 1972, as amended

CMS Energy

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

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

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

COVID‑19

Coronavirus disease 2019, a respiratory illness that was declared a pandemic in March 2020 and to which public and private agencies have responded by instituting social-distancing and other measures designed to slow the spread of the disease

CSAPR

The Cross‑State Air Pollution Rule of 2011, as amended

DB Pension Plans

Defined benefit pension plans of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries

DB SERP

Defined Benefit Supplemental Executive Retirement Plan

DIG

Dearborn Industrial Generation, L.L.C., a wholly owned subsidiary of Dearborn Industrial Energy, L.L.C., a wholly owned subsidiary of CMS Energy

Dodd‑Frank Act

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

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EGLE

The Michigan Department of Environment, Great Lakes, and Energy, formerly known as the Michigan Department of Environmental Quality

EnerBank

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

energy waste reduction

The reduction of energy consumption through energy efficiency and demand‑side energy conservation, as established under the 2016 Energy Law

EPA

U.S. Environmental Protection Agency

EPS

Earnings per share

Exchange Act

Securities Exchange Act of 1934

FDIC

Federal Deposit Insurance Corporation

FERC

The Federal Energy Regulatory Commission

FICO

Fair Isaac Corporation, a non-affiliated company providing data analytic services, with a focus on credit scoring services

FTR

Financial transmission right

GAAP

U.S. Generally Accepted Accounting Principles

GCR

Gas cost recovery

IRP

Integrated resource plan

IRS

Internal Revenue Service

kWh

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

LIBOR

The London Interbank Offered Rate

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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

MCV Partnership

Midland Cogeneration Venture Limited Partnership

MCV PPA

PPA between Consumers and the MCV Partnership

MD&A

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

METC

Michigan Electric Transmission Company, LLC, a non‑affiliated company

MGP

Manufactured gas plant

Michigan Mercury Rule

Michigan Air Pollution Control Rules of 2009, as amended, Part 15: Emission Limitations and Prohibitions—Mercury

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

NPDES

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

NREPA

Part 201 of Michigan’s Natural Resources and Environmental Protection Act of 1994, as amended

5

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

OSHA

Occupational Safety and Health Administration

PCB

Polychlorinated biphenyl

PHMSA

The U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration

PPA

Power purchase agreement

PSCR

Power supply cost recovery

PURPA

The Public Utility Regulatory Policies Act of 1978

RCRA

The Federal Resource Conservation and Recovery Act of 1976

REC

Renewable energy credit

ROA

Retail Open Access, which allows electric generation customers to choose alternative electric suppliers pursuant to Michigan’s Public Acts 141 and 142 of 2000, as amended

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

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

TCJA

Tax Cuts and Jobs Act of 2017

6

UWUA

Utility Workers Union of America, AFL-CIO

7

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, EnerBank, 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, EnerBank, 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 2019 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 the COVID‑19 pandemic and the related economic disruption on CMS Energy’s and Consumers’ revenues, expenses, uncollectible accounts, energy efficiency programs, pension funding, PSCR and GCR costs, capital investment programs, cash flows, liquidity, maintenance of existing assets, and other operating expenses

• 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

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• 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 or challenges to 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 policy, ROA, PURPA, infrastructure integrity or security, gas pipeline safety, gas pipeline capacity, energy waste reduction, the environment, regulation or deregulation, reliability, health care reforms (including comprehensive health care reform enacted in 2010), taxes, accounting matters, climate change, air emissions, renewable energy, 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; failures of equipment or materials; electric transmission and distribution or gas pipeline system constraints; interconnection requirements; and changes in trade policies or regulations

• increases in demand for renewable energy 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 EGLE, the EPA, and/or the U.S. Army Corps of Engineers, and potential environmental remediation costs associated with these interpretations or decisions, including those that may affect Consumers’ routine maintenance, repair, and replacement 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 potential effects of a future transition from LIBOR to an alternative reference interest rate in the credit and capital markets

• the investment performance of the assets of CMS Energy’s and Consumers’ pension and benefit plans, the discount rates, mortality assumptions, and future medical costs 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

9

• 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 electric suppliers, increased use of distributed generation, or energy waste reduction and storage

• adverse consequences of employee, director, or third‑party fraud or non‑compliance with codes of conduct or with laws or regulations

• 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

• the impact of credit markets, economic conditions, increased competition, and any new banking and consumer protection 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 interest rates and 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, acquisition of property rights, and government approvals

• potential disruption to, interruption of, or other impacts on facilities, utility infrastructure, operations, or backup systems due to accidents, explosions, physical disasters, global pandemics, 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, reputational harm, 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

• potential disruption to, interruption or failure of, or other impacts on information technology backup or disaster recovery systems

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

• the ability to implement technology 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

10

• 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 (e.g., the adoption of Hypothetical Liquidation Book Value accounting for certain non‑regulated renewable energy projects)

• 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.

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Part I—Financial Information

Item 1.    Financial Statements

Index to Financial Statements

Management’s Discussion and Analysis of Financial Condition and Results of Operations		14
CMS Energy Consolidated Financial Statements		48
Consolidated Statements of Income (Unaudited)		48
Consolidated Statements of Comprehensive Income (Unaudited)		49
Consolidated Statements of Cash Flows (Unaudited)		51
Consolidated Balance Sheets (Unaudited)		52
Consolidated Statements of Changes in Equity (Unaudited)		54
Consumers Consolidated Financial Statements		56
Consolidated Statements of Income (Unaudited)		56
Consolidated Statements of Comprehensive Income (Unaudited)		57
Consolidated Statements of Cash Flows (Unaudited)		59
Consolidated Balance Sheets (Unaudited)		60
Consolidated Statements of Changes in Equity (Unaudited)		62
Notes to the Unaudited Consolidated Financial Statements		63
1:	New Accounting Standards	63
2:	Regulatory Matters	64
3:	Contingencies and Commitments	64
4:	Financings and Capitalization	70
5:	Fair Value Measurements	72
6:	Financial Instruments	75
7:	Notes Receivable	76
8:	Retirement Benefits	79
9:	Income Taxes	80
10:	Earnings Per Share—CMS Energy	81
11:	Revenue	82
12:	Cash and Cash Equivalents	87
13:	Reportable Segments	87
14:	Exit Activities	90

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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; CMS Enterprises, primarily a domestic independent power producer and marketer; and EnerBank, an industrial bank located in Utah. 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, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. EnerBank provides primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements.

CMS Energy and Consumers manage their businesses by the nature of services each provides. CMS Energy operates principally in four business segments: electric utility; gas utility; enterprises, its non‑utility operations and investments; and EnerBank. Consumers operates principally in two business segments: electric utility and gas utility. CMS Energy’s and Consumers’ businesses are affected primarily by:

• regulation and regulatory matters

• state and federal legislation

• economic conditions

• weather

• energy commodity prices

• interest rates

• their securities’ credit ratings

COVID‑19 Pandemic

CMS Energy and Consumers continue to respond to the public health emergency caused by the COVID‑19 pandemic by instituting measures consistent with guidance provided by local, state, and federal agencies. CMS Energy and Consumers maintain over 60 departmental business continuity plans; these plans were reviewed and enhanced in early 2020 to ensure readiness for the COVID-19 pandemic. CMS Energy and Consumers continue to take steps to protect the safety of employees, customers, and contractors, and have executed their business continuity plans to ensure the continued delivery of critical energy services. Additionally, CMS Energy and Consumers have mitigated the potential impact of the pandemic on their liquidity by completing financing transactions and reducing the need for external funding for the remainder of the year.

The COVID‑19 pandemic is a continually evolving situation. As a result of the pandemic, Consumers has experienced a decline in electric deliveries to commercial and industrial customers, offset partially by an

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increase in deliveries to residential customers. It has also experienced an increase in uncollectible accounts and workforce-related expenses, among other cost increases directly attributable to the pandemic. Consumers anticipates that these trends will continue in the near term. In April 2020, the MPSC issued an order authorizing Consumers to defer incremental uncollectible accounts expense associated with the pandemic.

Additionally, EnerBank anticipates it could experience slower lending growth, higher loan write-offs, and increased loan modifications in the future as a result of the pandemic. The companies cannot predict the long-term impact of the pandemic on their business, results of operations, financial condition, capital investment program, liquidity, and cash flows. More detailed discussion of the near-term impacts of and future uncertainties related to the COVID‑19 pandemic can be found throughout this MD&A and in Part II—Item 1A. Risk Factors.

The Triple Bottom Line

CMS Energy’s and Consumers’ purpose is to achieve world class performance while delivering hometown service. In support of this purpose, the companies employ the “Consumers Energy Way,” a lean operating model designed to improve safety, quality, cost, delivery, and employee morale.

CMS Energy and Consumers measure their progress toward the purpose by considering their impact on the “triple bottom line” of people, planet, and profit, which is underpinned by performance; this consideration takes into account not only the economic value that the companies create for customers and investors, but also their responsibility to social and environmental goals. The triple bottom line balances the interests of the companies’ employees, customers, suppliers, regulators, creditors, Michigan’s residents, the investment community, and other stakeholders, and it reflects the broader societal impacts of the companies’ activities.

Consumers’ Sustainability Report, which is available to the public, describes the company’s progress toward world class performance measured in the areas of people, planet, and profit.

People: The people element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to their employees, their customers, the residents of local communities in which the companies do business, and other stakeholders.

The safety of employees, customers, and the general public is 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. Over the last ten years, Consumers’ OSHA recordable incident rate has decreased by over 63 percent.

In response to the COVID‑19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health and safety of their co-workers, customers, and communities. CMS Energy and Consumers have aligned with CDC guidelines and executive orders issued by Michigan’s governor to

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protect their employees, customers, and contractors to ensure the continued delivery of critical energy services. To align with, and in addition to, these guidelines, CMS Energy and Consumers have:

• secured the supply chain necessary to provide front-line workers with appropriate personal protective equipment and cleaning supplies

• when necessary, sequestered employees with critical roles at generating plants, gas compression facilities, and electric control rooms

• implemented a 14‑day paid self-quarantine requirement for employees who are exhibiting symptoms of COVID-19 or who have come into contact with a person suspected to have COVID‑19

• prohibited business-related international travel and instituted a mandatory 14‑day work remote period for employees who return from personal travel to impacted areas

• required employees to work remotely when possible

• when necessary, reduced service at 13 direct payment offices to drop box and drive-through services only

• initially adjusted work to focus on emergent and critical activities such as electric outages, gas leaks, and other public safety and reliability work; as work restrictions have gradually lifted in Michigan, the companies have resumed normal work with safety measures in place

• contracted a chief medical officer to guide the companies’ response and provide rapid support and supplies for the workforce

• limited access to company facilities, enhanced cleaning protocols, and established a mask-wearing policy

• offered additional paid leave to employees to alleviate child care-related burdens and implemented other interim workforce policies to offer flexibility and reduce employee concerns

CMS Energy and Consumers also suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers. CMS Energy and Consumers remain committed to assisting customers who are experiencing difficulty paying their energy bill due to the pandemic.

CMS Energy and Consumers also place a high priority on customer value and on providing a hometown customer experience. Consumers’ customer-driven investment program is aimed at improving safety and increasing electric and gas reliability, which has resulted in measurable improvements in customer satisfaction.

Central to Consumers’ commitment to its customers are the initiatives it has undertaken to keep electricity and natural gas affordable, including:

• replacement of coal-fueled generation and PPAs with renewable energy and energy waste reduction and demand response programs

• targeted infrastructure investment to improve reliability and safety and to reduce maintenance costs

• information and control system efficiencies

• employee and retiree health care cost sharing

• workforce productivity enhancements

In addition, Consumers’ gas commodity costs declined by 62 percent from 2009 through 2019, due not only to a decrease in market prices but also to Consumers’ improvements to its gas infrastructure and optimization of its gas purchasing and storage strategy. These gas commodity savings are passed on to customers.

Planet: The planet element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to protect the environment. This commitment extends beyond compliance with various state and federal environmental, health, and safety laws and regulations. Management considers climate change

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and other environmental risks in the companies’ strategy development, business planning, and enterprise risk management processes.

CMS Energy and Consumers continue to focus on opportunities to protect the environment and to reduce their carbon footprint. As a result of actions already taken by CMS Energy and Consumers, the companies have:

• decreased their combined percentage of electric supply (self-generated and purchased) from coal by 18 percentage points since 2015

• reduced carbon dioxide emissions by over 35 percent since 2005

• reduced the amount of water used to generate electricity by over 35 percent since 2012

• reduced landfill waste disposal by over 1.3 million tons since 1992

• reduced methane emissions by 12 percent since 2012

Additionally, over the last 20 years, Consumers has reduced its sulfur dioxide, nitrogen oxide, particulate matter, and mercury emissions by over 90 percent.

The 2016 Energy Law:

• raised the renewable energy standard to 12.5 percent in 2019 and 15 percent in 2021; Consumers met the 12.5-percent requirement in 2019 with a combination of newly generated RECs and previously generated RECs carried over from prior years

• established a goal of 35 percent combined renewable energy and energy waste reduction by 2025; Consumers has achieved 22 percent of the combined renewable energy and energy waste reduction goal through 2019

• authorized incentives for demand response programs and expanded existing incentives for energy efficiency programs, referring to the combined initiatives as energy waste reduction programs

• established an integrated planning process for new generation resources

In 2019, the MPSC approved the IRP that Consumers filed in 2018, which details its Clean Energy Plan. Under its Clean Energy Plan, Consumers will meet the requirements of the 2016 Energy Law using its clean and lean strategy, which focuses on increasing the generation of renewable energy, helping customers use less energy, and offering demand response programs to reduce demand during critical peak times. Further, Consumers plans to replace its coal-fueled generation predominantly with investment in renewable energy, which will enable Consumers to meet and exceed the 2016 Energy Law renewable energy requirements and fulfill increasing customer demand for renewable energy. Through its Clean Energy Plan, Consumers expects to reduce carbon emissions of its owned generation by more than 90 percent from its 2005 levels by 2040. Additionally, the Clean Energy Plan will allow Consumers to achieve a breakthrough goal of at least 50 percent combined renewable energy and energy waste reduction by 2030.

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Presented in the following illustration is Consumers’ 2019 capacity portfolio and its future capacity portfolio as projected in the IRP. This illustration includes the effects of purchased capacity and energy waste reduction and uses the nameplate capacity of renewable energy sources:

The Clean Energy Plan lays the foundation for Consumers’ goal to achieve net-zero carbon emissions by 2040. As part of this goal, which was announced in February 2020, Consumers will significantly reduce its carbon emissions from its electric business and offset any remaining emissions through strategies including, but not limited to, carbon sequestration, landfill methane capture, and large-scale tree planting. The goal includes not only emissions from Consumers’ owned generation, but also emissions from the generation of power purchased through long-term PPAs and from the MISO energy market.

In addition to Consumers’ efforts to reduce the electric utility’s carbon footprint, it is also making efforts to reduce the gas utility’s methane footprint. In October 2019, Consumers set a goal of net‑zero methane emissions from its natural gas delivery system by 2030. Consumers’ Methane Reduction Plan, released in November 2019, outlines its plan to reach this net-zero emissions goal. Consumers plans to reduce methane emissions from its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be eliminated by purchasing and/or producing renewable natural gas.

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Additionally, to advance its environmental stewardship in Michigan and to minimize the impact of future regulations, Consumers announced the following five‑year targets during 2018:

• to reduce its water use by one billion gallons; during 2018 and 2019, Consumers reduced its water usage by over 400 million gallons

• to reduce the amount of waste taken to landfills by 35 percent; during 2018 and 2019, Consumers reduced its waste to landfills by ten percent

• to enhance, restore, or protect 5,000 acres of land; during 2018 and 2019, Consumers enhanced, restored, or protected over 2,200 acres of land

CMS Energy, through CMS Enterprises, continues to pursue further opportunities for the development of renewable generation projects. In June 2020, CMS Enterprises purchased development rights for a solar project in Hart Township, Michigan with a potential to develop up to 100 MW of solar capacity. In July 2020, CMS Enterprises purchased a 51-percent ownership interest in a 525-MW wind generation project being constructed in Coke County, Texas; the project is expected to become operational in August 2020.

CMS Energy and Consumers are monitoring numerous legislative, policy, and regulatory initiatives, including those to regulate greenhouse gases, and related litigation. While CMS Energy and Consumers cannot predict the outcome of these matters, which could have a material effect on the companies, they intend to continue to move forward with their clean and lean strategy.

Profit: The profit element of the triple bottom line represents CMS Energy’s and Consumers’ commitment to meeting their financial objectives and providing economic development opportunities and benefits in the communities in which they do business. CMS Energy’s and Consumers’ financial strength allows them to maintain solid investment-grade credit ratings and thereby reduce funding costs for the benefit of customers and investors, to preserve and create jobs, and to reinvest in the communities they serve.

For the six months ended June 30, 2020, CMS Energy’s net income available to common stockholders was $379 million, and diluted EPS were $1.33. This compares with net income available to common stockholders of $306 million and diluted EPS of $1.08 for the six months ended June 30, 2019. In 2020, electric and gas rate increases and lower operating and maintenance expenses were offset partially by lower gas sales due primarily to unfavorable weather in the first quarter. 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.

Consumers has experienced and anticipates it will continue to experience a decline in electric deliveries to commercial and industrial customers in the near term as a result of the COVID‑19 pandemic. Over the long term, Consumers expects weather-normalized electric deliveries over the next five years to decrease slightly and weather‑normalized gas deliveries to remain stable. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in electric and gas demand.

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Performance: Impacting the Triple Bottom Line

CMS Energy and Consumers remain committed to achieving world class performance while delivering hometown service. Leveraging the Consumers Energy Way, CMS Energy and Consumers accomplished the following during 2019:

• received approval of Consumers’ IRP, which supports the companies’ clean energy goals

• launched a three-year electric vehicle pilot program

• committed to spend $7.5 billion with Michigan businesses over the next five years; of that amount, $1.5 billion will be spent with diverse suppliers

• completed the deployment of automated gas meters in areas where Consumers provides only natural gas to customers, allowing for drive-by meter reading

• ranked the highest in customer satisfaction among large natural gas providers in the Midwest, according to a residential customer satisfaction study conducted by J.D. Power, a global marketing information company

CMS Energy and Consumers will continue to utilize the Consumers Energy Way to enable them to achieve world class performance and positively impact the triple bottom line. Consumers’ investment plan and the regulatory environment in which it operates also drive its ability to impact the triple bottom line.

Investment Plan: Consumers expects to make capital investments of $25 billion over the next ten years. Over the next five years, Consumers expects to make significant expenditures on infrastructure upgrades and replacements and electric supply projects. While it has a large number of potential investment opportunities that would add customer value, Consumers has prioritized its spending based on the criteria of enhancing public safety, increasing reliability, maintaining affordability for its customers, and advancing its environmental stewardship. Consumers’ investment program is expected to result in annual rate-base growth of six to eight percent. This rate-base growth, together with cost-control measures, should allow Consumers to maintain affordable customer prices.

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Presented in the following illustration are planned capital expenditures of $12.2 billion that Consumers expects to make from 2020 through 2024:

Of this amount, Consumers plans to spend $9.4 billion over the next five years to maintain and upgrade its gas infrastructure and electric distribution systems in order to enhance safety and reliability, improve customer satisfaction, and reduce energy waste on those systems. The gas infrastructure projects comprise $5.0 billion to sustain deliverability and enhance pipeline integrity and safety. These projects, which involve replacement of mains and services and enhancement of transmission and storage systems, should reduce the minor quantity of methane emissions released as gas is transported. The electric distribution projects comprise $4.4 billion to strengthen circuits and substations and replace poles. Consumers also expects to spend $2.8 billion on electric supply projects, primarily new renewable generation. In response to the COVID‑19 pandemic, Consumers has rescheduled some capital investment projects, but has not made any changes to its long-term capital investment program at this time.

Regulation: Regulatory matters are a key aspect of Consumers’ business, particularly rate cases and regulatory proceedings before the MPSC, which permit recovery of new investments while helping to ensure that customer rates are fair and affordable. Important regulatory events and developments not already discussed are summarized below.

• 2019 Gas Rate Case: In December 2019, Consumers filed an application with the MPSC seeking an annual rate increase of $245 million, based on a 10.5 percent authorized return on equity. In May 2020, Consumers reduced its requested annual rate increase to $229 million. The filing also seeks approval of a revenue decoupling mechanism that would annually reconcile Consumers’ actual weather-normalized non-fuel revenues with the revenues approved by the MPSC.

• 2020 Electric Rate Case: In February 2020, Consumers filed an application with the MPSC seeking an annual rate increase of $244 million, based on a 10.5 percent authorized return on equity. In July 2020, Consumers reduced its requested annual rate increase to $230 million. The filing also seeks approval to recover $13 million associated with Consumers’ deferral of depreciation and property tax expense and the overall rate of return on distribution-related capital

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investments exceeding certain threshold amounts. Additionally, the filing seeks approval of a method of recovering amounts earned under the financial compensation mechanism approved by the MPSC in Consumers’ IRP. This mechanism allows Consumers to earn a financial incentive on PPAs approved by the MPSC after January 1, 2019. Consumers also proposes in the filing a new distributed generation tariff to replace the current net metering tariff, pursuant to the 2016 Energy Law.

Looking Forward

CMS Energy and Consumers will continue to consider the impact on the triple bottom line of people, planet, and profit in their daily operations as well as in their long-term strategic decisions. Consumers will continue to seek fair and timely regulatory treatment that will support its customer-driven investment plan, while pursuing cost-control measures that will allow it to maintain sustainable customer base rates. The Consumers Energy Way is an important means of realizing CMS Energy’s and Consumers’ purpose of achieving world class performance while delivering hometown service.

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Results of Operations

CMS Energy Consolidated Results of Operations

In Millions, Except Per Share Amounts
	Three Months Ended												Six Months Ended
June 30	2020				2019				Change				2020				2019				Change
Net Income Available to Common Stockholders		$	136			$	93			$	43			$	379			$	306			$	73
Basic Earnings Per Average Common Share		$	0.48			$	0.33			$	0.15			$	1.33			$	1.08			$	0.25
Diluted Earnings Per Average Common Share		$	0.48			$	0.33			$	0.15			$	1.33			$	1.08			$	0.25
In Millions
	Three Months Ended												Six Months Ended
June 30	2020				2019				Change				2020				2019				Change
Electric utility		$	119			$	90			$	29			$	237			$	195			$	42
Gas utility		41				8				33				158				129				29
Enterprises¹		1				16				(15		)		21				23				(2		)
EnerBank¹		8				10				(2		)		22				21				1
Corporate interest and other¹		(33		)		(31		)		(2		)		(59		)		(62		)		3
Net Income Available to Common Stockholders		$	136			$	93			$	43			$	379			$	306			$	73

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

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Presented in the following table are specific after-tax changes to net income available to common stockholders for the three and six months ended June 30, 2020 versus 2019:

In Millions
	Three Months Ended							Six Months Ended
June 30, 2019					$	93						$	306
Reasons for the change
Consumers electric utility and gas utility
Electric sales		$	31						$	8
Gas sales		3							(34		)
Electric rate increase, including return on higher renewable capital spending		4							9
Gas rate increase		16							64
Lower distribution and transmission expenses		14							20
Lower OPEB expenses		5							11
Service restoration costs		(16		)					9
Research and development tax credits1		—							8
Higher mutual insurance distribution		—							5
Depreciation and amortization		(4		)					(17		)
Higher property tax, reflecting higher capital spending		(2		)					(9		)
Voluntary separation plan expenses		—							(8		)
Retention benefits related to D.E. Karn2		(3		)					(6		)
Other		14							11
					$	62						$	71
Enterprises
Higher (lower) earnings		(3		)					6
Increased income tax benefit due to restoring previously sequestered alternative minimum tax credits1		—							4
Absence of 2019 gain on sale of transmission assets		(12		)					(12		)
					(15		)					(2		)
EnerBank
Higher earnings due primarily to growth in consumer lending		3							8
Implementation of new credit losses standard3		(5		)					(7		)
					(2		)					1
Corporate interest and other
Increased income tax benefit due to restoring previously sequestered alternative minimum tax credits1		—							5
Lower administrative and other expenses		—							3
Higher fixed charges due to higher debt		(2		)					(5		)
					(2		)					3
June 30, 2020					$	136						$	379

¹  See Note 9, Income Taxes.

²  See Note 14, Exit Activities.

³  See Note 1, New Accounting Standards.

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Consumers Electric Utility Results of Operations

Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for the three months ended June 30, 2020 versus 2019 (amounts are presented pre‑tax, with the exception of income tax changes):

Three Months Ended June 30, 2019				$	90
Reasons for the change
Electric deliveries1 and rate increases
Higher sales due primarily to favorable weather and sales mix, offset partially by lower deliveries to commercial and industrial customers	$	44
Rate increase associated with return on higher renewable capital spending	5
Lower energy waste reduction program revenues	(5		)
Lower other revenues	(6		)
				$	38
Maintenance and other operating expenses
Lower distribution and transmission expenses	11
Lower energy waste reduction program costs	5
Higher service restoration costs	(21		)
Retention benefits related to D.E. Karn2	(3		)
Lower maintenance and other operating expenses	5
				(3		)
Depreciation and amortization
Increased plant in service, reflecting higher capital spending				(4		)
General taxes				(4		)
Other income, net of expenses
Lower OPEB expenses	4
Higher other income, net of expenses	2
				6
Interest charges				(2		)
Income taxes
Higher electric utility pre-tax earnings	(7		)
Lower other income taxes	5
				(2		)
Three Months Ended June 30, 2020				$	119

¹  Deliveries to end-use customers were 8.0 billion kWh in 2020 and 8.6 billion kWh in 2019.

²  See Note 14, Exit Activities.

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Presented in the following table are the detailed changes to the electric utility’s net income available to common stockholders for the six months ended June 30, 2020 versus 2019 (amounts are presented pre‑tax, with the exception of income tax changes):

In Millions
Six Months Ended June 30, 2019				$	195
Reasons for the change
Electric deliveries1 and rate increases
Higher sales due primarily to favorable weather and sales mix, offset partially by lower deliveries to commercial and industrial customers	$	16
Rate increase, including return on higher renewable capital spending	12
Lower energy waste reduction program revenues	(6		)
Lower other revenues	(6		)
				$	16
Maintenance and other operating expenses
Lower distribution and transmission expenses	14
Lower service restoration costs	12
Higher mutual insurance distribution	7
Lower energy waste reduction program costs	6
Absence of favorable 2019 litigation settlement	(8		)
Retention benefits related to D.E. Karn2	(7		)
Voluntary separation plan expenses	(6		)
Lower maintenance and other operating expenses	14
				32
Depreciation and amortization
Increased plant in service, reflecting higher capital spending				(11		)
General taxes				(5		)
Other income, net of expenses
Lower OPEB expenses	8
Higher other income, net of expenses	1
				9
Interest charges				(6		)
Income taxes
Lower tax expense due primarily to research and development tax credits3	7
Higher electric utility pre-tax earnings	(7		)
Lower other income taxes	7
				7
Six Months Ended June 30, 2020				$	237

¹  Deliveries to end-use customers were 16.8 billion kWh in 2020 and 17.8 billion kWh in 2019.

²  See Note 14, Exit Activities.

³  See Note 9, Income Taxes.

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Consumers Gas Utility Results of Operations

Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for the three months ended June 30, 2020 versus 2019 (amounts are presented pre‑tax, with the exception of income tax changes):

In Millions
Three Months Ended June 30, 2019				$	8
Reasons for the change
Gas deliveries1 and rate increases
Rate increase	$	22
Other revenues	3
				$	25
Maintenance and other operating expenses
Lower distribution and transmission expenses	8
Lower maintenance and other operating expenses	13
				21
Depreciation and amortization
Increased plant in service, reflecting higher capital spending				(2		)
General taxes				(1		)
Other income, net of expenses
Lower OPEB expenses				3
Interest charges				(6		)
Income taxes
Higher gas utility pre-tax earnings	(10		)
Lower other income taxes	3
				(7		)
Three Months Ended June 30, 2020				$	41

¹  Deliveries to end-use customers were 47 bcf in 2020 and 49 bcf in 2019.

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Presented in the following table are the detailed changes to the gas utility’s net income available to common stockholders for the six months ended June 30, 2020 versus 2019 (amounts are presented pre‑tax, with the exception of income tax changes):

In Millions
Six Months Ended June 30, 2019				$	129
Reasons for the change
Gas deliveries1 and rate increases
Rate increase	$	86
Lower sales due primarily to unfavorable weather	(55		)
Lower energy waste reduction program revenues	(9		)
Other revenues	10
				$	32
Maintenance and other operating expenses
Lower distribution and transmission expenses	13
Lower energy waste reduction program costs	9
Voluntary separation plan expenses	(4		)
Lower maintenance and other operating expenses	9
				27
Depreciation and amortization
Increased plant in service, reflecting higher capital spending				(12		)
General taxes
Higher property tax, reflecting higher capital spending	(8		)
Lower other general taxes	1
				(7		)
Other income, net of expenses
Lower OPEB expenses	7
Lower other income, net of expenses	(2		)
				5
Interest charges				(10		)
Income taxes
Higher gas utility pre-tax earnings	(8		)
Lower tax expense due primarily to research and development tax credits2	1
Lower other income taxes	1
				(6		)
Six Months Ended June 30, 2020				$	158

¹  Deliveries to end-use customers were 167 bcf in 2020 and 191 bcf in 2019.

²  See Note 9, Income Taxes.

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Enterprises Results of Operations

Presented in the following table are the detailed after-tax changes to the enterprises segment’s net income available to common stockholders for the three months ended June 30, 2020 versus 2019:

In Millions
Three Months Ended June 30, 2019	$	16
Reason for the change
Absence of 2019 gain on sale of transmission assets	$	(12	)
Lower earnings due primarily to extended maintenance outages	(3		)
Three Months Ended June 30, 2020	$	1

Presented in the following table are the detailed after-tax changes to the enterprises segment’s net income available to common stockholders for the six months ended June 30, 2020 versus 2019:

In Millions
Six Months Ended June 30, 2019	$	23
Reasons for the change
Higher earnings due primarily to improved receivables management and lower operations and maintenance costs	$	6
Increased income tax benefit due to restoring previously sequestered alternative minimum tax credits1	4
Absence of 2019 gain on sale of transmission assets	(12		)
Six Months Ended June 30, 2020	$	21

¹  See Note 9, Income Taxes.

EnerBank Results of Operations

Presented in the following table are the detailed after-tax changes to EnerBank’s net income available to common stockholders for the three months ended June 30, 2020 versus 2019:

In Millions
Three Months Ended June 30, 2019	$	10
Reason for the change
Higher earnings due primarily to growth in consumer lending	$	3
Implementation of new credit losses standard1	(5		)
Three Months Ended June 30, 2020	$	8

¹  See Note 1, New Accounting Standards.

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Presented in the following table are the detailed after-tax changes to EnerBank’s net income available to common stockholders for the six months ended June 30, 2020 versus 2019:

In Millions
Six Months Ended June 30, 2019	$	21
Reasons for the change
Higher earnings due primarily to growth in consumer lending	$	8
Implementation of new credit losses standard1	(7		)
Six Months Ended June 30, 2020	$	22

¹  See Note 1, New Accounting Standards.

Corporate Interest and Other Results of Operations

Presented in the following table are the detailed after-tax changes to corporate interest and other results for the three months ended June 30, 2020 versus 2019:

In Millions
Three Months Ended June 30, 2019	$	(31	)
Reasons for the change
Higher fixed charges due to higher debt	$	(2	)
Three Months Ended June 30, 2020	$	(33	)

Presented in the following table are the detailed after-tax changes to corporate interest and other results for the six months ended June 30, 2020 versus 2019:

In Millions
Six Months Ended June 30, 2019	$	(62	)
Reasons for the change
Increased income tax benefit due to restoring previously sequestered alternative minimum tax credits1	$	5
Lower administrative and other expenses	3
Higher fixed charges due to higher debt	(5		)
Six Months Ended June 30, 2020	$	(59	)

¹  See Note 9, Income Taxes.

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Cash Position, Investing, and Financing

At June 30, 2020, CMS Energy had $1,604 million of consolidated cash and cash equivalents, which included $17 million of restricted cash and cash equivalents. At June 30, 2020, Consumers had $1,229 million of consolidated cash and cash equivalents, which included $14 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of the changes to net cash provided by operating activities for the six months ended June 30, 2020 versus 2019:

In Millions
CMS Energy, including Consumers
Six Months Ended June 30, 2019	$	1,185
Reasons for the change
Higher net income	$	73
Non‑cash transactions1	71
Higher pension contributions	(531		)
Favorable impact of changes in core working capital,2 due primarily to lower vendor payments, offset partially by lower customer receipts and lower alternative minimum tax credit refunds received in 2020	12
Unfavorable impact of changes in other assets and liabilities, due primarily to higher deposits with MISO and a litigation settlement payment, offset partially by the absence of 2019 refunds to customers related to the TCJA	(14		)
Six Months Ended June 30, 2020	$	796
Consumers
Six Months Ended June 30, 2019	$	1,110
Reasons for the change
Higher net income	$	71
Non-cash transactions1	42
Higher pension contributions	(518		)
Favorable impact of changes in core working capital,2 due primarily to lower vendor payments, offset partially by lower customer receipts	33
Favorable impact of changes in other assets and liabilities, due primarily to the absence of 2019 refunds to customers related to the TCJA, offset partially by higher deposits with MISO	43
Six Months Ended June 30, 2020	$	781

¹  Non‑cash transactions comprise depreciation and amortization, changes in deferred income taxes and investment tax credits, and other non‑cash operating activities and reconciling adjustments.

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

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Investing Activities

Presented in the following table are specific components of net cash used in investing activities for the six months ended June 30, 2020 versus 2019:

In Millions
CMS Energy, including Consumers
Six Months Ended June 30, 2019	$	(1,410	)
Reasons for the change
Lower capital expenditures	$	27
Changes in EnerBank notes receivable, reflecting smaller growth in consumer lending in 2020	22
Lower purchases of notes receivable by EnerBank	205
Other investing activities, primarily the absence of 2019 proceeds from sale of transmission equipment, offset partially by lower costs to retire property	(12		)
Six Months Ended June 30, 2020	$	(1,168	)
Consumers
Six Months Ended June 30, 2019	$	(1,026	)
Reasons for the change
Lower capital expenditures	$	27
Other investing activities, primarily lower costs to retire property	6
Six Months Ended June 30, 2020	$	(993	)

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Financing Activities

Presented in the following table are specific components of net cash provided by financing activities for the six months ended June 30, 2020 versus 2019:

In Millions
CMS Energy, including Consumers
Six Months Ended June 30, 2019	$	384
Reasons for the change
Higher debt issuances	$	898
Lower debt retirements	712
Changes in EnerBank certificates of deposit, reflecting lower borrowings	(239		)
Lower repayments under Consumers’ commercial paper program	7
Higher issuances of common stock, primarily the settlement of an equity forward sale contract	98
Higher payments of dividends on common stock	(16		)
Other financing activities, primarily higher debt prepayment costs	(25		)
Six Months Ended June 30, 2020	$	1,819
Consumers
Six Months Ended June 30, 2019	$	72
Reasons for the change
Higher debt issuances	$	1,231
Lower debt retirements	165
Lower repayments under Consumers’ commercial paper program	7
Lower stockholder contribution from CMS Energy	(25		)
Higher payments of dividends on common stock	(4		)
Other financing activities, primarily higher debt prepayment and debt issuance costs	(33		)
Six Months Ended June 30, 2020	$	1,413

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 six months ended June 30, 2020, Consumers paid $276 million in dividends on its common stock to CMS Energy.

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, and fund its other obligations. Consumers also uses these sources of funding to contribute to its employee benefit plans.

CMS Energy and Consumers expect to have sufficient liquidity to fund their commitments despite potential material uncertainties that may impact their cash management and financing strategies as a result of the COVID‑19 pandemic. CMS Energy and Consumers rely on the capital markets to fund their robust

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capital plan and those markets have faced significant strain. CMS Energy and Consumers have mitigated the potential impact of the pandemic on their liquidity by completing financing transactions and reducing the need for external funding for the remainder of the year. For more information on CMS Energy’s and Consumers’ financing transactions, see Note 4, Financings and Capitalization.

Barring any sustained market dislocations or disruptions, CMS Energy and Consumers expect to continue to have ready access to the financial and capital markets and will continue to explore possibilities to take advantage of market opportunities as they arise with respect to future funding needs. 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. The COVID‑19 pandemic is a continually evolving situation and CMS Energy and Consumers cannot predict the ultimate impact it will have on their liquidity, debt covenants, financial condition, results of operations, or capital investment program.

As a result of a provision in the TCJA, as amended by the CARES Act, CMS Energy will recover all remaining alternative minimum tax credits in 2020. CMS Energy utilized $7 million of these credits on its 2019 consolidated tax return, and will receive the remaining $69 million through a cash refund. The CARES Act also provides for the deferral of payroll taxes, which will allow CMS Energy and Consumers to defer remittance of $40 million of payroll taxes in 2020; half of the deferred amount will be due at the end of 2021 and the other half will be due at the end of 2022.

In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise. At June 30, 2020, CMS Energy’s remaining forward sales contracts under this program had an aggregate sales price of $150 million. These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock. For more information on the forward sale contracts, see Note 4, Financings and Capitalization—Issuance of Common Stock.

In April 2020, CMS Energy entered into a new equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $500 million. Like the 2018 equity offering program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise. There have been no sales of securities under this program.

At June 30, 2020, CMS Energy had $545 million of its revolving credit facility available and Consumers had $1.1 billion available under its revolving credit facilities. 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 at market interest rates. These issuances are supported by Consumers’ revolving credit facilities. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At June 30, 2020, there were no commercial paper notes outstanding under this program. For additional details on CMS Energy’s and Consumers’ revolving credit facilities and commercial paper program, see Note 4, Financings and Capitalization.

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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 June 30, 2020, 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 June 30, 2020, as presented in the following table:

	June 30, 2020
Credit Agreement, Indenture, or Facility	Limit		Actual
CMS Energy, parent only
Debt to Capital¹	<	0.70 to 1.0	0.61 to 1.0
Consumers
Debt to Capital²	<	0.65 to 1.0	0.49 to 1.0

¹  Applies to CMS Energy’s $550 million revolving credit agreement and $300 million term loan credit agreement. In April 2020, amendments to these agreements changed the required financial covenant from a leverage ratio to a capitalization ratio.

²  Applies to Consumers’ $850 million and $250 million revolving credit agreements, its $30 million and $35 million reimbursement agreements, and its $300 million term loan credit agreement.

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 operating activities, together with access to sources of liquidity, are anticipated to be sufficient to fund the companies’ contractual obligations for 2020 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. Additionally, CMS Energy has entered into forward sales contracts to sell its common stock in order to invest in its utility and non-utility businesses; as of June 30, 2020, these contracts have an aggregate sales price of $150 million and mature in 2021. For additional details on the companies’ indemnity and guarantee arrangements, see Note 3, Contingencies and Commitments—Guarantees. For additional details on letters of credit and CMS Energy’s forward sales contracts, see Note 4, Financings and Capitalization.

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 Outlook and Uncertainties

Clean Energy Plan: In 2019, the MPSC approved the IRP that Consumers filed in 2018, which details its Clean Energy Plan. Through its Clean Energy Plan, Consumers expects to reduce carbon emissions of its

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owned generation by more than 90 percent from its 2005 levels by 2040 and eliminate the use of coal to generate electricity by 2040. The Clean Energy Plan also provides the foundation for Consumers’ goal to achieve net-zero carbon emissions by 2040. Under this net-zero goal, Consumers plans to eliminate the impact of carbon emissions created by the electricity it generates or purchases for customers.

Specifically, the Clean Energy Plan provides for:

• the retirement of the D.E. Karn 1 & 2 coal-fueled generating units, totaling 503 MW, in 2023

• the continued assessment in future IRP filings concerning the retirement of the J.H. Campbell 1 & 2 coal-fueled generating units, totaling 609 MW, in 2025 or earlier

Under the Clean Energy Plan, Consumers will replace the capacity to be retired with:

• increased demand response programs

• increased energy efficiency

• increased renewable energy generation

• conservation voltage reduction

• increased pumped storage

Consumers will competitively bid new capacity and at least 50 percent of the new capacity will be built and owned by third parties; the remainder will be owned and operated by Consumers. In support of its Clean Energy Plan, Consumers issued requests for proposals in September 2019 and July 2020, each to acquire up to 300 MW of new capacity from projects to be operational in Michigan’s Lower Peninsula by May 2023. Specifically, Consumers solicited offers to enter into PPAs with or purchase solar generation projects ranging in size from 20 MW to 150 MW and to enter into PPAs with PURPA qualifying facilities up to 20 MW. Any contracts entered into as a result of the request for proposals would be subject to MPSC approval.

Renewable Energy Plan: The 2016 Energy Law raised the renewable energy standard to 15 percent in 2021, with an interim target of 12.5 percent in 2019. Consumers met the interim target for 2019 and demonstrated its compliance in the 2019 renewable energy cost reconciliation filed with the MPSC in July 2020. Consumers is required to submit RECs, which represent proof that the associated electricity was generated from a renewable energy resource, in an amount equal to at least the required percentage 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.

Under Consumers’ renewable energy plan, the MPSC has approved the acquisition of up to 525 MW of new wind generation projects and authorized Consumers to earn a 10.7 percent return on equity on any projects approved by the MPSC. Specifically, the MPSC has approved the following:

• purchase of a wind generation project under development, with capacity of up to 150 MW, in Gratiot County, Michigan; on-site construction began during the fourth quarter of 2019 and the project is slated to be complete and operational in 2020

• purchase of a wind generation project under development, with capacity of up to 166 MW, in Hillsdale, Michigan; Consumers is slated to take full ownership and begin commercial operation of the project in 2020

• execution of a 20-year PPA under which Consumers will purchase 100 MW of renewable capacity, energy, and RECs from a 149-MW solar generating facility to be constructed in Calhoun County, Michigan; the facility is expected to be operational in 2022

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As a result of the COVID‑19 pandemic, Consumers has received force majeure notifications from the turbine supplier and engineering, procurement, and construction contractors for the two wind generation projects. At this time, construction activities continue and Consumers does not anticipate any changes to the projects’ expected commercial operation dates, overall costs, or ability to qualify for production tax credits, but Consumers cannot predict the ultimate impact of the force majeure notifications.

Electric Customer Deliveries and Revenue: Consumers’ electric customer deliveries are seasonal and largely dependent on Michigan’s economy. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment. 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.

As a result of the COVID-19 pandemic, Consumers has delayed implementation of a summer peak time-of-use rate for electric residential customers, originally planned to begin in June 2020. The summer peak time-of-use rate will allow customers to take advantage of lower-cost energy during off-peak times during the summer months. Customers could reduce their electric bills by shifting their consumption from on‑peak to off‑peak times. The MPSC approved delaying implementation of the summer peak time-of-use rate to 2021, recognizing that more customers may be at home during the pandemic and may not have the same opportunities to manage peak power consumption.

In response to the COVID‑19 pandemic, Michigan’s Governor issued various executive orders requiring all non-essential businesses to close temporarily and Michigan residents to stay home during the period from March 23, 2020 to June 8, 2020. Subsequent executive orders have gradually eased restrictions and most businesses are now open at limited capacity and with safety measures in place. During the three months ended June 30, 2020, weather-normalized electric deliveries were approximately 12 percent lower than deliveries during the same period in 2019, due mainly to a decline in deliveries to commercial and industrial customers of over 20 percent. This decline, however, was offset partially by an increase of approximately ten percent in deliveries to residential customers. Consumers cannot predict the long-term impact of the COVID-19 pandemic, but anticipates a decline of over ten percent in deliveries to commercial and industrial customers for the full-year 2020 compared to 2019.

Consumers suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers. Consumers has experienced and anticipates it will continue to experience increased uncollectible accounts in the near term, but cannot predict the long-term impact of the pandemic on Michigan’s economy or its customers.

Over the long term, Consumers expects weather-normalized electric deliveries over the next five years to decrease slightly. This outlook reflects the effects of energy waste reduction programs and appliance efficiency standards offset largely by modest growth in electric demand. Actual delivery levels will depend on:

• energy conservation measures and results of energy waste reduction programs

• weather fluctuations

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

Electric ROA: Michigan law allows electric customers in Consumers’ service territory to buy electric generation service from alternative electric suppliers in an aggregate amount capped at ten percent, with certain exceptions. At June 30, 2020, electric deliveries under the ROA program were at the ten-percent limit. Of Consumers’ 1.8 million electric customers, fewer than 300, or 0.02 percent, purchased electric generation service under the ROA program.

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The 2016 Energy Law established a path to ensure that forward capacity is secured for all electric customers in Michigan, including customers served by alternative electric suppliers under ROA. The new law also authorized the MPSC to ensure that alternative electric suppliers have procured enough capacity to cover their anticipated capacity requirements for the four-year forward period. In 2017, the MPSC issued an order establishing a state reliability mechanism for Consumers. Under this mechanism, beginning June 2018, if an alternative electric supplier does not demonstrate that it has procured its capacity requirements for the four-year forward period, its customers will pay a set charge to the utility for capacity that is not provided by the alternative electric supplier. All alternative electric suppliers have demonstrated that they have procured their capacity requirements through the MISO planning year beginning June 1, 2023.

During 2017, the MPSC issued orders finding that it has statutory authority to determine and implement a local clearing requirement, which requires all electric suppliers to demonstrate that a portion of the capacity procured to serve customers during peak demand times is located in the MISO footprint in Michigan’s Lower Peninsula. In 2018, the Michigan Court of Appeals issued a decision that the MPSC does not have statutory authority to implement such a requirement for individual alternative electric suppliers. The MPSC and Consumers filed applications for leave to appeal the Court of Appeals’ decision to the Michigan Supreme Court. In April 2020, the Michigan Supreme Court issued a unanimous opinion reversing the Court of Appeals’ decision and determined that the 2016 Energy Law authorizes the MPSC to implement a local clearing requirement on individual alternative electric suppliers. The Michigan Supreme Court remanded the case to the Court of Appeals to consider a procedural challenge previously undecided by the Court of Appeals; this challenge concerns the process that the MPSC used in 2017 to consider a local clearing requirement and does not affect the substance of the MPSC’s authority to implement a local clearing requirement for future planning periods. In April 2020, ABATE filed a motion for rehearing of the Michigan Supreme Court’s decision; the Michigan Supreme Court denied ABATE’s motion in May 2020. In June 2020, the Michigan Court of Appeals issued a letter resubmitting the case for its consideration of the Michigan Supreme Court’s remand of the procedural issue.

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

2020 Electric Rate Case: In February 2020, Consumers filed an application with the MPSC seeking an annual rate increase of $244 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending December 31, 2021. The filing requests authority to recover new investment in distribution system reliability and technology enhancements. In July 2020, Consumers reduced its requested annual rate increase to $230 million. Presented in the following table are the components of the revised requested increase in revenue:

In Millions
Projected Twelve-Month Period Ending December 31	2021
Components of the requested rate increase
Investment in rate base	$	179
Operating and maintenance costs	97
Cost of capital	20
Sales	(30		)
TCJA deferred federal income taxes amortization	(36		)
Total	$	230

The filing also seeks approval to recover $13 million associated with Consumers’ deferral of depreciation and property tax expense and the overall rate of return on distribution-related capital investments exceeding certain threshold amounts. This deferred accounting treatment was approved by the MPSC in January 2019.

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Additionally, the filing seeks approval of a method of recovering amounts earned under the financial compensation mechanism approved by the MPSC in Consumers’ IRP. This mechanism allows Consumers to earn a financial incentive on PPAs approved by the MPSC after January 1, 2019. In the filing, Consumers requests recovery of $3 million, beginning in January 2021, for incentives earned and to be earned on PPA payments during 2019 through 2021.

Consumers also proposes in the filing a new distributed generation tariff to replace the current net metering tariff, pursuant to the 2016 Energy Law. The proposed distributed generation tariff is consistent with other distributed generation tariffs already approved by the MPSC and would substantially reduce the subsidies paid by non-distributed generation customers under the current net metering program.

Depreciation Rate Case: In July 2020, Consumers filed a depreciation case related to Ludington, requesting to increase depreciation expense, and its recovery of that expense, by $17 million annually.

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 $275 million from 2020 through 2024 to continue to comply with RCRA, the Clean Water Act, the Clean Air 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.

Air Quality: Multiple air quality regulations apply, or may apply, to Consumers.

CSAPR, which became effective in 2015, requires Michigan and many 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 2016, the EPA finalized new ozone season standards for CSAPR, which became effective in 2017. Any litigation or remand to the EPA is not expected to impact Consumers’ compliance strategy, as Consumers expects its emissions to be within the CSAPR allowance allocations.

In 2012, the EPA published emission standards for electric generating units, known as MATS, based on Section 112 of the Clean Air Act. Under MATS, all of Consumers’ existing coal‑fueled electric generating units were required to add additional controls for hazardous air pollutants. Consumers met the deadline for five coal‑fueled units and two oil/gas‑fueled units it continues to operate and retired its seven remaining coal‑fueled units. In addition, the EPA recently finalized changes to the supporting analysis used to justify MATS, but did not make any changes to the MATS regulations. These changes do not impact Consumers’ MATS compliance strategy because, if the MATS regulations were repealed, Consumers would then be required to comply with the Michigan Mercury Rule, which has similar requirements to MATS. In addition, Consumers must comply with its settlement agreement with the EPA entered into in 2014 concerning opacity and NSR, which has similar emission requirements to MATS.

In 2015, the EPA lowered the NAAQS for ozone. The 2015 ozone NAAQS made it more difficult to construct or modify power plants and other emission sources in areas of the country that have not met the 2015 ozone standard. In 2018, the EPA designated certain areas of Michigan as not meeting the ozone standard. None of Consumers’ fossil‑fuel‑fired generating units are located in these areas. Some of Consumers’ compressor stations are located in areas impacted by the rule, but Consumers expects only minor permitting impacts if those units are modified in the future. Consumers does not expect that any litigation involving NAAQS for ozone will have a material adverse impact on its generating assets.

Consumers’ strategy to comply with air quality regulations, including CSAPR, NAAQS, and MATS, as well as its legal obligations, involved the installation and operation of emission control equipment at some facilities and the suspension of operations at others; however, Consumers continues to evaluate

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these rules in conjunction with other EPA and EGLE rulemakings, litigation, and congressional action. This evaluation could result in:

• a change in Consumers’ fuel mix

• changes in the types of generating units Consumers may purchase or build in the future

• changes in how certain units are used

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

• changes in Consumers’ environmental compliance costs

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.

In 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, as well as modified or reconstructed electric generating units. New coal‑fueled units would not be able to meet this limit without installing carbon dioxide control equipment using such methods as carbon capture and sequestration.

In 2018, the EPA proposed a revised Section 111(b) regulation to replace the 2015 standard rule limiting carbon dioxide emissions from new electric generating units, citing limited availability and high costs of carbon capture and sequestration equipment as reasons to change the 2015 rule. The revised Section 111(b) regulation requires new coal‑fueled generating units to meet a highly efficient steam cycle performance standard. Consumers does not expect this proposal to change its existing environmental strategy.

In 2019, the EPA finalized the Affordable Clean Energy rule. The rule requires individual states to evaluate coal-fueled power plants for heat‑rate improvements that could increase overall plant efficiency. The evaluations to be performed by the State of Michigan may require Consumers to make heat-rate improvements at its J.H. Campbell plant beginning in the mid‑2020s. This rule is presently being litigated. Consumers cannot evaluate the potential impact of the rule until the State of Michigan completes its evaluations.

In 2015, a group of 195 countries, including the U.S., finalized the Paris Agreement, which governs carbon dioxide reduction measures beginning in 2020. Although the U.S. has begun the process of withdrawing from the Paris Agreement, it has stated a desire to renegotiate a new agreement in the future. At this time, Consumers does not expect any adverse changes to its environmental strategy as a result of these events.

While Consumers cannot predict the outcome of changes in U.S. policy or of other legislative or regulatory initiatives involving the potential regulation of greenhouse gases, it intends to continue to move forward with its Clean Energy Plan, its present net-zero carbon reduction goal, and its emphasis on supply diversity. Consumers will continue to monitor regulatory and legislative activity and related litigation regarding greenhouse gas emissions standards that may affect electric generating units.

Increased frequency of severe weather events, including those due to climate change, could materially impact Consumers’ facilities, energy sales, and results of operations. Consumers is unable to predict these events or their financial impact; however, Consumers evaluates the potential physical impacts of climate change on its operations, including increased storm activity, increased rainfall, and higher lake and river levels. Consumers is taking steps to mitigate these risks as appropriate.

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Litigation, international treaties, federal laws and regulations (including regulations by the EPA), and state laws and regulations, if enacted or ratified, could ultimately require Consumers to replace equipment, install additional emission control equipment, purchase emission allowances or credits, curtail operations, arrange for alternative sources of supply, mothball or retire facilities that generate certain emissions, pursue energy efficiency or demand response measures more swiftly, 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 2015, the EPA published a final rule regulating CCRs under RCRA. 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, including any groundwater protection standard exceedances. The rule also sets out conditions under which CCR units would be forced to cease receiving CCR and non‑CCR wastewater and initiate closure based on the inability to achieve minimum safety standards, meet a location standard, or meet minimum groundwater standards. Consumers has aligned with EGLE on closure plans for each of its unlined ash ponds to ensure coordination between federal and state requirements. The unlined ash ponds have ceased operation and have been replaced with double-lined ash ponds or concrete tanks. Significant closure work has been completed at the remaining ash ponds.

Due to litigation, many aspects of the 2015 CCR rule have been remanded to the EPA, which has resulted in various new rulemakings. These new rulemakings are now in litigation. Continued litigation will add uncertainty around requirements for compliance and state permit programs.

Separately, Congress passed legislation in 2016 allowing participating states to develop permitting programs for CCRs under RCRA. In 2018, the Michigan Legislature adopted a permitting program, which requires the EPA’s authorization. This program should reduce costly, duplicative oversight over CCRs and provide local oversight to CCR issues unique to Michigan. In April 2020, EGLE submitted a regulatory package for Michigan’s permit program to the EPA for its review. Federal rulemaking challenges may delay EPA approval of the Michigan permitting program.

Consumers has aligned with EGLE on closure plans for all of its coal ash disposal sites, including those subject to the EPA’s 2015 CCR rule, and adjusted its recorded ARO accordingly. Consumers has historically been authorized to recover in electric rates costs related to coal ash disposal sites.

Water: Multiple water-related regulations apply, or may apply, to Consumers.

The EPA regulates cooling water intake systems of existing electric generating plants under Section 316(b) of the Clean Water Act and the corresponding rules that were revised in 2014. The rules are aimed at reducing alleged harmful impacts on aquatic organisms, such as fish. In 2018, Consumers submitted to EGLE for approval all required studies and recommended plans to comply with Section 316(b), but has not yet received final approval.

In 2015, the EPA released its final effluent limitation guidelines for steam electric generating plants. These guidelines, which are presently being litigated, set stringent new requirements for the discharge from electric generating units into wastewater streams. In 2017, the EPA replaced specific portions of the rule and delayed the compliance start dates for two years, but maintained the compliance end dates. Additional rulemaking began in November 2019 and has continued in 2020. Consumers does not expect any adverse changes to its environmental strategy as a result of proposed revisions to the rule.

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In recent years, the EPA and the U.S. Army Corps of Engineers have proposed rules redefining “Waters of the United States,” which defines the scope of federal jurisdiction under the Clean Water Act, and other changes to the Clean Water Act regulations. For example, the EPA recently finalized a rule repealing the 2015 definition of “Waters of the United States” and, in January 2020, released a rule with its new definition. The new definition narrows the scope of federal jurisdiction and reduces the frequency of dual jurisdiction in states with authority to regulate the same waters; Michigan is one such state. Consumers does not expect adverse changes to its environmental strategy as a result of the new definition, which is presently being litigated in multiple jurisdictions.

Many of Consumers’ facilities maintain NPDES permits, which are renewed every five years and are vital to the facilities’ operations. Failure of EGLE to renew any NPDES permit, a successful appeal against a permit, a change in the interpretation or scope of NPDES permitting, or onerous terms contained in a permit could have a significant detrimental effect on the operations of a facility.

Other Matters: 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.

Retention Incentive Program: In October 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. Consumers expects to recognize up to $15 million of expense related to retention benefits in 2020. Consumers is seeking recovery of these costs from customers in its 2020 electric rate case. For additional details on this program, see Note 14, Exit Activities.

Consumers Gas Utility Outlook and Uncertainties

Gas Deliveries: Consumers’ gas customer deliveries are seasonal. The peak demand for natural gas typically occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel.

Consumers does not anticipate that the COVID‑19 pandemic will have a material impact on near-term gas deliveries, but cannot predict the impact on full-year 2020 deliveries at this time. Consumers has experienced and anticipates it will continue to experience increased uncollectible accounts in the near term, but cannot predict the long-term impact of the pandemic on Michigan’s economy or its customers.

Over the long term, Consumers expects weather‑normalized gas deliveries over the next five years to remain stable relative to 2019. 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 as a result of:

• 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 additional details on rate matters, see Note 2, Regulatory Matters.

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2019 Gas Rate Case: In December 2019, Consumers filed an application with the MPSC seeking an annual rate increase of $245 million, based on a 10.5 percent authorized return on equity and a projected twelve-month period ending September 30, 2021. The filing requests authority to recover new infrastructure investment and related costs that will allow Consumers to improve system safety and reliability. In May 2020, Consumers reduced its requested annual rate increase to $229 million. Presented in the following table are the components of the revised requested increase in revenue:

In Millions
Projected Twelve-Month Period Ending September 30	2021
Components of the requested rate increase
Investment in rate base	$	117
Operating and maintenance costs	58
Cost of capital	28
Working capital	24
Sales	2
Total	$	229

The filing also seeks approval of a revenue decoupling mechanism that would annually reconcile Consumers’ actual weather-normalized non-fuel revenues with the revenues approved by the MPSC; similar to the mechanism previously approved by the MPSC, this reconciliation would commence when the projected twelve-month period covered by the filing ends and continue until the MPSC resets rates in a subsequent rate case.

Gas Pipeline and Storage Integrity and Safety: In October 2019, PHMSA published a final rule that expands federal safety standards for gas transmission pipelines. To comply with the rule, Consumers will incur increased capital costs to install and remediate pipelines as well as increased operating and maintenance costs to expand inspections, maintenance, and monitoring of its existing pipelines. The requirements in the regulation took effect July 1, 2020, with various implementation phases over numerous years.

In February 2020, PHMSA finalized an interim rule it had published in 2016; this rule established minimum federal safety standards for underground natural gas storage facilities. To comply with the rule, Consumers incurred increased capital and operating and maintenance costs to expand inspections, maintenance, and monitoring of its underground gas storage facilities.

Although associated capital or operating and maintenance costs relating to these regulations could be material and cost recovery cannot be assured, Consumers expects to recover such costs and capital expenditures in rates consistent with the recovery of other reasonable costs of complying with laws and regulations. Consumers will continue to monitor gas safety regulations and continue implementation of the American Petroleum Institute’s Recommended Practice 1173, Pipeline Safety Management Systems. This program minimizes gas system asset- and performance-related risks by ensuring that there are policies, procedures, work instructions, forms, and records in place to streamline adoption and deployment of any existing or future regulations.

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.

Greenhouse Gases: Consumers is making voluntary efforts to reduce its gas utility’s methane emissions. In October 2019, Consumers set a goal of net‑zero methane emissions from its natural gas delivery system by 2030. Under its Methane Reduction Plan, Consumers plans to reduce methane emissions from

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its system by about 80 percent by accelerating the replacement of aging pipe, rehabilitating or retiring outdated infrastructure, and adopting new technologies and practices. The remaining emissions will be eliminated by purchasing and/or producing renewable natural gas.

There is also increasing interest at the federal, state, and local levels involving potential regulation of greenhouse gases or its sources, which include methane emissions and carbon dioxide from Consumers’ gas utility. Such regulation, if adopted, may involve requirements to reduce methane and carbon dioxide emissions from natural gas use. No such measures apply to Consumers at this time. Consumers continues to monitor these initiatives and comment as appropriate. Consumers cannot predict the impact of any potential future legislation or regulation on its gas utility.

Consumers Electric Utility and Gas Utility Outlook and Uncertainties

Energy Waste Reduction Plan: The 2016 Energy Law authorized incentives for demand response programs and expanded existing incentives for energy efficiency programs, referring to the combined initiatives as energy waste reduction programs. The 2016 Energy Law:

• extended the requirement to achieve annual reductions of 1.0 percent in customers’ electricity use through 2021 and 0.75 percent in customers’ natural gas use indefinitely

• removed limits on investments under the program and provided for a higher return on those investments; together, these provisions effectively doubled the financial incentives Consumers may earn for exceeding the statutory targets

• established a goal of 35 percent combined renewable energy and energy waste reduction by 2025; Consumers has achieved 22 percent of the combined renewable energy and energy waste reduction goal through 2019

Additionally, the MPSC has approved the recovery of demand response costs and an associated financial incentive based on demand response target performance.

Under its energy waste reduction plan, Consumers provides its customers with incentives to reduce usage by offering energy audits, rebates and discounts on purchases of highly efficient appliances, and other incentives and programs. The COVID‑19 pandemic may impact Consumers’ ability to execute energy efficiency programs effectively and, accordingly, could affect Consumers’ ability to exceed its statutory savings targets and earn the energy waste reduction incentive for 2020. Consumers cannot predict the ultimate financial impact of the pandemic on its 2020 energy waste reduction incentive.

Enterprises Outlook and Uncertainties

CMS Energy’s primary focus with respect to its enterprises businesses is to maximize the value of generating assets, its share of which represents 1,234 MW of capacity, and to pursue opportunities for the development of renewable generation projects.

In June 2020, CMS Enterprises purchased development rights for a solar project in Hart Township, Michigan with a potential to develop up to 100 MW of solar capacity. CMS Enterprises is presently in the process of procuring a long-term PPA after which the project will proceed to full construction.

In July 2020, CMS Enterprises purchased a 51-percent ownership interest in a 525-MW wind generation project being constructed in Coke County, Texas; the project is expected to become operational in August 2020. Of the project’s 525-MW nameplate capacity, 220 MW has been committed under a 15-year PPA and 200 MW has been committed under a 12-year PPA. Upon commercial operation of the project, a noncontrolling membership interest will be sold to BHE Renewables, LLC, a subsidiary of Berkshire Hathaway Energy Company, who will serve as the tax equity investor; earnings, tax attributes, and cash

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flows generated by the project will be allocated to the tax equity investor in accordance with the ratios specified in the associated limited liability company agreement, which change over time. CMS Enterprises will retain a controlling interest in the project.

The enterprises segment’s assets may be affected by environmental laws and regulations. The 2015 ozone NAAQS made it more difficult to construct or modify power plants and other emission sources in areas of the country that have not met the 2015 ozone standard. In 2018, the EPA designated certain areas of Michigan as not meeting the ozone standard. The enterprises segment’s DIG plant located in Dearborn, Michigan is in one such area and, as a result, would be subject to additional permitting restrictions in the event of any future modifications. For additional details regarding the new ozone NAAQS, see Consumers Electric Utility Outlook and Uncertainties—Electric Environmental Outlook.

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

• investment in and financial benefits received from renewable energy and energy storage projects

• changes in energy and capacity prices

• severe weather events and climate change associated with increasing levels of greenhouse gases

• 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, including gas price reporting litigation

• indemnity and environmental remediation obligations at Bay Harbor, including an inability to renew an NPDES permit in 2020

• 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.

EnerBank Outlook and Uncertainties

EnerBank is a Utah state-chartered, FDIC-insured industrial bank providing primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements. The carrying value of EnerBank’s loan portfolio was $2.6 billion at June 30, 2020. The 12‑month rolling average net default rate on loans held by EnerBank was 1.2 percent at June 30, 2020. For additional details regarding EnerBank’s loan portfolio, see Note 7, Notes Receivable.

EnerBank’s loan portfolio was funded primarily by certificates of deposit of $2.5 billion at June 30, 2020. 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 June 30, 2020.

With its loan portfolio funded by certificates of deposit, EnerBank has not had to rely on access to the financial and capital markets in order to fund loan growth during the COVID-19 pandemic. As a result, EnerBank has experienced market share gains as new customers have transitioned from less financially stable competitors. Accordingly, EnerBank has experienced increased lending growth in recent months and expects this trend to continue during the remainder of 2020. Over the next five years, EnerBank expects lending growth to average approximately ten percent annually.

45

As a result of the COVID‑19 pandemic, EnerBank has instituted new payment accommodations for current customers. EnerBank cannot predict the longer-term impacts of the pandemic, but could experience slower lending growth, higher loan write-offs, and increased loan modifications.

Other Outlook and Uncertainties

Employee Separation Program: In December 2019, CMS Energy and Consumers announced a voluntary separation program for non‑union employees. For the six months ended June 30, 2020, CMS Energy and Consumers recorded an after-tax charge of $8 million related to the program, under which 140 employees accepted and were approved for early separation. As a result of the program, CMS Energy and Consumers expect to benefit from future cost savings, as employee staffing levels will be better matched to workload demand, which reflects the companies’ ongoing workforce productivity improvements.

Union Contract: The present UWUA agreement for operating, maintenance, and construction employees expired in June 2020. Consumers has suspended in-person negotiations due to the COVID‑19 pandemic; however, Consumers executed an agreement with the UWUA to reach a tentative agreement within two weeks once the in-person restrictions are lifted. This agreement provided a three-percent pay increase to operating, maintenance, and construction employees effective on June 1, 2020. Once a tentative agreement is reached, it would then need to be ratified by UWUA members.

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.

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47

CMS Energy Corporation

Consolidated Statements of Income (Unaudited)

In Millions, Except Per Share Amounts
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
Operating Revenue		$	1,443			$	1,445			$	3,307			$	3,504
Operating Expenses
Fuel for electric generation		63				119				166				261
Purchased and interchange power		362				356				719				734
Purchased power – related parties		14				16				32				34
Cost of gas sold		82				106				355				510
Maintenance and other operating expenses		351				343				666				697
Depreciation and amortization		223				216				539				514
General taxes		75				71				189				177
Total operating expenses		1,170				1,227				2,666				2,927
Operating Income		273				218				641				577
Other Income (Expense)
Interest income		1				2				2				3
Interest income – related parties		—				—				7				—
Allowance for equity funds used during construction		2				3				3				5
Income (loss) from equity method investees		(2		)		2				1				1
Nonoperating retirement benefits, net		30				23				61				46
Other income		2				2				2				3
Other expense		(1		)		(5		)		(5		)		(8		)
Total other income		32				27				71				50
Interest Charges
Interest on long-term debt		121				110				237				216
Interest expense – related parties		3				3				6				3
Other interest expense		17				19				36				35
Allowance for borrowed funds used during construction		—				(1		)		(1		)		(2		)
Total interest charges		141				131				278				252
Income Before Income Taxes		164				114				434				375
Income Tax Expense		27				20				54				68
Net Income		137				94				380				307
Income Attributable to Noncontrolling Interests		1				1				1				1
Net Income Available to Common Stockholders		$	136			$	93			$	379			$	306
Basic Earnings Per Average Common Share		$	0.48			$	0.33			$	1.33			$	1.08
Diluted Earnings Per Average Common Share		$	0.48			$	0.33			$	1.33			$	1.08

The accompanying notes are an integral part of these statements.

48

CMS Energy Corporation

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
Net Income		$	137			$	94			$	380			$	307
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax of $1, $-, $1, and $-		1				1				2				2
Amortization of prior service credit, net of tax of $- for all periods		(1		)		—				(1		)		(1		)
Derivatives
Unrealized loss on derivative instruments, net of tax of $-, $(1), $(1), and $(1)		—				(2		)		(4		)		(3		)
Other Comprehensive Loss		—				(1		)		(3		)		(2		)
Comprehensive Income		137				93				377				305
Comprehensive Income Attributable to Noncontrolling Interests		1				1				1				1
Comprehensive Income Attributable to CMS Energy		$	136			$	92			$	376			$	304

The accompanying notes are an integral part of these statements.

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50

CMS Energy Corporation

Consolidated Statements of Cash Flows (Unaudited)

In Millions
Six Months Ended June 30	2020				2019
Cash Flows from Operating Activities
Net income		$	380			$	307
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		539				514
Deferred income taxes and investment tax credits		95				60
Pension contributions		(531		)		—
Other non-cash operating activities and reconciling adjustments		20				9
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable and accrued revenue		130				190
Inventories		99				98
Accounts payable and accrued rate refunds		23				(48		)
Other current and non-current assets and liabilities		41				55
Net cash provided by operating activities		796				1,185
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)		(946		)		(973		)
Increase in EnerBank notes receivable		(148		)		(170		)
Purchase of notes receivable by EnerBank		(15		)		(220		)
Cost to retire property and other investing activities		(59		)		(47		)
Net cash used in investing activities		(1,168		)		(1,410		)
Cash Flows from Financing Activities
Proceeds from issuance of debt		2,353				1,455
Retirement of debt		(392		)		(1,104		)
Increase in EnerBank certificates of deposit		132				371
Decrease in notes payable		(90		)		(97		)
Issuance of common stock, net of issuance costs		104				6
Payment of dividends on common and preferred stock		(234		)		(218		)
Other financing costs		(54		)		(29		)
Net cash provided by financing activities		1,819				384
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts		1,447				159
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period		157				175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period		$	1,604			$	334
Other Non-cash Investing and Financing Activities
Non-cash transactions
Capital expenditures not paid		$	167			$	150

The accompanying notes are an integral part of these statements.

51

CMS Energy Corporation

Consolidated Balance Sheets (Unaudited)

ASSETS
In Millions
	June 30 2020			December 31 2019
Current Assets
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Accounts receivable and accrued revenue, less allowance of $33 in 2020 and $20 in 2019		737			886
Notes receivable, less allowance of $35 in 2020 and $33 in 2019		264			242
Accounts and notes receivable – related parties		20			17
Inventories at average cost
Gas in underground storage		285			399
Materials and supplies		150			140
Generating plant fuel stock		71			66
Deferred property taxes		223			305
Regulatory assets		16			33
Prepayments and other current assets		162			86
Total current assets		3,532			2,331
Plant, Property, and Equipment
Plant, property, and equipment, gross		25,911			25,390
Less accumulated depreciation and amortization		7,697			7,360
Plant, property, and equipment, net		18,214			18,030
Construction work in progress		1,222			896
Total plant, property, and equipment		19,436			18,926
Other Non-current Assets
Regulatory assets		2,485			2,489
Accounts and notes receivable, less allowance of $69 in 2020 and $- in 2019		2,353			2,281
Investments		68			71
Other		707			739
Total other non-current assets		5,613			5,580
Total Assets		$	28,581		$	26,837

52

LIABILITIES AND EQUITY
In Millions
	June 30 2020				December 31 2019
Current Liabilities
Current portion of long-term debt, finance leases, and other financing		$	1,744			$	1,130
Notes payable		—				90
Accounts payable		629				622
Accounts payable – related parties		6				13
Accrued rate refunds		44				35
Accrued interest		109				104
Accrued taxes		326				437
Regulatory liabilities		84				87
Other current liabilities		181				186
Total current liabilities		3,123				2,704
Non-current Liabilities
Long-term debt		13,414				11,951
Non-current portion of finance leases and other financing		67				76
Regulatory liabilities		3,809				3,742
Postretirement benefits		140				674
Asset retirement obligations		483				477
Deferred investment tax credit		118				120
Deferred income taxes		1,763				1,655
Other non-current liabilities		413				383
Total non-current liabilities		20,207				19,078
Commitments and Contingencies (Notes 2 and 3)
Equity
Common stockholders’ equity
Common stock, authorized 350.0 shares; outstanding 286.3 shares in 2020 and 283.9 shares in 2019		3				3
Other paid-in capital		5,217				5,113
Accumulated other comprehensive loss		(76		)		(73		)
Retained earnings (accumulated deficit)		70				(25		)
Total common stockholders’ equity		5,214				5,018
Noncontrolling interests		37				37
Total equity		5,251				5,055
Total Liabilities and Equity		$	28,581			$	26,837

The accompanying notes are an integral part of these statements.

53

CMS Energy Corporation

Consolidated Statements of Changes in Equity (Unaudited)

In Millions, Except Per Share Amounts
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
Total Equity at Beginning of Period		$	5,222			$	4,895			$	5,055			$	4,792
Common Stock
At beginning and end of period		3				3				3				3
Other Paid-in Capital
At beginning of period		5,207				5,087				5,113				5,088
Common stock issued		11				10				117				17
Common stock repurchased		(1		)		—				(13		)		(8		)
At end of period		5,217				5,097				5,217				5,097
Accumulated Other Comprehensive Loss
At beginning of period		(76		)		(66		)		(73		)		(65		)
Retirement benefits liability
At beginning of period		(68		)		(63		)		(69		)		(63		)
Amortization of net actuarial loss		1				1				2				2
Amortization of prior service credit		(1		)		—				(1		)		(1		)
At end of period		(68		)		(62		)		(68		)		(62		)
Derivative instruments
At beginning of period		(8		)		(3		)		(4		)		(2		)
Unrealized loss on derivative instruments		—				(2		)		(4		)		(3		)
At end of period		(8		)		(5		)		(8		)		(5		)
At end of period		(76		)		(67		)		(76		)		(67		)
Retained Earnings (Accumulated Deficit)
At beginning of period		51				(166		)		(25		)		(271		)
Cumulative effect of change in accounting principle		—				—				(51		)		—
Net income attributable to CMS Energy		136				93				379				306
Dividends declared on common stock		(117		)		(109		)		(233		)		(217		)
At end of period		70				(182		)		70				(182		)
Noncontrolling Interests
At beginning of period		37				37				37				37
Income attributable to noncontrolling interests		1				1				1				1
Distributions and other changes in noncontrolling interests		(1		)		(1		)		(1		)		(1		)
At end of period		37				37				37				37
Total Equity at End of Period		$	5,251			$	4,888			$	5,251			$	4,888
Dividends Declared Per Common Share		$	0.4075			$	0.3825			$	0.8150			$	0.7650
The accompanying notes are an integral part of these statements.

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55

Consumers Energy Company

Consolidated Statements of Income (Unaudited)

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
Operating Revenue		$	1,330			$	1,334			$	3,074			$	3,277
Operating Expenses
Fuel for electric generation		43				88				122				194
Purchased and interchange power		354				350				701				724
Purchased power – related parties		14				16				32				34
Cost of gas sold		80				104				350				505
Maintenance and other operating expenses		302				320				580				639
Depreciation and amortization		218				212				530				506
General taxes		73				69				184				172
Total operating expenses		1,084				1,159				2,499				2,774
Operating Income		246				175				575				503
Other Income (Expense)
Interest income		1				1				2				2
Interest and dividend income – related parties		1				1				2				2
Allowance for equity funds used during construction		2				3				3				5
Nonoperating retirement benefits, net		28				22				57				43
Other income		2				1				2				2
Other expense		(2		)		(5		)		(5		)		(8		)
Total other income		32				23				61				46
Interest Charges
Interest on long-term debt		77				68				151				137
Interest expense – related parties		3				3				6				3
Other interest expense		2				4				5				7
Allowance for borrowed funds used during construction		—				(1		)		(1		)		(2		)
Total interest charges		82				74				161				145
Income Before Income Taxes		196				124				475				404
Income Tax Expense		36				26				80				80
Net Income		160				98				395				324
Preferred Stock Dividends		1				1				1				1
Net Income Available to Common Stockholder		$	159			$	97			$	394			$	323

The accompanying notes are an integral part of these statements.

56

Consumers Energy Company

Consolidated Statements of Comprehensive Income (Unaudited)

In Millions
	Three Months Ended						Six Months Ended
June 30	2020			2019			2020			2019
Net Income		$	160		$	98		$	395		$	324
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax of $-, $-, $1, and $-		—			1			—			1
Other Comprehensive Income		—			1			—			1
Comprehensive Income		$	160		$	99		$	395		$	325

The accompanying notes are an integral part of these statements.

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58

Consumers Energy Company

Consolidated Statements of Cash Flows (Unaudited)

In Millions
Six Months Ended June 30	2020			2019
Cash Flows from Operating Activities
Net income	$	395		$	324
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	530			506
Deferred income taxes and investment tax credits	67			41
Pension contributions	(518		)	—
Other non-cash operating activities and reconciling adjustments	(4		)	4
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable and accrued revenue	158			187
Inventories	99			96
Accounts payable and accrued rate refunds	18			(41		)
Other current and non-current assets and liabilities	36			(7		)
Net cash provided by operating activities	781			1,110
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(936		)	(963		)
Cost to retire property and other investing activities	(57		)	(63		)
Net cash used in investing activities	(993		)	(1,026		)
Cash Flows from Financing Activities
Proceeds from issuance of debt	1,528			297
Retirement of debt	(363		)	(528		)
Decrease in notes payable	(90		)	(97		)
Stockholder contribution	650			675
Payment of dividends on common and preferred stock	(277		)	(273		)
Other financing costs	(35		)	(2		)
Net cash provided by financing activities	1,413			72
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts	1,201			156
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	28			56
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	$	1,229		$	212
Other Non-cash Investing and Financing Activities
Non-cash transactions
Capital expenditures not paid	$	157		$	138

The accompanying notes are an integral part of these statements.

59

Consumers Energy Company

Consolidated Balance Sheets (Unaudited)

ASSETS
In Millions
	June 30 2020			December 31 2019
Current Assets
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Accounts receivable and accrued revenue, less allowance of $33 in 2020 and $20 in 2019		653			827
Accounts and notes receivable – related parties		8			9
Inventories at average cost
Gas in underground storage		285			399
Materials and supplies		145			135
Generating plant fuel stock		68			63
Deferred property taxes		223			305
Regulatory assets		16			33
Prepayments and other current assets		143			73
Total current assets		2,770			1,872
Plant, Property, and Equipment
Plant, property, and equipment, gross		25,468			24,963
Less accumulated depreciation and amortization		7,600			7,272
Plant, property, and equipment, net		17,868			17,691
Construction work in progress		1,211			879
Total plant, property, and equipment		19,079			18,570
Other Non-current Assets
Regulatory assets		2,485			2,489
Accounts receivable		26			29
Accounts and notes receivable – related parties		101			102
Other		599			637
Total other non-current assets		3,211			3,257
Total Assets		$	25,060		$	23,699

60

LIABILITIES AND EQUITY
In Millions
	June 30 2020				December 31 2019
Current Liabilities
Current portion of long-term debt, finance leases, and other financing		$	556			$	221
Notes payable		—				90
Accounts payable		595				593
Accounts payable – related parties		13				20
Accrued rate refunds		44				35
Accrued interest		70				67
Accrued taxes		341				481
Regulatory liabilities		84				87
Other current liabilities		117				118
Total current liabilities		1,820				1,712
Non-current Liabilities
Long-term debt		7,867				7,048
Non-current portion of finance leases and other financing		67				76
Regulatory liabilities		3,809				3,742
Postretirement benefits		102				622
Asset retirement obligations		480				474
Deferred investment tax credit		118				120
Deferred income taxes		1,958				1,864
Other non-current liabilities		334				304
Total non-current liabilities		14,735				14,250
Commitments and Contingencies (Notes 2 and 3)
Equity
Common stockholder’s equity
Common stock, authorized 125.0 shares; outstanding 84.1 shares in both periods		841				841
Other paid-in capital		6,024				5,374
Accumulated other comprehensive loss		(28		)		(28		)
Retained earnings		1,631				1,513
Total common stockholder’s equity		8,468				7,700
Cumulative preferred stock, $4.50 series		37				37
Total equity		8,505				7,737
Total Liabilities and Equity		$	25,060			$	23,699

The accompanying notes are an integral part of these statements.

61

Consumers Energy Company

Consolidated Statements of Changes in Equity (Unaudited)

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
Total Equity at Beginning of Period		$	8,103			$	7,324			$	7,737			$	6,920
Common Stock
At beginning and end of period		841				841				841				841
Other Paid-in Capital
At beginning of period		5,724				5,049				5,374				4,699
Stockholder contribution		300				325				650				675
At end of period		6,024				5,374				6,024				5,374
Accumulated Other Comprehensive Loss
At beginning of period		(28		)		(21		)		(28		)		(21		)
Retirement benefits liability
At beginning of period		(28		)		(21		)		(28		)		(21		)
Amortization of net actuarial loss		—				1				—				1
At end of period		(28		)		(20		)		(28		)		(20		)
At end of period		(28		)		(20		)		(28		)		(20		)
Retained Earnings
At beginning of period		1,529				1,418				1,513				1,364
Net income		160				98				395				324
Dividends declared on common stock		(57		)		(100		)		(276		)		(272		)
Dividends declared on preferred stock		(1		)		(1		)		(1		)		(1		)
At end of period		1,631				1,415				1,631				1,415
Preferred Stock
At beginning and end of period		37				37				37				37
Total Equity at End of Period		$	8,505			$	7,647			$	8,505			$	7,647

The accompanying notes are an integral part of these statements.

62

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 may have reclassified certain prior period amounts to conform to the presentation in the present period and to reflect the implementation of new accounting standards. CMS Energy and Consumers are required to make estimates using assumptions that may affect reported amounts and disclosures; actual results could differ from these estimates. In management’s opinion, the unaudited information contained in this report reflects all adjustments of a normal recurring nature necessary to ensure that CMS Energy’s and Consumers’ financial position, results of operations, and cash flows for the periods presented are fairly stated. 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 2019 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 2016‑13, Measurement of Credit Losses on Financial Instruments: This standard, which was effective on January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments. The standard applies to financial assets that are not measured at fair value through net income as well as to certain off‑balance-sheet credit exposures. CMS Energy and Consumers were required to apply the standard using a modified retrospective approach, under which the initial impacts of the standard are recorded through a cumulative‑effect adjustment to beginning retained earnings on the effective date.

The standard required an increase to the allowance for loan losses at EnerBank. Prior to the standard, the allowance reflected expected credit losses over a 12‑month period, but the new guidance requires the allowance to reflect expected credit losses over the entire life of the loans. As a result, CMS Energy recorded a $65 million increase to its expected credit loss reserves on January 1, 2020, with the offsetting adjustment recorded to retained earnings, net of taxes of $14 million. The standard also requires an increase in the initial provision for loan losses recognized in net income for new loans originated in 2020 and beyond. The adoption of this standard resulted in a $9 million reduction to CMS Energy’s income before income taxes for the six months ended June 30, 2020. For further information on EnerBank’s loans and the related allowance for loan losses, see Note 7, Notes Receivable. At Consumers, the standard applies to the allowance for uncollectible accounts, but did not result in any significant changes to the allowance methodology and did not have a material impact on Consumers’ consolidated financial statements.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting: This standard, which was effective as of March 12, 2020 for CMS Energy and Consumers, provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain

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contracts to replace LIBOR with a new reference rate. The guidance, if elected, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. The guidance will also facilitate the continuation of hedge accounting for derivatives that may have to be modified to incorporate a new rate. The guidance is effective through December 31, 2022. CMS Energy and Consumers presently have various contracts that reference LIBOR and they are assessing how this standard may be applied to specific contract modifications.

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 recovery from customers, the adequacy of the record of evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

COVID‑19 Costs Accounting Deferral: In April 2020, the MPSC issued an order authorizing Consumers to defer uncollectible accounts expense incurred beginning March 24, 2020 that are in excess of the amount used to set existing rates. At June 30, 2020, Consumers recorded $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. The order also requested that interested parties submit comments by the end of April 2020 regarding utility accounting for COVID‑19-related expenses and COVID‑19-related impacts to regulatory activities. In July 2020, the MPSC issued an order denying deferred accounting treatment for any additional cost categories beyond uncollectible accounts expense.

Voluntary Transmission Asset Sale Gain Share: In September 2019, Consumers completed a sale of a portion of its electric utility’s substation transmission equipment to METC. In December 2019, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with customers; this application was approved by the MPSC in April 2020. As a result, Consumers deferred $17 million of the gain as a regulatory liability in 2019 and will share that gain with customers through an offset to additional spending in 2020 or through a bill credit to customers in 2021. During June 2020, Consumers recognized a portion of the deferred gain as an offset to storm costs that exceeded those currently recovered through rates. At June 30, 2020, Consumers had a remaining current regulatory liability of $15 million.

Energy Waste Reduction Plan Incentive: Consumers filed its 2019 waste reduction reconciliation in June 2020, requesting the MPSC’s approval to collect from customers the maximum performance incentive of $34 million for exceeding its statutory savings targets in 2019. Consumers recognized incentive revenue under this program of $34 million in 2019.

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

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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, were 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. In 2016, CMS Energy entities reached a settlement with the plaintiffs in the Kansas and Missouri class action cases for an amount that was not material to CMS Energy. In 2017, the federal district court approved the settlement. Plaintiffs are making claims for 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.

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 were remanded back to the federal district court.

In 2016, the federal district court granted the defendants’ motion for summary judgment in the individual lawsuit filed in Kansas based on a release in a prior settlement involving similar allegations; the order of summary judgment was subsequently appealed. In 2018, the U.S. Court of Appeals for the Ninth Circuit reversed the lower court’s ruling and remanded the case back to the federal district court.

In 2017, the federal district court denied plaintiffs’ motion for class certification in the two pending class action cases in Wisconsin. The plaintiffs appealed that decision to the U.S. Court of Appeals for the Ninth Circuit and in 2018, the Ninth Circuit Court of Appeals reversed and remanded the matter back to the federal district court for further consideration.

In January 2019, the judge in the multidistrict litigation granted motions filed by plaintiffs for Suggestion of Remand of the actions back to the respective transferor courts in Wisconsin and Kansas for further handling. In the Kansas action, the Judicial Panel on Multidistrict Litigation ordered the remand and the case has been transferred. In the Wisconsin actions, oppositions to the remand were filed, but the Judicial Panel on Multidistrict Litigation granted the remand in June 2019.

In 2019, CMS Energy and the plaintiffs in each of the Kansas and the Wisconsin actions engaged in settlement discussions and CMS Energy recorded a $30 million liability at December 31, 2019 as the probable estimate to settle the two cases. The parties executed a settlement agreement in the Kansas case in February 2020, and that case is now complete. The parties executed a settlement agreement in the Wisconsin case, and a motion for preliminary approval was filed with the Federal District Court in March 2020. In April 2020, the Wisconsin court issued a preliminary approval order. A fairness hearing will occur in August 2020. CMS Energy can give no assurances that the Wisconsin court will approve the settlement. If settlement is not approved and the outcome after appeals is unfavorable to CMS Energy, the

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remaining Wisconsin case 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 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 EGLE 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, which is valid through September 2020. CMS Land submitted a renewal request for the permit in April 2020.

At June 30, 2020, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. 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 $56 million. CMS Energy expects to pay the following amounts for long‑term leachate disposal and operating and maintenance costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
CMS Energy
Long‑term leachate disposal and operating and maintenance costs		$	3		$	4		$	4		$	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, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating. CMS Energy has concluded that the government’s tax claim is without merit and will continue to contest 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 $4 million. At June 30, 2020, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

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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 and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At June 30, 2020, 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, as no amount in the range was considered a better estimate than any other amount.

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 the Ludington pumped-storage plant. 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, but cannot predict the financial impact or outcome.

MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. Under this PPA, Consumers pays the MCV Partnership a fixed energy charge based on Consumers’ annual average baseload coal generating plant operating and maintenance cost, fuel inventory, and administrative and general expenses. The MCV Partnership asserts that, under the Clean Air Act, Consumers should have installed pollution control equipment on coal‑fueled electric generating units years before they were retired. The MCV Partnership also asserts that Consumers should have installed pollution control equipment earlier on its remaining coal‑fueled electric generating units. Additionally, the MCV Partnership claims that Consumers improperly characterized certain costs included in the calculation of the fixed energy charge.

In January 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with its claim against Consumers related to the Clean Air Act; the majority of the MCV Partnership’s claim, which estimated damages and interest in excess of $270 million, was related to this dismissed claim. In April 2020, the MCV Partnership and Consumers signed a term sheet outlining a settlement in principle of all outstanding disputes between the parties. The settlement and associated agreements will require MPSC approval. Once those are approved, the parties will dismiss this matter with prejudice. If settlement is not approved, the arbitration panel will issue an order. Consumers believes that the MCV Partnership’s claims are without merit, but cannot predict the financial impact or outcome of the matter.

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Underwater Cables in Straits of Mackinac: Consumers owns certain underwater electric cables in the Straits of Mackinac, which were de‑energized and retired in 1990. Consumers was notified that some of these cables were damaged as a result of vessel activity in 2018. Following the notification, Consumers located, inspected, sampled, capped, and returned the damaged retired cables to their original location on the lake bottom, and did not find any substantive evidence of environmental contamination. After collaborating with the State of Michigan, local Native American tribes, and other stakeholders, Consumers submitted a permit application and removal work plan with EGLE and the U.S. Army Corps of Engineers in December 2019 for partial removal of all Consumers-owned cables. In March 2020, EGLE issued a permit for the removal work and, as a result, Consumers recorded an ARO liability of $5 million for the cost to remove partially its cables. Removal work is expected to be complete in August 2020. Consumers recovers the cost of recorded AROs through MPSC-approved depreciation rates.

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 June 30, 2020, Consumers had a recorded liability of $63 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 $67 million. Consumers expects to pay the following amounts for remediation and other response activity costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
Consumers
Remediation and other response activity costs		$	7		$	8		$	20		$	11		$	2		$	2

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.

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 June 30, 2020, Consumers had a regulatory asset of $126 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 June 30, 2020, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to

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Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

As a result of the fire and the resulting curtailment, Consumers could be subject to disallowances of gas purchased and costs associated with the repairs to the Ray Compressor Station. Consumers’ incremental cost of gas purchased during the incident was $7 million. Additionally, at June 30, 2020, Consumers had incurred capital expenditures of $12 million to restore the compressor station.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages. At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at June 30, 2020:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from stock and asset sale agreements¹	various	indefinite		$	153		$	2
Guarantee²	July 2011	indefinite		30			—
Consumers
Guarantee²	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. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

²  This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

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 carrying value of these indemnity obligations is $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.

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Other Contingencies

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, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims 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 and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

4:    Financings and Capitalization

Financings: Presented in the following table is a summary of major long‑term debt issuances during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Junior subordinated notes²		500		4.750	%	May	June 2050
Total CMS Energy, parent only		$	800
Consumers
Term loan facility³		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds4		134		variable		May	May 2070
Total Consumers		$	1,534
Total CMS Energy		$	2,334

¹  At June 30, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

³  At June 30, 2020, the interest rate on the balance of this term loan facility was 0.556 percent, based on an interest rate of one‑week LIBOR plus 0.450 percent.

⁴  The variable rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent (0.077 percent at June 30, 2020).

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Presented in the following table is a summary of major long‑term debt retirements during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
Total Consumers		$	350
Total CMS Energy		$	350

In July 2020, Consumers purchased, in lieu of redemption, $35 million of variable-rate tax-exempt revenue bonds due April 2035.

Revolving Credit Facilities: The following revolving credit facilities with banks were available at June 30, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023		$	550		$	—		$	5		$	545
CMS Enterprises, including subsidiaries
September 30, 2025¹		$	18		$	—		$	8		$	10
Consumers²
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			1			249
April 18, 2022		30			—			30			—

¹  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

²  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Short‑term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At June 30, 2020, there were no commercial paper notes outstanding under this program.

Dividend Restrictions: At June 30, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.2 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at June 30, 2020, Consumers had $1.6 billion 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

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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 six months ended June 30, 2020, Consumers paid $276 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million. In March 2020, CMS Energy settled one of these contracts by issuing 2,017,783 shares of common stock for $47.95 per share, resulting in net proceeds of $97 million.

At June 30, 2020, CMS Energy’s remaining forward sales contracts under this program had an aggregate sales price of $150 million. Presented in the following table are details of these contracts:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			June 30, 2020
November 20, 2018	March 31, 2021	777,899		$	50.91		$	49.32
February 21, 2019	March 31, 2021	2,083,340		52.27			50.88

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of June 30, 2020, CMS Energy would have been required to deliver 390,008 shares.

In April 2020, CMS Energy entered into a new equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $500 million. Like the 2018 equity offering program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise. There have been no sales of securities under this program.

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

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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
	June 30 2020			December 31 2019			June 30 2020			December 31 2019
Assets¹
Cash equivalents		$	100		$	—		$	100		$	—
Restricted cash and cash equivalents		17			17			14			17
CMS Energy common stock		—			—			1			1
Nonqualified deferred compensation plan assets		19			18			15			14
Derivative instruments		3			1			3			1
Total		$	139		$	36		$	133		$	33
Liabilities¹
Nonqualified deferred compensation plan liabilities		$	19		$	18		$	15		$	14
Derivative instruments		21			8			1			—
Total		$	40		$	26		$	16		$	14

¹  All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 12, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount owed to the plan participants in accordance

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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.

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 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market‑based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations and certain notes receivable at EnerBank.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $88 million at June 30, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within other interest expense on CMS Energy’s consolidated statements of income. The amount of losses recorded in other comprehensive loss was less than $1 million for the three months ended June 30, 2020 and $3 million for the three months ended June 30, 2019. The amount of losses recorded in other comprehensive loss was $5 million for the six months ended June 30, 2020 and $4 million for the six months ended June 30, 2019. There were no material impacts on other interest expense associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $10 million at June 30, 2020 and $5 million at December 31, 2019. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the three and six months ended June 30, 2020 and 2019.

EnerBank uses fixed-to-floating interest rate swaps to manage interest rate risk exposure associated with changes in the fair value of certain long‑term fixed-rate loans. The interest rate swaps qualify as fair value hedges of long‑term, fixed-rate notes receivable with a notional amount of $134 million at June 30, 2020. The fair value of these interest rate swaps recorded in other liabilities was $7 million at June 30, 2020 and $1 million at December 31, 2019. CMS Energy is adjusting the carrying value of the hedged notes receivable for the change in their fair value due to the hedged risk. Both gains and losses on the swaps and the changes to the carrying value of the hedged notes receivable are recorded within operating revenue on CMS Energy’s consolidated statements of income. The net impact of these hedges on operating revenue was not material for the three and six months ended June 30, 2020 and 2019.

The majority of derivatives classified as Level 3 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. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

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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 excludes cash, cash equivalents, short‑term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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
	June 30, 2020															December 31, 2019
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable2		2,597			2,896			—			—			2,896			2,500			2,652			—			—			2,652
Securities held to maturity		29			29			—			29			—			26			26			—			26			—
Liabilities
Long-term debt3		15,139			17,154			1,150			14,290			1,714			13,062			14,185			1,197			11,048			1,940
Long-term payables4		31			32			—			—			32			30			32			—			—			32
Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable – related party5		103			103			—			—			103			103			103			—			—			103
Liabilities
Long-term debt6		8,404			9,912			—			8,198			1,714			7,250			8,010			—			6,070			1,940

¹  Includes current portion of long-term accounts receivable of $12 million at June 30, 2020 and $13 million at December 31, 2019.

²  Includes current portion of notes receivable of $264 million at June 30, 2020 and $242 million at December 31, 2019. For further details, see Note 7, Notes Receivable.

³  Includes current portion of long‑term debt of $1.7 billion at June 30, 2020 and $1.1 billion at December 31, 2019.

⁴  Includes current portion of long‑term payables of $6 million at June 30, 2020 and $1 million at December 31, 2019.

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⁵  Includes current portion of notes receivable – related party of $7 million at June 30, 2020 and December 31, 2019. For further details, see Note 7, Notes Receivable.

⁶  Includes current portion of long‑term debt of $537 million at June 30, 2020 and $202 million at December 31, 2019.

The effects of third‑party credit enhancements were excluded from the fair value measurements of long‑term debt. The principal amount of CMS Energy’s long‑term debt supported by third‑party credit enhancements was $35 million at June 30, 2020 and December 31, 2019. The entirety of these amounts was at Consumers.

Debt securities classified as held to maturity consisted primarily of mortgage‑backed securities and Utah Housing Corporation bonds held by EnerBank. Presented in the following table are these investment securities:

In Millions
	June 30, 2020												December 31, 2019
	Cost			Unrealized Gains			Unrealized Losses			Fair Value			Cost			Unrealized Gains			Unrealized Losses			Fair Value
CMS Energy
Debt securities		$	29		$	—		$	—		$	29		$	26		$	—		$	—		$	26

7:    Notes Receivable

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

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	264		$	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses		2,333			2,258
Total notes receivable		$	2,597		$	2,500
Consumers
Current
DB SERP note receivable – related party		$	7		$	7
Non‑current
DB SERP note receivable – related party		96			96
Total notes receivable		$	103		$	103

EnerBank Notes Receivable

EnerBank notes receivable are primarily unsecured, fixed-rate installment loans provided throughout the U.S. to finance home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. 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

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reduction to notes receivable on CMS Energy’s consolidated balance sheets, was $131 million at June 30, 2020 and $134 million at December 31, 2019.

During the six months ended June 30, 2020, EnerBank purchased a portfolio of secured and unsecured consumer installment loans with a principal value of $17 million.

EnerBank utilizes FICO scores as a key credit quality indicator when underwriting new loans and in assessing the credit exposures in its loan portfolio. The score is determined at the time of a borrower’s application and is generally not updated since the average duration of loans is about two years. At June 30, 2020, 85 percent of EnerBank’s loans had a FICO score rating between good and excellent. At June 30, 2020, 97 percent of EnerBank’s loan portfolio was originated within the past five years.

The allowance for loan losses at June 30, 2020 reflects expected credit losses over the entire lifetime of the loan portfolio. EnerBank estimates the allowance by using the “weighted-average remaining maturity” methodology for their term loans, and the “probability of default and loss given default” methodology for their same-as-cash loans. These methodologies consider historical loan loss experience, prepayment expectations, and credit quality indicators. EnerBank considers current and projected economic conditions, and other reasonable and supportable forecast information to determine if adjustments to the allowance are necessary. The allowance is increased by the provision for loan losses and decreased by loan charge‑offs net of recoveries. 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. Presented in the following table are the changes in the allowance for loan losses:

In Millions
June 30, 2020	Three Months Ended				Six Months Ended
Balance at beginning of period		$	99			$	33
Effects of new accounting standard¹		—				62
Provisions for loan losses		13				26
Charge-offs		(9		)		(20		)
Recoveries		1				3
Balance at end of period		$	104			$	104

¹  The allowance for loan losses at December 31, 2019 reflected expected credit losses over a 12-month period. On January 1, 2020, in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments, the allowance for loan losses was adjusted to reflect expected credit losses over the life of the loan. Additionally, EnerBank recorded $3 million for expected credit losses related to unfunded loan commitments. For further details, see Note 1, New Accounting Standards.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent loans was $23 million at June 30, 2020 and $33 million at December 31, 2019. At June 30, 2020 and December 31, 2019, EnerBank’s loans that had been modified as troubled debt restructurings were immaterial.

As a result of the COVID‑19 pandemic, EnerBank has instituted new payment accommodations for current customers. At June 30, 2020, EnerBank had not experienced increased delinquent loans, charge-offs, or increased loan modifications due to the COVID‑19 pandemic. EnerBank did not make any material adjustments to their allowance for loan losses at June 30, 2020 due to the COVID‑19 pandemic. EnerBank cannot predict the longer-term impacts of the pandemic, but could experience slower lending growth, higher loan write-offs, and increased loan modifications.

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EnerBank issues loan commitments to meet customer-financing needs. These commitments are agreements to provide credit as long as certain conditions are met and expire after 120 days. EnerBank uses the same credit policies in making these commitments as it uses for loans. EnerBank had $513 million of off-balance-sheet unfunded loan commitments at June 30, 2020, and had recorded a liability of $9 million for expected credit losses on those commitments.

EnerBank has entered into interest rate swaps on $134 million of its loans (notes receivable). For information about interest rate swaps see Note 5, Fair Value Measurements.

DB SERP Note Receivable – Related Party

The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

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8:    Retirement Benefits

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

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 Plans																OPEB Plan
	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	13			$	10			$	25			$	20			$	4			$	3			$	8			$	7
Interest cost		20				24				41				49				9				10				17				20
Expected return on plan assets		(48		)		(41		)		(96		)		(81		)		(25		)		(22		)		(50		)		(44		)
Amortization of:
Net loss		22				12				44				24				3				6				7				13
Prior service cost (credit)		1				1				1				1				(14		)		(15		)		(28		)		(31		)
Net periodic cost (credit)		$	8			$	6			$	15			$	13			$	(23	)		$	(18	)		$	(46	)		$	(35	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	24			$	20			$	4			$	4			$	8			$	7
Interest cost		19				23				39				46				8				10				16				20
Expected return on plan assets		(46		)		(38		)		(91		)		(76		)		(24		)		(20		)		(47		)		(41		)
Amortization of:
Net loss		21				11				42				23				3				6				7				13
Prior service cost (credit)		1				1				1				1				(13		)		(16		)		(27		)		(31		)
Net periodic cost (credit)		$	7			$	7			$	15			$	14			$	(22	)		$	(16	)		$	(43	)		$	(32	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

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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:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴  In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

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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						Six Months Ended
June 30	2020			2019			2020			2019
Income available to common stockholders
Net income		$	137		$	94		$	380		$	307
Less income attributable to noncontrolling interests		1			1			1			1
Net income available to common stockholders – basic and diluted		$	136		$	93		$	379		$	306
Average common shares outstanding
Weighted-average shares – basic		285.5			282.9			284.4			282.9
Add dilutive nonvested stock awards		0.6			0.6			0.7			0.6
Add dilutive forward equity sale contracts		0.4			0.5			0.7			0.3
Weighted-average shares – diluted		286.5			284.0			285.8			283.8
Net income per average common share available to common stockholders
Basic		$	0.48		$	0.33		$	1.33		$	1.08
Diluted		0.48			0.33			1.33			1.08

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 in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non‑participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS. For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

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11:    Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Three Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,020		$	306		$	—		$	—		$	1,326
Other		—			—			17			—			17
Revenue recognized from contracts with customers		$	1,020		$	306		$	17		$	—		$	1,343
Leasing income		—			—			35			—			35
Financing income		2			2			—			61			65
Total operating revenue – CMS Energy		$	1,022		$	308		$	52		$	61		$	1,443
Consumers
Consumers utility revenue
Residential		$	507		$	206								$	713
Commercial		341			51									392
Industrial		126			7									133
Other		46			42									88
Revenue recognized from contracts with customers		$	1,020		$	306								$	1,326
Financing income		2			2									4
Total operating revenue – Consumers		$	1,022		$	308								$	1,330

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $21 million for the three months ended June 30, 2020.

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In Millions
Three Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,026		$	305		$	—		$	—		$	1,331
Other		—			—			16			—			16
Revenue recognized from contracts with customers		$	1,026		$	305		$	16		$	—		$	1,347
Leasing income		—			—			42			—			42
Financing income		1			2			—			53			56
Total operating revenue – CMS Energy		$	1,027		$	307		$	58		$	53		$	1,445
Consumers
Consumers utility revenue
Residential		$	423		$	198								$	621
Commercial		362			58									420
Industrial		174			8									182
Other		67			41									108
Revenue recognized from contracts with customers		$	1,026		$	305								$	1,331
Financing income		1			2									3
Total operating revenue – Consumers		$	1,027		$	307								$	1,334

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $29 million for the three months ended June 30, 2019.

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In Millions
Six Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,045		$	1,020		$	—		$	—		$	3,065
Other		—			—			36			—			36
Revenue recognized from contracts with customers		$	2,045		$	1,020		$	36		$	—		$	3,101
Leasing income		—			—			74			—			74
Financing income		5			4			—			123			132
Total operating revenue – CMS Energy		$	2,050		$	1,024		$	110		$	123		$	3,307
Consumers
Consumers utility revenue
Residential		$	988		$	699								$	1,687
Commercial		680			200									880
Industrial		266			27									293
Other		111			94									205
Revenue recognized from contracts with customers		$	2,045		$	1,020								$	3,065
Financing income		5			4									9
Total operating revenue – Consumers		$	2,050		$	1,024								$	3,074

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $46 million for the six months ended June 30, 2020.

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In Millions
Six Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,126		$	1,143		$	—		$	—		$	3,269
Other		—			—			35			—			35
Revenue recognized from contracts with customers		$	2,126		$	1,143		$	35		$	—		$	3,304
Leasing income		—			—			90			—			90
Financing income		4			4			—			102			110
Total operating revenue – CMS Energy		$	2,130		$	1,147		$	125		$	102		$	3,504
Consumers
Consumers utility revenue
Residential		$	946		$	787								$	1,733
Commercial		713			232									945
Industrial		336			33									369
Other		131			91									222
Revenue recognized from contracts with customers		$	2,126		$	1,143								$	3,269
Financing income		4			4									8
Total operating revenue – Consumers		$	2,130		$	1,147								$	3,277

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $63 million for the six months ended June 30, 2019.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff‑based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff‑based sales performance obligations are described below.

• Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of Consumers’ service to stand ready to deliver.

• Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of a bundled

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product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed‑term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost, less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past‑due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $8 million for the three months ended June 30, 2020 and $6 million for the three months ended June 30, 2019. CMS Energy and Consumers recorded uncollectible accounts expense of $13 million for the six months ended June 30, 2020 and $12 million for the six months ended June 30, 2019. At June 30, 2020, Consumers deferred $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. For additional information see Note 2, Regulatory Matters.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month‑end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets, were $326 million at June 30, 2020 and $426 million at December 31, 2019.

Alternative‑Revenue Programs: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather-normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

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12:    Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Cash and cash equivalents, including restricted amounts		$	1,604		$	157
Consumers
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Cash and cash equivalents, including restricted amounts		$	1,229		$	28

Cash and Cash Equivalents: Cash and cash equivalents include short‑term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

13:    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 segments reported for CMS Energy are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

• enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

• EnerBank, a Utah state-chartered, FDIC-insured industrial bank providing primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements

CMS Energy presents corporate interest and other expenses and Consumers’ other consolidated entities within other reconciling items.

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Consumers

The segments reported for Consumers are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

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

Presented in the following tables is financial information by segment:

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Enterprises		52				58				110				125
EnerBank		61				53				123				102
Total operating revenue – CMS Energy		$	1,443			$	1,445			$	3,307			$	3,504
Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Total operating revenue – Consumers		$	1,330			$	1,334			$	3,074			$	3,277
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Enterprises¹		1				16				21				23
EnerBank¹		8				10				22				21
Other reconciling items¹		(33		)		(31		)		(59		)		(62		)
Total net income available to common stockholders – CMS Energy		$	136			$	93			$	379			$	306
Consumers
Net income (loss) available to common stockholder
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Other reconciling items		(1		)		(1		)		(1		)		(1		)
Total net income available to common stockholder – Consumers		$	159			$	97			$	394			$	323

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

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In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Enterprises		408			405
EnerBank		35			22
Other reconciling items		20			20
Total plant, property, and equipment, gross – CMS Energy		$	25,911		$	25,390
Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Other reconciling items		20			20
Total plant, property, and equipment, gross – Consumers		$	25,468		$	24,963
CMS Energy, including Consumers
Total assets
Electric utility¹		$	15,925		$	14,911
Gas utility¹		9,006			8,659
Enterprises		542			527
EnerBank		2,799			2,692
Other reconciling items		309			48
Total assets – CMS Energy		$	28,581		$	26,837
Consumers
Total assets
Electric utility¹		$	15,987		$	14,973
Gas utility¹		9,052			8,706
Other reconciling items		21			20
Total assets – Consumers		$	25,060		$	23,699

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

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14:    Exit Activities

Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn 1 & 2 coal-fueled generating units in 2023. In October 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. Consumers is seeking recovery of these costs from customers in its 2020 electric rate case.

As of June 30, 2020, the cumulative cost incurred and charged to expense related to this program was $11 million; an amount of $1 million has been capitalized as a cost of plant, property, and equipment. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
June 30, 2020	Six Months Ended
Retention benefit liability at beginning of period		$	4
Costs incurred and charged to maintenance and other operating expenses¹		7
Costs incurred and capitalized		1
Retention benefit liability at the end of the period²		$	12

¹  Includes $3 million for the three months ended June 30, 2020.

²  Includes current portion of other liabilities of $5 million.

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 2019 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.

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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 affect materially, 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 affect materially, its internal control over financial reporting.

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 2019 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

The following Risk Factor is in addition to our Risk Factors included in Part I—Item 1A. Risk Factors in the 2019 Form 10‑K. Actual results in future periods for CMS Energy and Consumers could differ materially from historical results and the forward-looking statements contained in this report. Factors that might cause or contribute to these differences include those discussed in the following sections and in Part I—Item 1A. Risk Factors in the 2019 Form 10‑K. CMS Energy’s and Consumers’ businesses are influenced by many factors that are difficult to predict, that involve uncertainties that may materially affect results, and that are often beyond their control. Additional risks and uncertainties not presently known or that management believes to be immaterial may also adversely affect CMS Energy or Consumers. The Risk Factor, as well as the other information included in this report and in other documents filed with the SEC, should be considered carefully before making an investment in securities of CMS Energy or Consumers. Risk factors of Consumers are also risk factors of CMS Energy.

The COVID‑19 pandemic could materially and adversely affect each of CMS Energy’s and Consumers’ business, results of operations, financial condition, capital investment program, liquidity, and cash flows.

The COVID‑19 pandemic has had widespread impacts on people, businesses, economies, and financial markets globally, in the U.S., and in markets where CMS Energy and Consumers conduct business. Future impacts of the pandemic could include a prolonged reduction in economic activity, extended disruption to supply chains and operations, and reduced availability of labor and productivity. CMS Energy and Consumers provide essential services, which means that CMS Energy and Consumers

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must keep employees, who operate facilities or interact with customers, safe and minimize unnecessary risk of exposure to COVID‑19. CMS Energy and Consumers have taken extra precautions in an effort to protect the health of employees working in the field and in CMS Energy’s and Consumers’ facilities. CMS Energy and Consumers have also implemented work-from-home policies where possible. Consumers suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers. This is a continually evolving situation; CMS Energy and Consumers will continue to monitor developments and will take additional necessary precautions in order to keep employees, customers, contractors, and communities safe.

The ultimate impact of the COVID‑19 pandemic depends on factors beyond CMS Energy’s and Consumers’ knowledge or control. In the near term, Consumers has experienced a decline in electric deliveries to commercial and industrial customers and increased uncollectible accounts. Over the long term, the pandemic could have numerous and significant adverse effects on CMS Energy and Consumers, including but not limited to adverse effects on their business, operations, sales, uncollectible accounts, capital expenditures, energy efficiency programs, pension expenses, and PSCR and GCR costs. The companies’ business and operations could also be adversely affected by an inability to obtain necessary approvals or authorizations from the MPSC, FERC, courts, or other governmental authorities in a timely manner and by the nature of any emergency or other actions taken by such agencies, courts, or authorities. Additionally, EnerBank could experience slower lending growth, higher loan write-offs, and increased loan modifications.

CMS Energy and Consumers cannot predict how or to what extent the COVID‑19 pandemic will negatively impact CMS Energy’s and Consumers’ business, results of operations, financial condition, capital investment program, liquidity, and cash flows. To the extent the COVID‑19 pandemic adversely affects CMS Energy’s and Consumers’ business, results of operations, financial condition, capital investment program, liquidity, and cash flows, it may also have the effect of heightening many of the other risks described in Part I—Item 1A. Risk Factors in the 2019 Form 10‑K. The degree to which COVID‑19 will impact CMS Energy and Consumers will depend in part on future developments, including the severity and duration of the outbreak, actions or inactions that may be taken by governmental authorities, and to what extent and when normal economic and operational conditions can resume.

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

Unregistered Sales of Equity Securities

None.

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Issuer Repurchases of Equity Securities

Presented in the following table are CMS Energy’s repurchases of equity securities for the three months ended June 30, 2020:

Period	Total Number of Shares Purchased¹		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares That May Yet Be Purchased Under Publicly Announced Plans or Programs
April 1, 2020 to April 30, 2020		514		$	55.71		—		—
May 1, 2020 to May 31, 2020		12,559		55.95			—		—
June 1, 2020 to June 30, 2020		272		59.01			—		—
Total		13,345		$	56.00		—		—

¹  All 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.

Item 3.    Defaults Upon Senior Securities

None.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

None.

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Item 6.    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
4.1	—	140th Supplemental Indenture dated as of May 13, 2020 between Consumers Energy and The Bank of New York Mellon, as Trustee (Exhibit 4.1 to Form 8‑K filed May 13, 2020 and incorporated herein by reference)
4.2	—	141st Supplemental Indenture dated as of May 20, 2020 between Consumers Energy and The Bank of New York Mellon, as Trustee (Exhibit 4.1 to Form 8‑K filed May 20, 2020 and incorporated herein by reference)
4.31	—	9th Supplemental Indenture dated as of May 28, 2020 between CMS Energy and The Bank of New York Mellon, as Trustee (Exhibit 4.1 to Form 8‑K filed May 28, 2020 and incorporated herein by reference)
10.12	—	CMS Energy 2020 Performance Incentive Stock Plan, effective June 1, 2020 (Exhibit 10.1 to Form 8‑K filed May 5, 2020 and incorporated herein by reference)
10.21	—	Amendment No. 1, dated as of April 29, 2020, to $550 million Fourth Amended and Restated Revolving Credit Agreement dated as of June 5, 2018 among CMS Energy, the Banks, as defined therein, and Barclays, as Agent
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

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Exhibits		Description
101.INS	—	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	—	Inline XBRL Taxonomy Extension Schema
101.CAL	—	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	—	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB	—	Inline XBRL Taxonomy Extension Labels Linkbase
101.PRE	—	Inline XBRL Taxonomy Extension Presentation Linkbase
104.1	—	Included in the cover page, formatted in Inline XBRL

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

²  Management contract or compensatory plan or arrangement.

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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: August 3, 2020	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		Executive Vice President and Chief Financial Officer
		CONSUMERS ENERGY COMPANY
Dated: August 3, 2020	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		Executive Vice President and Chief Financial Officer

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EX-10.2

Exhibit 10.2

AMENDMENT NO. 1

Dated as of April 29, 2020

to

FOURTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

Dated as of June 5, 2018

THIS AMENDMENT NO. 1 (this “Amendment”) is made as of April 29, 2020 by and among CMS Energy Corporation, a Michigan corporation (the “Company”), the financial institutions listed on the signature pages hereof and Barclays Bank PLC as administrative agent (the “Agent”), under that certain Fourth Amended and Restated Revolving Credit Agreement dated as of June 5, 2018 by and among the Company, the financial institutions from time to time party thereto (the “Banks”) and the Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.

WHEREAS, the Company has requested that the Banks and the Agent agree to certain amendments to the Credit Agreement;

WHEREAS, the Company, the Banks and the Agent have so agreed on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company, the Banks party hereto and the Agent hereby agree to enter into this Amendment.

1.Amendments to the Credit Agreement. Effective as of April 29, 2020 (the “Amendment No. 1 Effective Date”) but subject to the satisfaction of the conditions precedent set forth in Section 2below, the parties hereto agree that the Credit Agreement is hereby amended as follows:

(a)Section 1.1of the Credit Agreement is hereby amended to (i) delete the definition of “Total Consolidated EBITDA” therefrom and (ii) add or amend and restate, as applicable, the following definitions in their appropriate alphabetical order therein:

“ “Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.”

“ “Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.”

“ “Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound

ACTIVE 256339955v.5

or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).”

“ “Material Subsidiary” means any Subsidiary of the Company that, on a consolidated basis with any of its Subsidiaries as of any date of determination, accounts for more than 10% of the consolidated assets of the Company and its Consolidated Subsidiaries; provided, that Enerbank USA shall not be deemed to be a Material Subsidiary at any time.”

“ “Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.”

“ “Total Consolidated Capitalization” means, at any date of determination, without duplication, the sum of (a) Total Consolidated Debt plus all amounts excluded from Total Consolidated Debt pursuant to clauses (ii), (iii) and (vii) of the proviso to the definition of such term (but only, in the case of securities of the type described in clause (iii) of such proviso, to the extent such securities have been deemed to be equity pursuant to Accounting Standards Codification Subtopic 480-10 (previously referred to as Statement of Financial Accounting Standards No. 150)), (b) equity of the common stockholders of the Company, (c) equity of the preference stockholders of the Company and (d) equity of the preferred stockholders of the Company, in each case determined at such date.”

“ “UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.”

“ “UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.”

“ “Write-Down and Conversion Powers” means, (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.”

(b)Article VIIIof the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“ARTICLE VIII

FINANCIAL COVENANT

So long as any of the Obligations shall remain unpaid, any Facility LC shall remain outstanding or any Bank shall have any Commitment under this Agreement, the Company shall at all times maintain a ratio of Total Consolidated Debt to Total Consolidated Capitalization of not greater than 0.70 to 1.0.”

2

(c)Section 12.19of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“12.19 Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Affected Financial Institution arising under any Credit Document may be subject to the Write-Down and Conversion Powers of the applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Credit Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.”

(d)Exhibit Bto the Credit Agreement is hereby amended and restated in its entirety in the form attached hereto as Annex I.

2.Conditions of Effectiveness. The effectiveness of this Amendment on the Amendment No. 1 Effective Date is subject to the conditions precedent that (i) the Agent shall have received counterparts of this Amendment duly executed by the Company, the Majority Banks and the Agent and (ii) the Agent shall have received payment and/or reimbursement of the Agent’s and its affiliates’ fees and expenses (including, to the extent invoiced, fees and expenses of counsel for the Agent) in connection with this Amendment.

3.Representations and Warranties of the Company. The Company hereby represents and warrants as follows:

(a)This Amendment and the Credit Agreement as modified hereby constitute legal, valid and binding obligations of the Company and are enforceable against the Company in accordance with their terms, subject to (i) the effect of applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) the application of general principles of equity (regardless of whether considered in a proceeding in equity or at law).

(b)As of the date hereof and after giving effect to the terms of this Amendment, (i) no Default or Event of Default has occurred and is continuing and (ii) the representations and warranties contained in Article Vof the Credit Agreement, as amended hereby (and, solely with respect to the representation

3

contained in Section 5.6 of the Credit Agreement, after giving effect to any reports filed with the SEC prior to the date hereof), are true and correct.

4. Reference to and Effect on the Credit Agreement.

(a)This Amendment shall constitute a Credit Document.

(b)Upon the effectiveness hereof, each reference to the Credit Agreement in the Credit Agreement or any other Credit Document shall mean and be a reference to the Credit Agreement as amended hereby.

(c)Each Credit Document and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.

(d)Except with respect to the subject matter hereof, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agent or the Banks, nor constitute a waiver of any provision of the Credit Agreement, the Credit Documents or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5.Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

6.Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

7.Counterparts. This Amendment may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, e-mailed .pdf or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

[Signature Pages Follow]

4

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.

	CMS ENERGY CORPORATION,
	as the Company
By:	/s/ Srikanth Maddipati
Name:	Srikanth Maddipati
Title:	Vice President and Treasurer

	BARCLAYS BANK PLC,
	individually as a Bank and as Agent
By:	/s/ Sam Yoo
Name:	SAM YOO
Title:	MANAGING DIRECTOR

	JPMORGAN CHASE BANK, N.A.,
	as a Bank
By:	/s/ Nancy R. Barwig
Name:	Nancy R. Barwig
Title:	Executive Director

	MUFG UNION BANK, N.A.,
	as a Bank
By:	/s/ Viet-Linh Fujitaki
Name:	Viet-Linh Fujitaki
Title:	Vice President

	BANK OF AMERICA, N.A.,
	as a Bank
By:	/s/ Sara Just
Name:	Sara Just
Title:	Vice President

Signature Page to Amendment No. 1 to

Fourth Amended and Restated Revolving Credit Agreement CMS Energy Corporation

	MIZUHO BANK, LTD.,
	as a Bank
By:	/s/ Edward Sacks
Name:	Edward Sacks
Title:	Authorized Signatory

	BNP PARIBAS,
	as a Bank
By:	/s/ Denis O’Meara
Name:	Denis O’Meara
Title:	Managing Director
By:	/s/ Theodore Sheen
Name:	Theodore Sheen
Title:	Director

	CITIBANK, N.A.,
	as a Bank
By:	/s/ Amit Vasani
Name:	Amit Vasani
Title:	Vice President

	DEUTSCHE BANK AG NEW YORK BRANCH,
	as a Bank
By:	/s/ Ming K Chu
Name:	Ming K Chu ming.k.chu@db.com
Title:	Director +1-212-250-5451
By:	/s/ Annie Chung
Name:	Annie Chung annie.chung@db.com
Title:	Director +1-212-250-6375

Signature Page to Amendment No. 1 to

Fourth Amended and Restated Revolving Credit Agreement CMS Energy Corporation

	FIFTH THIRD BANK, NATIONAL ASSOCIATION
	as a Bank
By:	/s/ Will Merritt
Name:	Will Merritt
Title:	Director II

	GOLMAN SACHS BANK USA,
	as a Bank
By:	/s/ Jamie Minieri
Name:	Jamie Minieri
Title:	Authorized Signatory

	KEYBANK NATIONAL ASSOCIATION,
	as a Bank
By:	/s/ Lisa A. Ryder
Name:	Lisa A. Ryder
Title:	Senior Vice President

	THE NORTHERN TRUST COMPANY,
	as a Bank
By:	/s/ Will Hicks
Name:	Will Hicks
Title:	Vice President

	PNC BANK, NATIONAL ASSOCIATION,
	as a Bank
By:	/s/ Kelly Sarver
Name:	Kelly Sarver
Title:	Vice President

Signature Page to Amendment No. 1 to

Fourth Amended and Restated Revolving Credit Agreement CMS Energy Corporation

	ROYAL BANK OF CANADA,
	as a Bank
By:	/s/ Martina Wellik
Name:	Martina Wellik
Title:	Authorized Signatory

	THE BANK OF NOVA SCOTIA,
	as a Bank
By:	/s/ David Dewar
Name:	David Dewar
Title:	Director

	SUMITOMO MITSUI BANKING CORPORATION,
	as a Bank
By:	/s/ Katie Lee
Name:	Katie Lee
Title:	Director

	TRUIST BANK, Successor by Merger to SUNTRUST BANK,
	as a Bank
By:	/s/ Bryan Kunitake
Name:	Bryan Kunitake
Title:	Director

	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as a Bank
By:	/s/ Jesse Tannuzzo
Name:	Jesse Tannuzzo
Title:	Vice President

Signature Page to Amendment No. 1 to

Fourth Amended and Restated Revolving Credit Agreement CMS Energy Corporation

	MORGAN STANLY BANK, N.A.,
	as a Bank
By:	/s/ Jake Dowden
Name:	Jake Dowden
Title:	Authorized Signatory

	U.S. BANK NATIONAL ASSOCIATION
	as a Bank
By:	/s/ Jenna R. Papaz
Name:	Jenna Papaz
Title:	Vice President

	COMERICA BANK,
	as a Bank
By:	/s/ Brandon Kotcher
Name:	Brandon Kotcher
Title:	Assistant Vice President

Signature Page to Amendment No. 1 to

Fourth Amended and Restated Revolving Credit Agreement CMS Energy Corporation

ANNEX I

EXHIBIT B

FORM OF COMPLIANCE CERTIFICATE

I, _______________, __________________ of CMS Energy Corporation, a Michigan corporation (the “Company”), DO HEREBY CERTIFY in connection with the Fourth Amended and Restated Revolving Credit Agreement, dated as of June 5, 2018 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; the terms defined therein being used herein as so defined), among the Company, various financial institutions and Barclays Bank PLC, as Agent and an LC Issuer, that:

Article VIIIof the Credit Agreement provides that the Company shall: “At all times maintain a ratio of Total Consolidated Debt to Total Consolidated Capitalization of not greater than 0.70 to 1.0.”

The following calculations are made in accordance with the definitions of Total Consolidated Debt and Total Consolidated Capitalization in the Credit Agreement and are correct and accurate as of __________, _____:

A.	Total Consolidated Debt
	(a)	Indebtedness for borrowed money	$
plus	(b)	Indebtedness for deferred purchase price of property/services	(+) $
plus	(c)	Liabilities for accumulated funding deficiencies (prior to the effectiveness of the applicable provisions of the Pension Protection Act of 2006 with respect to a Plan) and liabilities for failure to make a payment required to satisfy the minimum funding standard within the meaning of Section 412 of the Code or Section 302 of ERISA (on and after the effectiveness of the applicable provisions of the Pension Protection Act of 2006 with respect to a Plan).	(+) $
plus	(d)	Liabilities in connection with withdrawal liability under ERISA to any Multiemployer Plan	(+) $
plus	(e)	Obligations under acceptance facilities	(+) $
plus	(f)	Obligations under Capital Leases	(+) $
plus	(g)	Obligations under interest rate swap, “cap”, “collar” or other hedging agreement	(+) $
plus	(h)	Off-Balance Sheet Liabilities	(+) $
plus	(i)	the Consumers Preferred Equity	(+) $
plus	(j)	non-contingent obligations in respect of letters of credit and bankers’ acceptances	(+) $

plus	(k)	Guaranties, endorsements and other contingent obligations	(+) $
plus	(l)	elimination of reduction in Debt due to any election under Section 25 of Accounting Standards Codification Subtopic 825-10 to “fair value” any Debt or other liabilities of the Company or any Subsidiary	(+) $
plus	(m)	elimination of reduction in Debt due to application of Accounting Standards Codification Subtopic 470-20	(+) $
minus	(n)	Principal amount of any Securitized Bonds	(-) $
minus	(o)	Junior Subordinated Debt of the Company, Hybrid Equity Securities and Hybrid Preferred Securities of the Company or owned by any Hybrid Equity Securities Subsidiary or Hybrid Preferred Securities Subsidiary	(-) $
minus	(p)	Agreed upon percentage of Net Proceeds from issuance of hybrid debt/equity securities (other than Junior Subordinated Debt, Hybrid Equity Securities and Hybrid Preferred Securities)	(-) $
minus	(q)	Liabilities on the Company’s balance sheet resulting from the disposition of the Palisades Nuclear Plant	(-) $
minus	(r)	Mandatorily Convertible Securities	(-) $
minus	(s)	Project Finance Debt of the Company or any Consolidated Subsidiary	(-) $
minus	(t)	Project Finance Debt of the Company or any Consolidated Subsidiary	(-) $
minus	(u)	Debt of the Company and its Affiliates that is re-categorized as such from certain lease obligations pursuant to Section 15 of Accounting Standards Codification Subtopic 840-10	(-) $
minus	(v)	Debt of EnerBank USA	(-) $
		Total $
B.	Total Consolidated Capitalizations
	(a)	Total Consolidated Debt	$
plus	(b)	The sum of Items A(o), A(p) and A(t) above1	(+)

¹In the case of securities of the type described in A(p), only to the extent such securities have been deemed to be equity pursuant to Financial Accounting Standards Board Statement No. 150.

plus	(c)	Equity of common stockholders		(+)
plus	(d)	Equity of preference stockholders		(+)
plus	(e)	Equity of preferred stockholders		(+)
	Total $
C.	Debt to Capital Ratio (total of A divided bytotal of B)				to 1.00
D.	Applicable Sustainability Adjustment2:			3,478	Gwh
	1.	Baseline Sustainability Amount			Gwh
	2.	Sustainability Amount (comprised of Renewable Energy):			Gwh
		(a)	wind generation		Gwh
		(b)	solar generation		Gwh
		(c)	hydroelectric generation (excluding pumped storage)		Gwh
		(d)	biomass generation		Gwh
		(e)	other Renewable Energy generation (to the extent approved by the Majority Banks)		Gwh
		(f)	purchased wind generation		Gwh
		(g)	purchased other Renewable Energy generation (as reported on Form 10-K)		Gwh
minus		(h)	Flint, MI (50%) for duplication		Gwh
minus		(i)	Grayling, MI (50%) for duplication		Gwh
		(j)	Sustainability Amount: sum of 2(a) through 2(i) =		Gwh

²For the avoidance of doubt, all reported figures shall be consistent with those reported on the Company’s most recently filed annual report on Form 10-K (or any successor form) (or, subject to the satisfaction of the requirements set forth in Section 6.7(c), any amendment thereto).

		(k)	Sustainability Amount divided byBaseline Sustainability Amount		%
	3.	Other Non-Renewable Energy Generation
		(a)	coal steam generation		Gwh
		(b)	oil/gas steam generation		Gwh
		(c)	hydroelectric generation (to the extent not constituting Renewable Energy)		Gwh
		(d)	gas combined cycle		Gwh
		(e)	gas/oil combustion turbine		Gwh
		(f)	coal generation		Gwh
		(g)	gas generation		Gwh
		(h)	other gas generation		Gwh
		(i)	nuclear generation		Gwh
minus		(j)	Filer City, MI (50%) for duplication		Gwh
		(k)	sum of 3(a) through 3(j) = Non-Renewable Owned/Purchased Generation		Gwh
		(l)	Sustainability Amount (2(j)) plus Non-Renewable Energy (3(k)) = Total Owned/Purchased Generation		Gwh
	4.	Baseline Sustainability Percentage		8.66	%
	5.	Sustainability Percentage (total of Sustainability Amount (2(j)) divided by Total Owned/Purchased Generation (3(l))			%
Sustainability Percentage Greater than, Equal to, or Less than Baseline Sustainability Percentage

		6. Applicable Sustainability Adjustment
Calculation			Applicable Margin adjustment	Applicable Sustainability Adjustment3
Sustainability Percentage ≥ Baseline Sustainability Percentage AND:
	Sustainability Amount ≥ 105% of Baseline Sustainability Amount		reduced by 0.025%	o
	Sustainability Amount ≥ 110% of Baseline Sustainability Amount		reduced by 0.05%	o
Sustainability Percentage < Baseline Sustainability Percentage AND
	Sustainability Amount ≤ 95% of Baseline Sustainability Amount		increased by 0.025%	o
	Sustainability Amount ≤ 90% of Baseline Sustainability Amount		increased by 0.05%	o
No Applicable Adjustment				o

IN WITNESS WHEREOF, I have signed this Certificate this _____ day of____,______.

Name:

Title:

³ Check applicable adjustment. For the avoidance of doubt, only one selection shall be made.

EX-31.1

Exhibit 31.1

Certification of Patricia K. Poppe

I, Patricia K. Poppe, 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: August 3, 2020	By:	/s/ Patricia K. Poppe
		Patricia K. Poppe
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Rejji P. Hayes

I, Rejji P. Hayes, 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: August 3, 2020	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		Executive Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

Certification of Patricia K. Poppe

I, Patricia K. Poppe, 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: August 3, 2020	By:	/s/ Patricia K. Poppe
		Patricia K. Poppe
		President and Chief Executive Officer

EX-31.4

Exhibit 31.4

Certification of Rejji P. Hayes

I, Rejji P. Hayes, 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: August 3, 2020	By:	/s/ Rejji P. Hayes
		Rejji P. Hayes
		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 June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Patricia K. Poppe, as President and Chief Executive Officer of the Company, and Rejji P. Hayes, 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 or her 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/ Patricia K. Poppe
Name:	Patricia K. Poppe
Title:	President and Chief Executive Officer
Date:	August 3, 2020
/s/ Rejji P. Hayes
Name:	Rejji P. Hayes
Title:	Executive Vice President and Chief Financial Officer
Date:	August 3, 2020

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 June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Patricia K. Poppe, as President and Chief Executive Officer of the Company, and Rejji P. Hayes, 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 or her 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/ Patricia K. Poppe
Name:	Patricia K. Poppe
Title:	President and Chief Executive Officer
Date:	August 3, 2020
/s/ Rejji P. Hayes
Name:	Rejji P. Hayes
Title:	Executive Vice President and Chief Financial Officer
Date:	August 3, 2020

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Jul. 07, 2020
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Commission File Number	1-9513
Entity Registrant Name	CMS ENERGY CORPORATION
IRS Employer Identification No.	38-2726431
Entity Incorporation State	MI
Entity Address	One Energy Plaza
City	Jackson
State	MI
Postal Zip Code	49201
City Area Code	517
Local Phone Number	788‑0550
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Smaller reporting company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		286,280,694
Entity Central Index Key	0000811156
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Consumers Energy Company
Document Information [Line Items]
Commission File Number	1-5611
Entity Registrant Name	CONSUMERS ENERGY COMPANY
IRS Employer Identification No.	38-0442310
Entity Incorporation State	MI
Entity Address	One Energy Plaza
City	Jackson
State	MI
Postal Zip Code	49201
City Area Code	517
Local Phone Number	788‑0550
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Smaller reporting company	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		84,108,789
Entity Central Index Key	0000201533
Common Stock
Document Information [Line Items]
Title of each class	CMS Energy Corporation Common Stock, $0.01 par value
Trading Symbol	CMS
Security Exchange Name	NYSE
CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078
Document Information [Line Items]
Title of each class	CMS Energy Corporation 5.625% Junior Subordinated Notes due 2078
Trading Symbol	CMSA
Security Exchange Name	NYSE
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078
Document Information [Line Items]
Title of each class	CMS Energy Corporation 5.875% Junior Subordinated Notes due 2078
Trading Symbol	CMSC
Security Exchange Name	NYSE
CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079
Document Information [Line Items]
Title of each class	CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079
Trading Symbol	CMSD
Security Exchange Name	NYSE
Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series
Document Information [Line Items]
Title of each class	Consumers Energy Company Cumulative Preferred Stock, $100 par value: $4.50 Series
Trading Symbol	CMS-PB
Security Exchange Name	NYSE

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Operating Revenue	$ 1,443	$ 1,445	$ 3,307	$ 3,504
Operating Expenses
Fuel for electric generation	63	119	166	261
Purchased power – related parties	14	16	32	34
Maintenance and other operating expenses	351	343	666	697
Depreciation and amortization	223	216	539	514
General taxes	75	71	189	177
Total operating expenses	1,170	1,227	2,666	2,927
Operating Income	273	218	641	577
Other Income (Expense)
Interest income	1	2	2	3
Interest and dividend income – related parties	0	0	7	0
Allowance for equity funds used during construction	2	3	3	5
Income (loss) from equity method investees	(2)	2	1	1
Nonoperating retirement benefits, net	30	23	61	46
Other income	2	2	2	3
Other expense	(1)	(5)	(5)	(8)
Total other income	32	27	71	50
Interest Charges
Interest on long-term debt	121	110	237	216
Interest expense – related parties	3	3	6	3
Other interest expense	17	19	36	35
Allowance for borrowed funds used during construction	0	(1)	(1)	(2)
Total interest charges	141	131	278	252
Income Before Income Taxes	164	114	434	375
Income Tax Expense	27	20	54	68
Net Income	137	94	380	307
Income Attributable to Noncontrolling Interests	1	1	1	1
Net Income Available to Common Stockholders	$ 136	$ 93	$ 379	$ 306
Basic earnings per average common share (in dollars per share)	$ 0.48	$ 0.33	$ 1.33	$ 1.08
Diluted earnings per average common share (in dollars per share)	$ 0.48	$ 0.33	$ 1.33	$ 1.08
Consumers Energy Company
Operating Revenue	$ 1,330	$ 1,334	$ 3,074	$ 3,277
Operating Expenses
Fuel for electric generation	43	88	122	194
Purchased and interchange power	354	350	701	724
Purchased power – related parties	14	16	32	34
Cost of gas sold	80	104	350	505
Maintenance and other operating expenses	302	320	580	639
Depreciation and amortization	218	212	530	506
General taxes	73	69	184	172
Total operating expenses	1,084	1,159	2,499	2,774
Operating Income	246	175	575	503
Other Income (Expense)
Interest income	1	1	2	2
Interest and dividend income – related parties	1	1	2	2
Allowance for equity funds used during construction	2	3	3	5
Nonoperating retirement benefits, net	28	22	57	43
Other income	2	1	2	2
Other expense	(2)	(5)	(5)	(8)
Total other income	32	23	61	46
Interest Charges
Interest on long-term debt	77	68	151	137
Interest expense – related parties	3	3	6	3
Other interest expense	2	4	5	7
Allowance for borrowed funds used during construction	0	(1)	(1)	(2)
Total interest charges	82	74	161	145
Income Before Income Taxes	196	124	475	404
Income Tax Expense	36	26	80	80
Net Income	160	98	395	324
Preferred Stock Dividends	1	1	1	1
Net Income Available to Common Stockholder	159	97	394	323
Purchased and interchange power
Operating Expenses
Cost of sales	362	356	719	734
Cost of gas sold
Operating Expenses
Cost of sales	$ 82	$ 106	$ 355	$ 510

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net income	$ 137	$ 94	$ 380	$ 307
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax	1	1	2	2
Amortization of prior service credit	(1)	0	(1)	(1)
Derivatives
Unrealized loss on derivative instruments, net of tax of $-, $(1), $(1), and $(1)	0	(2)	(4)	(3)
Other Comprehensive Loss	0	(1)	(3)	(2)
Comprehensive Income	137	93	377	305
Comprehensive Income Attributable to Noncontrolling Interests	1	1	1	1
Comprehensive Income Attributable to CMS Energy	136	92	376	304
Consumers Energy Company
Net income	160	98	395	324
Retirement Benefits Liability
Amortization of net actuarial loss, net of tax	0	1	0	1
Derivatives
Other Comprehensive Loss	0	1	0	1
Comprehensive Income	$ 160	$ 99	$ 395	$ 325

XML

Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Amortization of net actuarial loss, TAX	$ 1	$ 0	$ 1	$ 0
Amortization of prior service credit, TAX	0	0	0	0
Unrealized loss on derivative instruments, TAX BENEFIT	0	(1)	(1)	(1)
Consumers Energy Company
Amortization of net actuarial loss, TAX	$ 0	$ 0	$ 1	$ 0

XML

Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash Flows from Operating Activities
Net income	$ 380	$ 307
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	539	514
Deferred income taxes and investment tax credits	95	60
Pension contributions	(531)	0
Other non-cash operating activities and reconciling adjustments	20	9
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable and accrued revenue	130	190
Inventories	99	98
Accounts payable and accrued rate refunds	23	(48)
Other current and non-current assets and liabilities	41	55
Net cash provided by operating activities	796	1,185
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(946)	(973)
Increase in EnerBank notes receivable	(148)	(170)
Purchase of notes receivable by EnerBank	(15)	(220)
Cost to retire property and other investing activities	(59)	(47)
Net cash used in investing activities	(1,168)	(1,410)
Cash Flows from Financing Activities
Proceeds from issuance of debt	2,353	1,455
Retirement of debt	(392)	(1,104)
Increase in EnerBank certificates of deposit	132	371
Decrease in notes payable	(90)	(97)
Issuance of common stock, net of issuance costs	104	6
Payment of dividends on common and preferred stock	(234)	(218)
Other financing costs	(54)	(29)
Net cash provided by financing activities	1,819	384
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts	1,447	159
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	157	175
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	1,604	334
Non-cash transactions
Capital expenditures not paid	167	150
Consumers Energy Company
Cash Flows from Operating Activities
Net income	395	324
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	530	506
Deferred income taxes and investment tax credits	67	41
Pension contributions	(518)	0
Other non-cash operating activities and reconciling adjustments	(4)	4
Cash provided by (used in) changes in assets and liabilities
Accounts and notes receivable and accrued revenue	158	187
Inventories	99	96
Accounts payable and accrued rate refunds	18	(41)
Other current and non-current assets and liabilities	36	(7)
Net cash provided by operating activities	781	1,110
Cash Flows from Investing Activities
Capital expenditures (excludes assets placed under finance lease)	(936)	(963)
Cost to retire property and other investing activities	(57)	(63)
Net cash used in investing activities	(993)	(1,026)
Cash Flows from Financing Activities
Proceeds from issuance of debt	1,528	297
Retirement of debt	(363)	(528)
Decrease in notes payable	(90)	(97)
Stockholder contribution	650	675
Payment of dividends on common and preferred stock	(277)	(273)
Other financing costs	(35)	(2)
Net cash provided by financing activities	1,413	72
Net Increase in Cash and Cash Equivalents, Including Restricted Amounts	1,201	156
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of Period	28	56
Cash and Cash Equivalents, Including Restricted Amounts, End of Period	1,229	212
Non-cash transactions
Capital expenditures not paid	$ 157	$ 138

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current Assets
Cash and cash equivalents	$ 1,587	$ 140
Restricted cash and cash equivalents	17	17
Accounts receivable and accrued revenue, less allowance of $33 in 2020 and $20 in 2019	737	886
Notes receivable, less allowance of $35 in 2020 and $33 in 2019	264	242
Accounts and notes receivable – related parties	20	17
Inventories at average cost
Gas in underground storage	285	399
Materials and supplies	150	140
Generating plant fuel stock	71	66
Deferred property taxes	223	305
Regulatory assets	16	33
Prepayments and other current assets	162	86
Total current assets	3,532	2,331
Plant, Property, and Equipment
Plant, property, and equipment, gross	25,911	25,390
Less accumulated depreciation and amortization	7,697	7,360
Plant, property, and equipment, net	18,214	18,030
Construction work in progress	1,222	896
Total plant, property, and equipment	19,436	18,926
Other Non-current Assets
Regulatory assets	2,485	2,489
Accounts and notes receivable, less allowance	2,353	2,281
Investments	68	71
Other	707	739
Total other non-current assets	5,613	5,580
Total Assets	28,581	26,837
Current Liabilities
Current portion of long-term debt, finance leases, and other financing	1,744	1,130
Notes payable	0	90
Accounts payable	629	622
Accounts payable – related parties	6	13
Accrued rate refunds	44	35
Accrued interest	109	104
Accrued taxes	326	437
Regulatory liabilities	84	87
Other current liabilities	181	186
Total current liabilities	3,123	2,704
Non-current Liabilities
Long-term debt	13,414	11,951
Non-current portion of finance leases and other financing	67	76
Regulatory liabilities	3,809	3,742
Postretirement benefits	140	674
Asset retirement obligations	483	477
Deferred investment tax credit	118	120
Deferred income taxes	1,763	1,655
Other non-current liabilities	413	383
Total non-current liabilities	20,207	19,078
Commitments and contingencies
Common stockholders’ equity
Common stock	3	3
Other paid-in capital	5,217	5,113
Accumulated other comprehensive loss	(76)	(73)
Retained earnings (accumulated deficit)	70	(25)
Total common stockholders’ equity	5,214	5,018
Noncontrolling interests	37	37
Total equity	5,251	5,055
Total Liabilities and Equity	28,581	26,837
Consumers Energy Company
Current Assets
Cash and cash equivalents	1,215	11
Restricted cash and cash equivalents	14	17
Accounts receivable and accrued revenue, less allowance of $33 in 2020 and $20 in 2019	653	827
Accounts and notes receivable – related parties	8	9
Inventories at average cost
Gas in underground storage	285	399
Materials and supplies	145	135
Generating plant fuel stock	68	63
Deferred property taxes	223	305
Regulatory assets	16	33
Prepayments and other current assets	143	73
Total current assets	2,770	1,872
Plant, Property, and Equipment
Plant, property, and equipment, gross	25,468	24,963
Less accumulated depreciation and amortization	7,600	7,272
Plant, property, and equipment, net	17,868	17,691
Construction work in progress	1,211	879
Total plant, property, and equipment	19,079	18,570
Other Non-current Assets
Regulatory assets	2,485	2,489
Accounts and notes receivable, less allowance	26	29
Accounts and notes receivable – related parties	101	102
Other	599	637
Total other non-current assets	3,211	3,257
Total Assets	25,060	23,699
Current Liabilities
Current portion of long-term debt, finance leases, and other financing	556	221
Notes payable	0	90
Accounts payable	595	593
Accounts payable – related parties	13	20
Accrued rate refunds	44	35
Accrued interest	70	67
Accrued taxes	341	481
Regulatory liabilities	84	87
Other current liabilities	117	118
Total current liabilities	1,820	1,712
Non-current Liabilities
Long-term debt	7,867	7,048
Non-current portion of finance leases and other financing	67	76
Regulatory liabilities	3,809	3,742
Postretirement benefits	102	622
Asset retirement obligations	480	474
Deferred investment tax credit	118	120
Deferred income taxes	1,958	1,864
Other non-current liabilities	334	304
Total non-current liabilities	14,735	14,250
Commitments and contingencies
Common stockholders’ equity
Common stock	841	841
Other paid-in capital	6,024	5,374
Accumulated other comprehensive loss	(28)	(28)
Retained earnings (accumulated deficit)	1,631	1,513
Total common stockholders’ equity	8,468	7,700
Cumulative preferred stock, $4.50 series	37	37
Total equity	8,505	7,737
Total Liabilities and Equity	$ 25,060	$ 23,699

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Accounts receivable and accrued revenue ALLOWANCE	$ 33	$ 20
Notes receivable – current ALLOWANCE	35	33
Accounts and notes receivable – non-current ALLOWANCE	$ 69	$ 0
Common stock, authorized (in shares)	350,000,000.0	350,000,000.0
Common stock, outstanding (in shares)	286,300,000	283,900,000
Consumers Energy Company
Accounts receivable and accrued revenue ALLOWANCE	$ 33	$ 20
Common stock, authorized (in shares)	125,000,000	125,000,000
Common stock, outstanding (in shares)	84,100,000	84,100,000
Preferred stock, par value (in dollars per share)	$ 4.50	$ 4.50

XML

Consolidated Statements of Changes In Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock	Other Paid-in Capital	Accumulated Other Comprehensive Loss	Retirement benefits liability	Derivative instruments	Retained Earnings (Accumulated Deficit)	Noncontrolling Interests	Consumers Energy Company	Consumers Energy Company Common Stock	Consumers Energy Company Other Paid-in Capital	Consumers Energy Company Accumulated Other Comprehensive Loss	Consumers Energy Company Retirement benefits liability	Consumers Energy Company Retained Earnings (Accumulated Deficit)	Consumers Energy Company Preferred Stock	Cumulative effect of change in accounting principle Retained Earnings (Accumulated Deficit)
Total Equity at Beginning of Period at Dec. 31, 2018	$ 4,792	$ 3	$ 5,088	$ (65)	$ (63)	$ (2)	$ (271)	$ 37	$ 6,920	$ 841	$ 4,699	$ (21)	$ (21)	$ 1,364	$ 37	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued			17
Common stock repurchased			(8)
Stockholder contribution											675
Amortization of net actuarial loss	2				2				1				1
Amortization of prior service credit	(1)				(1)
Unrealized loss on derivative instruments	(3)					(3)
Net income	307						306	1	324					324
Dividends declared on common stock							(217)							(272)
Dividends declared on preferred stock														(1)
Distributions and other changes in noncontrolling interests								(1)
Total Equity at End of Period at Jun. 30, 2019	$ 4,888	3	5,097	(67)	(62)	(5)	(182)	37	7,647	841	5,374	(20)	(20)	1,415	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 0.7650
Total Equity at Beginning of Period at Mar. 31, 2019	$ 4,895	3	5,087	(66)	(63)	(3)	(166)	37	7,324	841	5,049	(21)	(21)	1,418	37	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued			10
Common stock repurchased			0
Stockholder contribution											325
Amortization of net actuarial loss	1				1				1				1
Amortization of prior service credit	0				0
Unrealized loss on derivative instruments	(2)					(2)
Net income	94						93	1	98					98
Dividends declared on common stock							(109)							(100)
Dividends declared on preferred stock														(1)
Distributions and other changes in noncontrolling interests								(1)
Total Equity at End of Period at Jun. 30, 2019	$ 4,888	3	5,097	(67)	(62)	(5)	(182)	37	7,647	841	5,374	(20)	(20)	1,415	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 0.3825
Total Equity at Beginning of Period at Dec. 31, 2019	$ 5,055	3	5,113	(73)	(69)	(4)	(25)	37	7,737	841	5,374	(28)	(28)	1,513	37	(51)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued			117
Common stock repurchased			(13)
Stockholder contribution											650
Amortization of net actuarial loss	2				2				0				0
Amortization of prior service credit	(1)				(1)
Unrealized loss on derivative instruments	(4)					(4)
Net income	380						379	1	395					395
Dividends declared on common stock							(233)							(276)
Dividends declared on preferred stock														(1)
Distributions and other changes in noncontrolling interests								(1)
Total Equity at End of Period at Jun. 30, 2020	$ 5,251	3	5,217	(76)	(68)	(8)	70	37	8,505	841	6,024	(28)	(28)	1,631	37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 0.8150
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Total Equity at Beginning of Period at Mar. 31, 2020	$ 5,222	3	5,207	(76)	(68)	(8)	51	37	8,103	841	5,724	(28)	(28)	1,529	37	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock issued			11
Common stock repurchased			(1)
Stockholder contribution											300
Amortization of net actuarial loss	1				1				0				0
Amortization of prior service credit	(1)				(1)
Unrealized loss on derivative instruments	0					0
Net income	137						136	1	160					160
Dividends declared on common stock							(117)							(57)
Dividends declared on preferred stock														(1)
Distributions and other changes in noncontrolling interests								(1)
Total Equity at End of Period at Jun. 30, 2020	$ 5,251	$ 3	$ 5,217	$ (76)	$ (68)	$ (8)	$ 70	$ 37	$ 8,505	$ 841	$ 6,024	$ (28)	$ (28)	$ 1,631	$ 37
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends declared per common share (in dollars per share)	$ 0.4075

XML

New Accounting Standards

6 Months Ended

Jun. 30, 2020

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New Accounting Standards

New Accounting Standards

Implementation of New Accounting Standards

ASU 2016‑13, Measurement of Credit Losses on Financial Instruments: This standard, which was effective on January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments. The standard applies to financial assets that are not measured at fair value through net income as well as to certain off‑balance-sheet credit exposures. CMS Energy and Consumers were required to apply the standard using a modified retrospective approach, under which the initial impacts of the standard are recorded through a cumulative‑effect adjustment to beginning retained earnings on the effective date.

The standard required an increase to the allowance for loan losses at EnerBank. Prior to the standard, the allowance reflected expected credit losses over a 12‑month period, but the new guidance requires the allowance to reflect expected credit losses over the entire life of the loans. As a result, CMS Energy recorded a $65 million increase to its expected credit loss reserves on January 1, 2020, with the offsetting adjustment recorded to retained earnings, net of taxes of $14 million. The standard also requires an increase in the initial provision for loan losses recognized in net income for new loans originated in 2020 and beyond. The adoption of this standard resulted in a $9 million reduction to CMS Energy’s income before income taxes for the six months ended June 30, 2020. For further information on EnerBank’s loans and the related allowance for loan losses, see Note 7, Notes Receivable. At Consumers, the standard applies to the allowance for uncollectible accounts, but did not result in any significant changes to the allowance methodology and did not have a material impact on Consumers’ consolidated financial statements.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting: This standard, which was effective as of March 12, 2020 for CMS Energy and Consumers, provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain

contracts to replace LIBOR with a new reference rate. The guidance, if elected, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. The guidance will also facilitate the continuation of hedge accounting for derivatives that may have to be modified to incorporate a new rate. The guidance is effective through December 31, 2022. CMS Energy and Consumers presently have various contracts that reference LIBOR and they are assessing how this standard may be applied to specific contract modifications.

Consumers Energy Company

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New Accounting Standards

New Accounting Standards

Implementation of New Accounting Standards

ASU 2016‑13, Measurement of Credit Losses on Financial Instruments: This standard, which was effective on January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments. The standard applies to financial assets that are not measured at fair value through net income as well as to certain off‑balance-sheet credit exposures. CMS Energy and Consumers were required to apply the standard using a modified retrospective approach, under which the initial impacts of the standard are recorded through a cumulative‑effect adjustment to beginning retained earnings on the effective date.

The standard required an increase to the allowance for loan losses at EnerBank. Prior to the standard, the allowance reflected expected credit losses over a 12‑month period, but the new guidance requires the allowance to reflect expected credit losses over the entire life of the loans. As a result, CMS Energy recorded a $65 million increase to its expected credit loss reserves on January 1, 2020, with the offsetting adjustment recorded to retained earnings, net of taxes of $14 million. The standard also requires an increase in the initial provision for loan losses recognized in net income for new loans originated in 2020 and beyond. The adoption of this standard resulted in a $9 million reduction to CMS Energy’s income before income taxes for the six months ended June 30, 2020. For further information on EnerBank’s loans and the related allowance for loan losses, see Note 7, Notes Receivable. At Consumers, the standard applies to the allowance for uncollectible accounts, but did not result in any significant changes to the allowance methodology and did not have a material impact on Consumers’ consolidated financial statements.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting: This standard, which was effective as of March 12, 2020 for CMS Energy and Consumers, provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain

contracts to replace LIBOR with a new reference rate. The guidance, if elected, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. The guidance will also facilitate the continuation of hedge accounting for derivatives that may have to be modified to incorporate a new rate. The guidance is effective through December 31, 2022. CMS Energy and Consumers presently have various contracts that reference LIBOR and they are assessing how this standard may be applied to specific contract modifications.

XML

Regulatory Matters

6 Months Ended

Jun. 30, 2020

Public Utilities, General Disclosures [Line Items]

Regulatory Matters

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 recovery from customers, the adequacy of the record of evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

COVID‑19 Costs Accounting Deferral: In April 2020, the MPSC issued an order authorizing Consumers to defer uncollectible accounts expense incurred beginning March 24, 2020 that are in excess of the amount used to set existing rates. At June 30, 2020, Consumers recorded $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. The order also requested that interested parties submit comments by the end of April 2020 regarding utility accounting for COVID‑19-related expenses and COVID‑19-related impacts to regulatory activities. In July 2020, the MPSC issued an order denying deferred accounting treatment for any additional cost categories beyond uncollectible accounts expense.

Voluntary Transmission Asset Sale Gain Share: In September 2019, Consumers completed a sale of a portion of its electric utility’s substation transmission equipment to METC. In December 2019, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with customers; this application was approved by the MPSC in April 2020. As a result, Consumers deferred $17 million of the gain as a regulatory liability in 2019 and will share that gain with customers through an offset to additional spending in 2020 or through a bill credit to customers in 2021. During June 2020, Consumers recognized a portion of the deferred gain as an offset to storm costs that exceeded those currently recovered through rates. At June 30, 2020, Consumers had a remaining current regulatory liability of $15 million.

Energy Waste Reduction Plan Incentive: Consumers filed its 2019 waste reduction reconciliation in June 2020, requesting the MPSC’s approval to collect from customers the maximum performance incentive of $34 million for exceeding its statutory savings targets in 2019. Consumers recognized incentive revenue under this program of $34 million in 2019.

Consumers Energy Company

Public Utilities, General Disclosures [Line Items]

Regulatory Matters

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 recovery from customers, the adequacy of the record of evidence supporting the recovery of Smart Energy investments, and other matters. Consumers is unable to predict the outcome of these appeals.

COVID‑19 Costs Accounting Deferral: In April 2020, the MPSC issued an order authorizing Consumers to defer uncollectible accounts expense incurred beginning March 24, 2020 that are in excess of the amount used to set existing rates. At June 30, 2020, Consumers recorded $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. The order also requested that interested parties submit comments by the end of April 2020 regarding utility accounting for COVID‑19-related expenses and COVID‑19-related impacts to regulatory activities. In July 2020, the MPSC issued an order denying deferred accounting treatment for any additional cost categories beyond uncollectible accounts expense.

Voluntary Transmission Asset Sale Gain Share: In September 2019, Consumers completed a sale of a portion of its electric utility’s substation transmission equipment to METC. In December 2019, Consumers filed an application with the MPSC requesting approval to share voluntarily half of the gain from the sale with customers; this application was approved by the MPSC in April 2020. As a result, Consumers deferred $17 million of the gain as a regulatory liability in 2019 and will share that gain with customers through an offset to additional spending in 2020 or through a bill credit to customers in 2021. During June 2020, Consumers recognized a portion of the deferred gain as an offset to storm costs that exceeded those currently recovered through rates. At June 30, 2020, Consumers had a remaining current regulatory liability of $15 million.

Energy Waste Reduction Plan Incentive: Consumers filed its 2019 waste reduction reconciliation in June 2020, requesting the MPSC’s approval to collect from customers the maximum performance incentive of $34 million for exceeding its statutory savings targets in 2019. Consumers recognized incentive revenue under this program of $34 million in 2019.

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Contingencies and Commitments

6 Months Ended

Jun. 30, 2020

Site Contingency [Line Items]

Contingencies and Commitments

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, were 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. In 2016, CMS Energy entities reached a settlement with the plaintiffs in the Kansas and Missouri class action cases for an amount that was not material to CMS Energy. In 2017, the federal district court approved the settlement. Plaintiffs are making claims for 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.

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 were remanded back to the federal district court.

In 2016, the federal district court granted the defendants’ motion for summary judgment in the individual lawsuit filed in Kansas based on a release in a prior settlement involving similar allegations; the order of summary judgment was subsequently appealed. In 2018, the U.S. Court of Appeals for the Ninth Circuit reversed the lower court’s ruling and remanded the case back to the federal district court.

In 2017, the federal district court denied plaintiffs’ motion for class certification in the two pending class action cases in Wisconsin. The plaintiffs appealed that decision to the U.S. Court of Appeals for the Ninth Circuit and in 2018, the Ninth Circuit Court of Appeals reversed and remanded the matter back to the federal district court for further consideration.

In January 2019, the judge in the multidistrict litigation granted motions filed by plaintiffs for Suggestion of Remand of the actions back to the respective transferor courts in Wisconsin and Kansas for further handling. In the Kansas action, the Judicial Panel on Multidistrict Litigation ordered the remand and the case has been transferred. In the Wisconsin actions, oppositions to the remand were filed, but the Judicial Panel on Multidistrict Litigation granted the remand in June 2019.

In 2019, CMS Energy and the plaintiffs in each of the Kansas and the Wisconsin actions engaged in settlement discussions and CMS Energy recorded a $30 million liability at December 31, 2019 as the probable estimate to settle the two cases. The parties executed a settlement agreement in the Kansas case in February 2020, and that case is now complete. The parties executed a settlement agreement in the Wisconsin case, and a motion for preliminary approval was filed with the Federal District Court in March 2020. In April 2020, the Wisconsin court issued a preliminary approval order. A fairness hearing will occur in August 2020. CMS Energy can give no assurances that the Wisconsin court will approve the settlement. If settlement is not approved and the outcome after appeals is unfavorable to CMS Energy, the

remaining Wisconsin case 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 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 EGLE 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, which is valid through September 2020. CMS Land submitted a renewal request for the permit in April 2020.

At June 30, 2020, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. 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 $56 million. CMS Energy expects to pay the following amounts for long‑term leachate disposal and operating and maintenance costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
CMS Energy
Long‑term leachate disposal and operating and maintenance costs		$	3		$	4		$	4		$	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, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating. CMS Energy has concluded that the government’s tax claim is without merit and will continue to contest 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 $4 million. At June 30, 2020, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

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 and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At June 30, 2020, 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, as no amount in the range was considered a better estimate than any other amount.

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 the Ludington pumped-storage plant. 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, but cannot predict the financial impact or outcome.

MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. Under this PPA, Consumers pays the MCV Partnership a fixed energy charge based on Consumers’ annual average baseload coal generating plant operating and maintenance cost, fuel inventory, and administrative and general expenses. The MCV Partnership asserts that, under the Clean Air Act, Consumers should have installed pollution control equipment on coal‑fueled electric generating units years before they were retired. The MCV Partnership also asserts that Consumers should have installed pollution control equipment earlier on its remaining coal‑fueled electric generating units. Additionally, the MCV Partnership claims that Consumers improperly characterized certain costs included in the calculation of the fixed energy charge.

In January 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with its claim against Consumers related to the Clean Air Act; the majority of the MCV Partnership’s claim, which estimated damages and interest in excess of $270 million, was related to this dismissed claim. In April 2020, the MCV Partnership and Consumers signed a term sheet outlining a settlement in principle of all outstanding disputes between the parties. The settlement and associated agreements will require MPSC approval. Once those are approved, the parties will dismiss this matter with prejudice. If settlement is not approved, the arbitration panel will issue an order. Consumers believes that the MCV Partnership’s claims are without merit, but cannot predict the financial impact or outcome of the matter.

Underwater Cables in Straits of Mackinac: Consumers owns certain underwater electric cables in the Straits of Mackinac, which were de‑energized and retired in 1990. Consumers was notified that some of these cables were damaged as a result of vessel activity in 2018. Following the notification, Consumers located, inspected, sampled, capped, and returned the damaged retired cables to their original location on the lake bottom, and did not find any substantive evidence of environmental contamination. After collaborating with the State of Michigan, local Native American tribes, and other stakeholders, Consumers submitted a permit application and removal work plan with EGLE and the U.S. Army Corps of Engineers in December 2019 for partial removal of all Consumers-owned cables. In March 2020, EGLE issued a permit for the removal work and, as a result, Consumers recorded an ARO liability of $5 million for the cost to remove partially its cables. Removal work is expected to be complete in August 2020. Consumers recovers the cost of recorded AROs through MPSC-approved depreciation rates.

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 June 30, 2020, Consumers had a recorded liability of $63 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 $67 million. Consumers expects to pay the following amounts for remediation and other response activity costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
Consumers
Remediation and other response activity costs		$	7		$	8		$	20		$	11		$	2		$	2

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.

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 June 30, 2020, Consumers had a regulatory asset of $126 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 June 30, 2020, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to

Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

As a result of the fire and the resulting curtailment, Consumers could be subject to disallowances of gas purchased and costs associated with the repairs to the Ray Compressor Station. Consumers’ incremental cost of gas purchased during the incident was $7 million. Additionally, at June 30, 2020, Consumers had incurred capital expenditures of $12 million to restore the compressor station.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages. At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at June 30, 2020:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from stock and asset sale agreements¹	various	indefinite		$	153		$	2
Guarantee²	July 2011	indefinite		30			—
Consumers
Guarantee²	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. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

²  This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

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 carrying value of these indemnity obligations is $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

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, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims 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 and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

Consumers Energy Company

Site Contingency [Line Items]

Contingencies and Commitments

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, were 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. In 2016, CMS Energy entities reached a settlement with the plaintiffs in the Kansas and Missouri class action cases for an amount that was not material to CMS Energy. In 2017, the federal district court approved the settlement. Plaintiffs are making claims for 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.

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 were remanded back to the federal district court.

In 2016, the federal district court granted the defendants’ motion for summary judgment in the individual lawsuit filed in Kansas based on a release in a prior settlement involving similar allegations; the order of summary judgment was subsequently appealed. In 2018, the U.S. Court of Appeals for the Ninth Circuit reversed the lower court’s ruling and remanded the case back to the federal district court.

In 2017, the federal district court denied plaintiffs’ motion for class certification in the two pending class action cases in Wisconsin. The plaintiffs appealed that decision to the U.S. Court of Appeals for the Ninth Circuit and in 2018, the Ninth Circuit Court of Appeals reversed and remanded the matter back to the federal district court for further consideration.

In January 2019, the judge in the multidistrict litigation granted motions filed by plaintiffs for Suggestion of Remand of the actions back to the respective transferor courts in Wisconsin and Kansas for further handling. In the Kansas action, the Judicial Panel on Multidistrict Litigation ordered the remand and the case has been transferred. In the Wisconsin actions, oppositions to the remand were filed, but the Judicial Panel on Multidistrict Litigation granted the remand in June 2019.

In 2019, CMS Energy and the plaintiffs in each of the Kansas and the Wisconsin actions engaged in settlement discussions and CMS Energy recorded a $30 million liability at December 31, 2019 as the probable estimate to settle the two cases. The parties executed a settlement agreement in the Kansas case in February 2020, and that case is now complete. The parties executed a settlement agreement in the Wisconsin case, and a motion for preliminary approval was filed with the Federal District Court in March 2020. In April 2020, the Wisconsin court issued a preliminary approval order. A fairness hearing will occur in August 2020. CMS Energy can give no assurances that the Wisconsin court will approve the settlement. If settlement is not approved and the outcome after appeals is unfavorable to CMS Energy, the

remaining Wisconsin case 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 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 EGLE 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, which is valid through September 2020. CMS Land submitted a renewal request for the permit in April 2020.

At June 30, 2020, CMS Energy had a recorded liability of $45 million for its remaining obligations for environmental remediation. 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 $56 million. CMS Energy expects to pay the following amounts for long‑term leachate disposal and operating and maintenance costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
CMS Energy
Long‑term leachate disposal and operating and maintenance costs		$	3		$	4		$	4		$	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, in connection with the sale, CMS Energy owes $152 million in taxes, plus substantial penalties and interest that could be up to or exceed the amount of the taxes claimed. In 2015, the matter was proceeding to formal arbitration; however, since then, the government of Equatorial Guinea has stopped communicating. CMS Energy has concluded that the government’s tax claim is without merit and will continue to contest 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 $4 million. At June 30, 2020, Consumers had a recorded liability of $3 million, the minimum amount in the range of its estimated probable NREPA liability, as no amount in the range was considered a better estimate than any other amount.

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 and creditworthiness of potentially responsible parties involved with each site, affect Consumers’ share of the total liability. At June 30, 2020, 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, as no amount in the range was considered a better estimate than any other amount.

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 the Ludington pumped-storage plant. 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, but cannot predict the financial impact or outcome.

MCV PPA: In 2017, the MCV Partnership initiated arbitration against Consumers, asserting a breach of contract associated with the MCV PPA. Under this PPA, Consumers pays the MCV Partnership a fixed energy charge based on Consumers’ annual average baseload coal generating plant operating and maintenance cost, fuel inventory, and administrative and general expenses. The MCV Partnership asserts that, under the Clean Air Act, Consumers should have installed pollution control equipment on coal‑fueled electric generating units years before they were retired. The MCV Partnership also asserts that Consumers should have installed pollution control equipment earlier on its remaining coal‑fueled electric generating units. Additionally, the MCV Partnership claims that Consumers improperly characterized certain costs included in the calculation of the fixed energy charge.

In January 2019, an arbitration panel issued an order concluding that the MCV Partnership is not entitled to any damages associated with its claim against Consumers related to the Clean Air Act; the majority of the MCV Partnership’s claim, which estimated damages and interest in excess of $270 million, was related to this dismissed claim. In April 2020, the MCV Partnership and Consumers signed a term sheet outlining a settlement in principle of all outstanding disputes between the parties. The settlement and associated agreements will require MPSC approval. Once those are approved, the parties will dismiss this matter with prejudice. If settlement is not approved, the arbitration panel will issue an order. Consumers believes that the MCV Partnership’s claims are without merit, but cannot predict the financial impact or outcome of the matter.

Underwater Cables in Straits of Mackinac: Consumers owns certain underwater electric cables in the Straits of Mackinac, which were de‑energized and retired in 1990. Consumers was notified that some of these cables were damaged as a result of vessel activity in 2018. Following the notification, Consumers located, inspected, sampled, capped, and returned the damaged retired cables to their original location on the lake bottom, and did not find any substantive evidence of environmental contamination. After collaborating with the State of Michigan, local Native American tribes, and other stakeholders, Consumers submitted a permit application and removal work plan with EGLE and the U.S. Army Corps of Engineers in December 2019 for partial removal of all Consumers-owned cables. In March 2020, EGLE issued a permit for the removal work and, as a result, Consumers recorded an ARO liability of $5 million for the cost to remove partially its cables. Removal work is expected to be complete in August 2020. Consumers recovers the cost of recorded AROs through MPSC-approved depreciation rates.

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 June 30, 2020, Consumers had a recorded liability of $63 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 $67 million. Consumers expects to pay the following amounts for remediation and other response activity costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
Consumers
Remediation and other response activity costs		$	7		$	8		$	20		$	11		$	2		$	2

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.

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 June 30, 2020, Consumers had a regulatory asset of $126 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 June 30, 2020, Consumers had a recorded liability of less than $1 million, the minimum amount in the range of its estimated probable liability, as no amount in the range was considered a better estimate than any other amount.

Ray Compressor Station: On January 30, 2019, Consumers experienced a fire at the Ray Compressor Station, which resulted in the Ray Storage Field being off‑line or operating at significantly reduced capacity, which negatively affected Consumers’ natural gas supply and delivery capacity. This incident, which occurred during the extreme polar vortex weather condition, required Consumers to request voluntary reductions in customer load, to implement contingency gas supply purchases, and to implement a curtailment of natural gas deliveries for industrial and large commercial customers pursuant to

Consumers’ MPSC curtailment tariff. The curtailment and request for voluntary reductions of customer loads were canceled as of midnight, February 1, 2019. Consumers investigated the cause of the incident, and filed a report on the incident with the MPSC in April 2019. In response, the MPSC issued an order in July 2019, directing Consumers to file additional reports regarding the incident and to include detail of the resulting costs in a future rate proceeding. The compressor station is presently operating at full capacity.

As a result of the fire and the resulting curtailment, Consumers could be subject to disallowances of gas purchased and costs associated with the repairs to the Ray Compressor Station. Consumers’ incremental cost of gas purchased during the incident was $7 million. Additionally, at June 30, 2020, Consumers had incurred capital expenditures of $12 million to restore the compressor station.

In May 2020, the MPSC approved an administrative settlement agreement between Consumers and the MPSC Staff, which resulted in a $10,000 civil penalty in connection with the fire. Consumers may also be subject to various claims from impacted customers and claims for damages. At this time, Consumers cannot predict the outcome of these matters or other gas-related incidents and a reasonable estimate of a total loss cannot be made, but they could have a material adverse effect on Consumers’ results of operations, financial condition, or liquidity, and could subject Consumers’ gas utility to increased regulatory scrutiny.

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at June 30, 2020:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from stock and asset sale agreements¹	various	indefinite		$	153		$	2
Guarantee²	July 2011	indefinite		30			—
Consumers
Guarantee²	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. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

²  This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

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 carrying value of these indemnity obligations is $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

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, as well as unasserted claims that may result in such proceedings, arising in the ordinary course of business to which CMS Energy, Consumers, and certain other subsidiaries of CMS Energy are parties. These other lawsuits, proceedings, and unasserted claims 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 and potential claims will not have a material negative effect on their consolidated results of operations, financial condition, or liquidity.

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Financings and Capitalization

6 Months Ended

Jun. 30, 2020

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Financings: Presented in the following table is a summary of major long‑term debt issuances during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Junior subordinated notes²		500		4.750	%	May	June 2050
Total CMS Energy, parent only		$	800
Consumers
Term loan facility³		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds4		134		variable		May	May 2070
Total Consumers		$	1,534
Total CMS Energy		$	2,334

¹  At June 30, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

³  At June 30, 2020, the interest rate on the balance of this term loan facility was 0.556 percent, based on an interest rate of one‑week LIBOR plus 0.450 percent.

⁴  The variable rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent (0.077 percent at June 30, 2020).

Presented in the following table is a summary of major long‑term debt retirements during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
Total Consumers		$	350
Total CMS Energy		$	350

In July 2020, Consumers purchased, in lieu of redemption, $35 million of variable-rate tax-exempt revenue bonds due April 2035.

Revolving Credit Facilities: The following revolving credit facilities with banks were available at June 30, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023		$	550		$	—		$	5		$	545
CMS Enterprises, including subsidiaries
September 30, 2025¹		$	18		$	—		$	8		$	10
Consumers²
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			1			249
April 18, 2022		30			—			30			—

¹  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

²  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Short‑term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At June 30, 2020, there were no commercial paper notes outstanding under this program.

Dividend Restrictions: At June 30, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.2 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at June 30, 2020, Consumers had $1.6 billion 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 six months ended June 30, 2020, Consumers paid $276 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million. In March 2020, CMS Energy settled one of these contracts by issuing 2,017,783 shares of common stock for $47.95 per share, resulting in net proceeds of $97 million.

At June 30, 2020, CMS Energy’s remaining forward sales contracts under this program had an aggregate sales price of $150 million. Presented in the following table are details of these contracts:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			June 30, 2020
November 20, 2018	March 31, 2021	777,899		$	50.91		$	49.32
February 21, 2019	March 31, 2021	2,083,340		52.27			50.88

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of June 30, 2020, CMS Energy would have been required to deliver 390,008 shares.

In April 2020, CMS Energy entered into a new equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $500 million. Like the 2018 equity offering program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise. There have been no sales of securities under this program.

Consumers Energy Company

Debt Instrument [Line Items]

Financings and Capitalization

Financings and Capitalization

Financings: Presented in the following table is a summary of major long‑term debt issuances during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Junior subordinated notes²		500		4.750	%	May	June 2050
Total CMS Energy, parent only		$	800
Consumers
Term loan facility³		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds4		134		variable		May	May 2070
Total Consumers		$	1,534
Total CMS Energy		$	2,334

¹  At June 30, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

³  At June 30, 2020, the interest rate on the balance of this term loan facility was 0.556 percent, based on an interest rate of one‑week LIBOR plus 0.450 percent.

⁴  The variable rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent (0.077 percent at June 30, 2020).

Presented in the following table is a summary of major long‑term debt retirements during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
Total Consumers		$	350
Total CMS Energy		$	350

In July 2020, Consumers purchased, in lieu of redemption, $35 million of variable-rate tax-exempt revenue bonds due April 2035.

Revolving Credit Facilities: The following revolving credit facilities with banks were available at June 30, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023		$	550		$	—		$	5		$	545
CMS Enterprises, including subsidiaries
September 30, 2025¹		$	18		$	—		$	8		$	10
Consumers²
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			1			249
April 18, 2022		30			—			30			—

¹  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

²  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Short‑term Borrowings: Under Consumers’ commercial paper program, Consumers may issue, in one or more placements, investment-grade commercial paper notes with maturities of up to 365 days at market interest rates. These issuances are supported by Consumers’ revolving credit facilities and may have an aggregate principal amount outstanding of up to $500 million. While the amount of outstanding commercial paper does not reduce the available capacity of the revolving credit facilities, Consumers does not intend to issue commercial paper in an amount exceeding the available capacity of the facilities. At June 30, 2020, there were no commercial paper notes outstanding under this program.

Dividend Restrictions: At June 30, 2020, payment of dividends by CMS Energy on its common stock was limited to $5.2 billion under provisions of the Michigan Business Corporation Act of 1972.

Under the provisions of its articles of incorporation, at June 30, 2020, Consumers had $1.6 billion 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 six months ended June 30, 2020, Consumers paid $276 million in dividends on its common stock to CMS Energy.

Issuance of Common Stock: In 2018, CMS Energy entered into an equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $250 million. Under this program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise.

During 2018 and 2019, CMS Energy entered into forward sales contracts having an aggregate sales price of $250 million. In March 2020, CMS Energy settled one of these contracts by issuing 2,017,783 shares of common stock for $47.95 per share, resulting in net proceeds of $97 million.

At June 30, 2020, CMS Energy’s remaining forward sales contracts under this program had an aggregate sales price of $150 million. Presented in the following table are details of these contracts:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			June 30, 2020
November 20, 2018	March 31, 2021	777,899		$	50.91		$	49.32
February 21, 2019	March 31, 2021	2,083,340		52.27			50.88

These contracts allow CMS Energy to either physically settle the contracts by issuing shares of its common stock at the then‑applicable forward sale price specified by the agreement or net settle the contracts through the delivery or receipt of cash or shares. CMS Energy may settle the contracts at any time through their maturity dates, and presently intends to physically settle the contracts by delivering shares of its common stock.

The initial forward price in the forward equity sale contracts includes a deduction for commissions and will be adjusted on a daily basis over the term based on an interest rate factor and decreased on certain dates by certain predetermined amounts to reflect expected dividend payments. No amounts are recorded on CMS Energy’s consolidated balance sheets until settlements of the forward equity sale contracts occur. If CMS Energy had elected to net share settle the contracts as of June 30, 2020, CMS Energy would have been required to deliver 390,008 shares.

In April 2020, CMS Energy entered into a new equity offering program under which it may sell, from time to time, shares of CMS Energy common stock having an aggregate sales price of up to $500 million. Like the 2018 equity offering program, CMS Energy may sell its common stock in privately negotiated transactions, in “at the market” offerings, through forward sales transactions or otherwise. There have been no sales of securities under this program.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements

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
	June 30 2020			December 31 2019			June 30 2020			December 31 2019
Assets¹
Cash equivalents		$	100		$	—		$	100		$	—
Restricted cash and cash equivalents		17			17			14			17
CMS Energy common stock		—			—			1			1
Nonqualified deferred compensation plan assets		19			18			15			14
Derivative instruments		3			1			3			1
Total		$	139		$	36		$	133		$	33
Liabilities¹
Nonqualified deferred compensation plan liabilities		$	19		$	18		$	15		$	14
Derivative instruments		21			8			1			—
Total		$	40		$	26		$	16		$	14

¹  All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 12, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount 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.

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 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market‑based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations and certain notes receivable at EnerBank.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $88 million at June 30, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within other interest expense on CMS Energy’s consolidated statements of income. The amount of losses recorded in other comprehensive loss was less than $1 million for the three months ended June 30, 2020 and $3 million for the three months ended June 30, 2019. The amount of losses recorded in other comprehensive loss was $5 million for the six months ended June 30, 2020 and $4 million for the six months ended June 30, 2019. There were no material impacts on other interest expense associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $10 million at June 30, 2020 and $5 million at December 31, 2019. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the three and six months ended June 30, 2020 and 2019.

EnerBank uses fixed-to-floating interest rate swaps to manage interest rate risk exposure associated with changes in the fair value of certain long‑term fixed-rate loans. The interest rate swaps qualify as fair value hedges of long‑term, fixed-rate notes receivable with a notional amount of $134 million at June 30, 2020. The fair value of these interest rate swaps recorded in other liabilities was $7 million at June 30, 2020 and $1 million at December 31, 2019. CMS Energy is adjusting the carrying value of the hedged notes receivable for the change in their fair value due to the hedged risk. Both gains and losses on the swaps and the changes to the carrying value of the hedged notes receivable are recorded within operating revenue on CMS Energy’s consolidated statements of income. The net impact of these hedges on operating revenue was not material for the three and six months ended June 30, 2020 and 2019.

The majority of derivatives classified as Level 3 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. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

Consumers Energy Company

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Fair Value Measurements

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
	June 30 2020			December 31 2019			June 30 2020			December 31 2019
Assets¹
Cash equivalents		$	100		$	—		$	100		$	—
Restricted cash and cash equivalents		17			17			14			17
CMS Energy common stock		—			—			1			1
Nonqualified deferred compensation plan assets		19			18			15			14
Derivative instruments		3			1			3			1
Total		$	139		$	36		$	133		$	33
Liabilities¹
Nonqualified deferred compensation plan liabilities		$	19		$	18		$	15		$	14
Derivative instruments		21			8			1			—
Total		$	40		$	26		$	16		$	14

¹  All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Cash Equivalents: Cash equivalents and restricted cash equivalents consist of money market funds with daily liquidity. For further details, see Note 12, Cash and Cash Equivalents.

Nonqualified Deferred Compensation Plan Assets and Liabilities: The nonqualified deferred compensation plan assets consist of mutual funds, which are valued using the daily quoted net asset values. CMS Energy and Consumers value their nonqualified deferred compensation plan liabilities based on the fair values of the plan assets, as they reflect the amount 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.

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 2 or Level 3.

The derivatives classified as Level 2 are interest rate swaps at CMS Energy, which are valued using market‑based inputs. CMS Energy uses interest rate swaps to manage its interest rate risk on certain long‑term debt obligations and certain notes receivable at EnerBank.

A subsidiary of CMS Enterprises uses floating-to-fixed interest rate swaps to reduce the impact of interest rate fluctuations associated with future interest payments on certain long‑term variable-rate debt. The interest rate swaps are accounted for as cash flow hedges of the future variability of interest payments on debt with a notional amount of $88 million at June 30, 2020. Gains or losses on these swaps are initially reported in other comprehensive income (loss) and then, as interest payments are made on the hedged debt, are recognized in earnings within other interest expense on CMS Energy’s consolidated statements of income. The amount of losses recorded in other comprehensive loss was less than $1 million for the three months ended June 30, 2020 and $3 million for the three months ended June 30, 2019. The amount of losses recorded in other comprehensive loss was $5 million for the six months ended June 30, 2020 and $4 million for the six months ended June 30, 2019. There were no material impacts on other interest expense associated with these swaps during the periods presented. The fair value of these swaps recorded in other liabilities on CMS Energy’s consolidated balance sheets totaled $10 million at June 30, 2020 and $5 million at December 31, 2019. CMS Energy also has other interest rate swaps that economically hedge interest rate risk on debt, but that do not qualify for cash flow hedge accounting; the amounts associated with these swaps were not material for the three and six months ended June 30, 2020 and 2019.

EnerBank uses fixed-to-floating interest rate swaps to manage interest rate risk exposure associated with changes in the fair value of certain long‑term fixed-rate loans. The interest rate swaps qualify as fair value hedges of long‑term, fixed-rate notes receivable with a notional amount of $134 million at June 30, 2020. The fair value of these interest rate swaps recorded in other liabilities was $7 million at June 30, 2020 and $1 million at December 31, 2019. CMS Energy is adjusting the carrying value of the hedged notes receivable for the change in their fair value due to the hedged risk. Both gains and losses on the swaps and the changes to the carrying value of the hedged notes receivable are recorded within operating revenue on CMS Energy’s consolidated statements of income. The net impact of these hedges on operating revenue was not material for the three and six months ended June 30, 2020 and 2019.

The majority of derivatives classified as Level 3 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. Due to the lack of quoted pricing information, Consumers determines the fair value of its FTRs based on Consumers’ average historical settlements. There was no material activity within the Level 3 categories of assets and liabilities during the periods presented.

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Financial Instruments

6 Months Ended

Jun. 30, 2020

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Financial Instruments

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 excludes cash, cash equivalents, short‑term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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
	June 30, 2020															December 31, 2019
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable2		2,597			2,896			—			—			2,896			2,500			2,652			—			—			2,652
Securities held to maturity		29			29			—			29			—			26			26			—			26			—
Liabilities
Long-term debt3		15,139			17,154			1,150			14,290			1,714			13,062			14,185			1,197			11,048			1,940
Long-term payables4		31			32			—			—			32			30			32			—			—			32
Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable – related party5		103			103			—			—			103			103			103			—			—			103
Liabilities
Long-term debt6		8,404			9,912			—			8,198			1,714			7,250			8,010			—			6,070			1,940

¹  Includes current portion of long-term accounts receivable of $12 million at June 30, 2020 and $13 million at December 31, 2019.

²  Includes current portion of notes receivable of $264 million at June 30, 2020 and $242 million at December 31, 2019. For further details, see Note 7, Notes Receivable.

³  Includes current portion of long‑term debt of $1.7 billion at June 30, 2020 and $1.1 billion at December 31, 2019.

⁴  Includes current portion of long‑term payables of $6 million at June 30, 2020 and $1 million at December 31, 2019.

⁵  Includes current portion of notes receivable – related party of $7 million at June 30, 2020 and December 31, 2019. For further details, see Note 7, Notes Receivable.

⁶  Includes current portion of long‑term debt of $537 million at June 30, 2020 and $202 million at December 31, 2019.

The effects of third‑party credit enhancements were excluded from the fair value measurements of long‑term debt. The principal amount of CMS Energy’s long‑term debt supported by third‑party credit enhancements was $35 million at June 30, 2020 and December 31, 2019. The entirety of these amounts was at Consumers.

Debt securities classified as held to maturity consisted primarily of mortgage‑backed securities and Utah Housing Corporation bonds held by EnerBank. Presented in the following table are these investment securities:

In Millions
	June 30, 2020												December 31, 2019
	Cost			Unrealized Gains			Unrealized Losses			Fair Value			Cost			Unrealized Gains			Unrealized Losses			Fair Value
CMS Energy
Debt securities		$	29		$	—		$	—		$	29		$	26		$	—		$	—		$	26

Consumers Energy Company

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Financial Instruments

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 excludes cash, cash equivalents, short‑term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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
	June 30, 2020															December 31, 2019
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable2		2,597			2,896			—			—			2,896			2,500			2,652			—			—			2,652
Securities held to maturity		29			29			—			29			—			26			26			—			26			—
Liabilities
Long-term debt3		15,139			17,154			1,150			14,290			1,714			13,062			14,185			1,197			11,048			1,940
Long-term payables4		31			32			—			—			32			30			32			—			—			32
Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable – related party5		103			103			—			—			103			103			103			—			—			103
Liabilities
Long-term debt6		8,404			9,912			—			8,198			1,714			7,250			8,010			—			6,070			1,940

¹  Includes current portion of long-term accounts receivable of $12 million at June 30, 2020 and $13 million at December 31, 2019.

²  Includes current portion of notes receivable of $264 million at June 30, 2020 and $242 million at December 31, 2019. For further details, see Note 7, Notes Receivable.

³  Includes current portion of long‑term debt of $1.7 billion at June 30, 2020 and $1.1 billion at December 31, 2019.

⁴  Includes current portion of long‑term payables of $6 million at June 30, 2020 and $1 million at December 31, 2019.

⁵  Includes current portion of notes receivable – related party of $7 million at June 30, 2020 and December 31, 2019. For further details, see Note 7, Notes Receivable.

⁶  Includes current portion of long‑term debt of $537 million at June 30, 2020 and $202 million at December 31, 2019.

The effects of third‑party credit enhancements were excluded from the fair value measurements of long‑term debt. The principal amount of CMS Energy’s long‑term debt supported by third‑party credit enhancements was $35 million at June 30, 2020 and December 31, 2019. The entirety of these amounts was at Consumers.

Debt securities classified as held to maturity consisted primarily of mortgage‑backed securities and Utah Housing Corporation bonds held by EnerBank. Presented in the following table are these investment securities:

In Millions
	June 30, 2020												December 31, 2019
	Cost			Unrealized Gains			Unrealized Losses			Fair Value			Cost			Unrealized Gains			Unrealized Losses			Fair Value
CMS Energy
Debt securities		$	29		$	—		$	—		$	29		$	26		$	—		$	—		$	26

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Notes Receivable

6 Months Ended

Jun. 30, 2020

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes Receivable

Notes Receivable

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

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	264		$	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses		2,333			2,258
Total notes receivable		$	2,597		$	2,500
Consumers
Current
DB SERP note receivable – related party		$	7		$	7
Non‑current
DB SERP note receivable – related party		96			96
Total notes receivable		$	103		$	103

EnerBank Notes Receivable

EnerBank notes receivable are primarily unsecured, fixed-rate installment loans provided throughout the U.S. to finance home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. 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 $131 million at June 30, 2020 and $134 million at December 31, 2019.

During the six months ended June 30, 2020, EnerBank purchased a portfolio of secured and unsecured consumer installment loans with a principal value of $17 million.

EnerBank utilizes FICO scores as a key credit quality indicator when underwriting new loans and in assessing the credit exposures in its loan portfolio. The score is determined at the time of a borrower’s application and is generally not updated since the average duration of loans is about two years. At June 30, 2020, 85 percent of EnerBank’s loans had a FICO score rating between good and excellent. At June 30, 2020, 97 percent of EnerBank’s loan portfolio was originated within the past five years.

The allowance for loan losses at June 30, 2020 reflects expected credit losses over the entire lifetime of the loan portfolio. EnerBank estimates the allowance by using the “weighted-average remaining maturity” methodology for their term loans, and the “probability of default and loss given default” methodology for their same-as-cash loans. These methodologies consider historical loan loss experience, prepayment expectations, and credit quality indicators. EnerBank considers current and projected economic conditions, and other reasonable and supportable forecast information to determine if adjustments to the allowance are necessary. The allowance is increased by the provision for loan losses and decreased by loan charge‑offs net of recoveries. 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. Presented in the following table are the changes in the allowance for loan losses:

In Millions
June 30, 2020	Three Months Ended				Six Months Ended
Balance at beginning of period		$	99			$	33
Effects of new accounting standard¹		—				62
Provisions for loan losses		13				26
Charge-offs		(9		)		(20		)
Recoveries		1				3
Balance at end of period		$	104			$	104

¹  The allowance for loan losses at December 31, 2019 reflected expected credit losses over a 12-month period. On January 1, 2020, in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments, the allowance for loan losses was adjusted to reflect expected credit losses over the life of the loan. Additionally, EnerBank recorded $3 million for expected credit losses related to unfunded loan commitments. For further details, see Note 1, New Accounting Standards.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent loans was $23 million at June 30, 2020 and $33 million at December 31, 2019. At June 30, 2020 and December 31, 2019, EnerBank’s loans that had been modified as troubled debt restructurings were immaterial.

As a result of the COVID‑19 pandemic, EnerBank has instituted new payment accommodations for current customers. At June 30, 2020, EnerBank had not experienced increased delinquent loans, charge-offs, or increased loan modifications due to the COVID‑19 pandemic. EnerBank did not make any material adjustments to their allowance for loan losses at June 30, 2020 due to the COVID‑19 pandemic. EnerBank cannot predict the longer-term impacts of the pandemic, but could experience slower lending growth, higher loan write-offs, and increased loan modifications.

EnerBank issues loan commitments to meet customer-financing needs. These commitments are agreements to provide credit as long as certain conditions are met and expire after 120 days. EnerBank uses the same credit policies in making these commitments as it uses for loans. EnerBank had $513 million of off-balance-sheet unfunded loan commitments at June 30, 2020, and had recorded a liability of $9 million for expected credit losses on those commitments.

EnerBank has entered into interest rate swaps on $134 million of its loans (notes receivable). For information about interest rate swaps see Note 5, Fair Value Measurements.

DB SERP Note Receivable – Related Party

The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

Consumers Energy Company

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes Receivable

Notes Receivable

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

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	264		$	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses		2,333			2,258
Total notes receivable		$	2,597		$	2,500
Consumers
Current
DB SERP note receivable – related party		$	7		$	7
Non‑current
DB SERP note receivable – related party		96			96
Total notes receivable		$	103		$	103

EnerBank Notes Receivable

EnerBank notes receivable are primarily unsecured, fixed-rate installment loans provided throughout the U.S. to finance home improvements. EnerBank records its notes receivable at cost, less an allowance for loan losses. 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 $131 million at June 30, 2020 and $134 million at December 31, 2019.

During the six months ended June 30, 2020, EnerBank purchased a portfolio of secured and unsecured consumer installment loans with a principal value of $17 million.

EnerBank utilizes FICO scores as a key credit quality indicator when underwriting new loans and in assessing the credit exposures in its loan portfolio. The score is determined at the time of a borrower’s application and is generally not updated since the average duration of loans is about two years. At June 30, 2020, 85 percent of EnerBank’s loans had a FICO score rating between good and excellent. At June 30, 2020, 97 percent of EnerBank’s loan portfolio was originated within the past five years.

The allowance for loan losses at June 30, 2020 reflects expected credit losses over the entire lifetime of the loan portfolio. EnerBank estimates the allowance by using the “weighted-average remaining maturity” methodology for their term loans, and the “probability of default and loss given default” methodology for their same-as-cash loans. These methodologies consider historical loan loss experience, prepayment expectations, and credit quality indicators. EnerBank considers current and projected economic conditions, and other reasonable and supportable forecast information to determine if adjustments to the allowance are necessary. The allowance is increased by the provision for loan losses and decreased by loan charge‑offs net of recoveries. 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. Presented in the following table are the changes in the allowance for loan losses:

In Millions
June 30, 2020	Three Months Ended				Six Months Ended
Balance at beginning of period		$	99			$	33
Effects of new accounting standard¹		—				62
Provisions for loan losses		13				26
Charge-offs		(9		)		(20		)
Recoveries		1				3
Balance at end of period		$	104			$	104

¹  The allowance for loan losses at December 31, 2019 reflected expected credit losses over a 12-month period. On January 1, 2020, in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments, the allowance for loan losses was adjusted to reflect expected credit losses over the life of the loan. Additionally, EnerBank recorded $3 million for expected credit losses related to unfunded loan commitments. For further details, see Note 1, New Accounting Standards.

Loans that are 30 days or more past due are considered delinquent. The balance of EnerBank’s delinquent loans was $23 million at June 30, 2020 and $33 million at December 31, 2019. At June 30, 2020 and December 31, 2019, EnerBank’s loans that had been modified as troubled debt restructurings were immaterial.

As a result of the COVID‑19 pandemic, EnerBank has instituted new payment accommodations for current customers. At June 30, 2020, EnerBank had not experienced increased delinquent loans, charge-offs, or increased loan modifications due to the COVID‑19 pandemic. EnerBank did not make any material adjustments to their allowance for loan losses at June 30, 2020 due to the COVID‑19 pandemic. EnerBank cannot predict the longer-term impacts of the pandemic, but could experience slower lending growth, higher loan write-offs, and increased loan modifications.

EnerBank issues loan commitments to meet customer-financing needs. These commitments are agreements to provide credit as long as certain conditions are met and expire after 120 days. EnerBank uses the same credit policies in making these commitments as it uses for loans. EnerBank had $513 million of off-balance-sheet unfunded loan commitments at June 30, 2020, and had recorded a liability of $9 million for expected credit losses on those commitments.

EnerBank has entered into interest rate swaps on $134 million of its loans (notes receivable). For information about interest rate swaps see Note 5, Fair Value Measurements.

DB SERP Note Receivable – Related Party

The DB SERP note receivable – related party is Consumers’ portion of a demand note payable issued by CMS Energy to the DB SERP rabbi trust. The demand note bears interest at an annual rate of 4.10 percent and has a maturity date of 2028.

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Retirement Benefits

6 Months Ended

Jun. 30, 2020

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

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

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 Plans																OPEB Plan
	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	13			$	10			$	25			$	20			$	4			$	3			$	8			$	7
Interest cost		20				24				41				49				9				10				17				20
Expected return on plan assets		(48		)		(41		)		(96		)		(81		)		(25		)		(22		)		(50		)		(44		)
Amortization of:
Net loss		22				12				44				24				3				6				7				13
Prior service cost (credit)		1				1				1				1				(14		)		(15		)		(28		)		(31		)
Net periodic cost (credit)		$	8			$	6			$	15			$	13			$	(23	)		$	(18	)		$	(46	)		$	(35	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	24			$	20			$	4			$	4			$	8			$	7
Interest cost		19				23				39				46				8				10				16				20
Expected return on plan assets		(46		)		(38		)		(91		)		(76		)		(24		)		(20		)		(47		)		(41		)
Amortization of:
Net loss		21				11				42				23				3				6				7				13
Prior service cost (credit)		1				1				1				1				(13		)		(16		)		(27		)		(31		)
Net periodic cost (credit)		$	7			$	7			$	15			$	14			$	(22	)		$	(16	)		$	(43	)		$	(32	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

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

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 Plans																OPEB Plan
	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	13			$	10			$	25			$	20			$	4			$	3			$	8			$	7
Interest cost		20				24				41				49				9				10				17				20
Expected return on plan assets		(48		)		(41		)		(96		)		(81		)		(25		)		(22		)		(50		)		(44		)
Amortization of:
Net loss		22				12				44				24				3				6				7				13
Prior service cost (credit)		1				1				1				1				(14		)		(15		)		(28		)		(31		)
Net periodic cost (credit)		$	8			$	6			$	15			$	13			$	(23	)		$	(18	)		$	(46	)		$	(35	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	24			$	20			$	4			$	4			$	8			$	7
Interest cost		19				23				39				46				8				10				16				20
Expected return on plan assets		(46		)		(38		)		(91		)		(76		)		(24		)		(20		)		(47		)		(41		)
Amortization of:
Net loss		21				11				42				23				3				6				7				13
Prior service cost (credit)		1				1				1				1				(13		)		(16		)		(27		)		(31		)
Net periodic cost (credit)		$	7			$	7			$	15			$	14			$	(22	)		$	(16	)		$	(43	)		$	(32	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

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Income Taxes

6 Months Ended

Jun. 30, 2020

Income Taxes [Line Items]

Income Taxes

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:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

Consumers Energy Company

Income Taxes [Line Items]

Income Taxes

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:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

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Earnings Per Share - CMS Energy

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share - CMS Energy

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						Six Months Ended
June 30	2020			2019			2020			2019
Income available to common stockholders
Net income		$	137		$	94		$	380		$	307
Less income attributable to noncontrolling interests		1			1			1			1
Net income available to common stockholders – basic and diluted		$	136		$	93		$	379		$	306
Average common shares outstanding
Weighted-average shares – basic		285.5			282.9			284.4			282.9
Add dilutive nonvested stock awards		0.6			0.6			0.7			0.6
Add dilutive forward equity sale contracts		0.4			0.5			0.7			0.3
Weighted-average shares – diluted		286.5			284.0			285.8			283.8
Net income per average common share available to common stockholders
Basic		$	0.48		$	0.33		$	1.33		$	1.08
Diluted		0.48			0.33			1.33			1.08

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 in the computation of basic EPS.

Forward Equity Sale Contracts

CMS Energy has entered into forward equity sale contracts. These forward equity sale contracts are non‑participating securities. While the forward sale price in the forward equity sale contract is decreased on certain dates by certain predetermined amounts to reflect expected dividend payments, these price adjustments were set upon inception of the agreement and the forward contract does not give the owner the right to participate in undistributed earnings. Accordingly, the forward equity sale contracts were included in the computation of diluted EPS, but not in the computation of basic EPS. For further details on the forward equity sale contracts, see Note 4, Financings and Capitalization.

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Revenue

6 Months Ended

Jun. 30, 2020

Revenue, Initial Application Period Cumulative Effect Transition [Line Items]

Revenue

Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Three Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,020		$	306		$	—		$	—		$	1,326
Other		—			—			17			—			17
Revenue recognized from contracts with customers		$	1,020		$	306		$	17		$	—		$	1,343
Leasing income		—			—			35			—			35
Financing income		2			2			—			61			65
Total operating revenue – CMS Energy		$	1,022		$	308		$	52		$	61		$	1,443
Consumers
Consumers utility revenue
Residential		$	507		$	206								$	713
Commercial		341			51									392
Industrial		126			7									133
Other		46			42									88
Revenue recognized from contracts with customers		$	1,020		$	306								$	1,326
Financing income		2			2									4
Total operating revenue – Consumers		$	1,022		$	308								$	1,330

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $21 million for the three months ended June 30, 2020.

In Millions
Three Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,026		$	305		$	—		$	—		$	1,331
Other		—			—			16			—			16
Revenue recognized from contracts with customers		$	1,026		$	305		$	16		$	—		$	1,347
Leasing income		—			—			42			—			42
Financing income		1			2			—			53			56
Total operating revenue – CMS Energy		$	1,027		$	307		$	58		$	53		$	1,445
Consumers
Consumers utility revenue
Residential		$	423		$	198								$	621
Commercial		362			58									420
Industrial		174			8									182
Other		67			41									108
Revenue recognized from contracts with customers		$	1,026		$	305								$	1,331
Financing income		1			2									3
Total operating revenue – Consumers		$	1,027		$	307								$	1,334

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $29 million for the three months ended June 30, 2019.

In Millions
Six Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,045		$	1,020		$	—		$	—		$	3,065
Other		—			—			36			—			36
Revenue recognized from contracts with customers		$	2,045		$	1,020		$	36		$	—		$	3,101
Leasing income		—			—			74			—			74
Financing income		5			4			—			123			132
Total operating revenue – CMS Energy		$	2,050		$	1,024		$	110		$	123		$	3,307
Consumers
Consumers utility revenue
Residential		$	988		$	699								$	1,687
Commercial		680			200									880
Industrial		266			27									293
Other		111			94									205
Revenue recognized from contracts with customers		$	2,045		$	1,020								$	3,065
Financing income		5			4									9
Total operating revenue – Consumers		$	2,050		$	1,024								$	3,074

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $46 million for the six months ended June 30, 2020.

In Millions
Six Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,126		$	1,143		$	—		$	—		$	3,269
Other		—			—			35			—			35
Revenue recognized from contracts with customers		$	2,126		$	1,143		$	35		$	—		$	3,304
Leasing income		—			—			90			—			90
Financing income		4			4			—			102			110
Total operating revenue – CMS Energy		$	2,130		$	1,147		$	125		$	102		$	3,504
Consumers
Consumers utility revenue
Residential		$	946		$	787								$	1,733
Commercial		713			232									945
Industrial		336			33									369
Other		131			91									222
Revenue recognized from contracts with customers		$	2,126		$	1,143								$	3,269
Financing income		4			4									8
Total operating revenue – Consumers		$	2,130		$	1,147								$	3,277

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $63 million for the six months ended June 30, 2019.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff‑based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff‑based sales performance obligations are described below.

• Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of Consumers’ service to stand ready to deliver.

• Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of a bundled

product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed‑term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost, less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past‑due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $8 million for the three months ended June 30, 2020 and $6 million for the three months ended June 30, 2019. CMS Energy and Consumers recorded uncollectible accounts expense of $13 million for the six months ended June 30, 2020 and $12 million for the six months ended June 30, 2019. At June 30, 2020, Consumers deferred $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. For additional information see Note 2, Regulatory Matters.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month‑end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets, were $326 million at June 30, 2020 and $426 million at December 31, 2019.

Alternative‑Revenue Programs: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather-normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

Consumers Energy Company

Revenue, Initial Application Period Cumulative Effect Transition [Line Items]

Revenue

Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Three Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,020		$	306		$	—		$	—		$	1,326
Other		—			—			17			—			17
Revenue recognized from contracts with customers		$	1,020		$	306		$	17		$	—		$	1,343
Leasing income		—			—			35			—			35
Financing income		2			2			—			61			65
Total operating revenue – CMS Energy		$	1,022		$	308		$	52		$	61		$	1,443
Consumers
Consumers utility revenue
Residential		$	507		$	206								$	713
Commercial		341			51									392
Industrial		126			7									133
Other		46			42									88
Revenue recognized from contracts with customers		$	1,020		$	306								$	1,326
Financing income		2			2									4
Total operating revenue – Consumers		$	1,022		$	308								$	1,330

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $21 million for the three months ended June 30, 2020.

In Millions
Three Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,026		$	305		$	—		$	—		$	1,331
Other		—			—			16			—			16
Revenue recognized from contracts with customers		$	1,026		$	305		$	16		$	—		$	1,347
Leasing income		—			—			42			—			42
Financing income		1			2			—			53			56
Total operating revenue – CMS Energy		$	1,027		$	307		$	58		$	53		$	1,445
Consumers
Consumers utility revenue
Residential		$	423		$	198								$	621
Commercial		362			58									420
Industrial		174			8									182
Other		67			41									108
Revenue recognized from contracts with customers		$	1,026		$	305								$	1,331
Financing income		1			2									3
Total operating revenue – Consumers		$	1,027		$	307								$	1,334

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $29 million for the three months ended June 30, 2019.

In Millions
Six Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,045		$	1,020		$	—		$	—		$	3,065
Other		—			—			36			—			36
Revenue recognized from contracts with customers		$	2,045		$	1,020		$	36		$	—		$	3,101
Leasing income		—			—			74			—			74
Financing income		5			4			—			123			132
Total operating revenue – CMS Energy		$	2,050		$	1,024		$	110		$	123		$	3,307
Consumers
Consumers utility revenue
Residential		$	988		$	699								$	1,687
Commercial		680			200									880
Industrial		266			27									293
Other		111			94									205
Revenue recognized from contracts with customers		$	2,045		$	1,020								$	3,065
Financing income		5			4									9
Total operating revenue – Consumers		$	2,050		$	1,024								$	3,074

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $46 million for the six months ended June 30, 2020.

In Millions
Six Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,126		$	1,143		$	—		$	—		$	3,269
Other		—			—			35			—			35
Revenue recognized from contracts with customers		$	2,126		$	1,143		$	35		$	—		$	3,304
Leasing income		—			—			90			—			90
Financing income		4			4			—			102			110
Total operating revenue – CMS Energy		$	2,130		$	1,147		$	125		$	102		$	3,504
Consumers
Consumers utility revenue
Residential		$	946		$	787								$	1,733
Commercial		713			232									945
Industrial		336			33									369
Other		131			91									222
Revenue recognized from contracts with customers		$	2,126		$	1,143								$	3,269
Financing income		4			4									8
Total operating revenue – Consumers		$	2,130		$	1,147								$	3,277

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $63 million for the six months ended June 30, 2019.

Electric and Gas Utilities

Consumers Utility Revenue: Consumers recognizes revenue primarily from the sale of electric and gas utility services at tariff‑based rates regulated by the MPSC. Consumers’ customer base consists of a mix of residential, commercial, and diversified industrial customers. Consumers’ tariff‑based sales performance obligations are described below.

• Consumers has performance obligations for the service of standing ready to deliver electricity or natural gas to customers, and it satisfies these performance obligations over time. Consumers recognizes revenue at a fixed rate as it provides these services. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of Consumers’ service to stand ready to deliver.

• Consumers has performance obligations for the service of delivering the commodity of electricity or natural gas to customers, and it satisfies these performance obligations upon delivery. Consumers recognizes revenue at a price per unit of electricity or natural gas delivered, based on the tariffs established by the MPSC. These arrangements generally do not have fixed terms and remain in effect as long as the customer consumes the utility service. The rates are set by the MPSC through the rate‑making process and represent the stand‑alone selling price of a bundled

product comprising the commodity, electricity or natural gas, and the service of delivering such commodity.

In some instances, Consumers has specific fixed‑term contracts with large commercial and industrial customers to provide electricity or gas at certain tariff rates or to provide gas transportation services at contracted rates. The amount of electricity and gas to be delivered under these contracts and the associated future revenue to be received are generally dependent on the customers’ needs. Accordingly, Consumers recognizes revenues at the tariff or contracted rate as electricity or gas is delivered to the customer. Consumers also has other miscellaneous contracts with customers related to pole and other property rentals, appliance service plans, and utility contract work. Generally, these contracts are short term or evergreen in nature.

Accounts Receivable and Unbilled Revenues: Accounts receivable comprise trade receivables and unbilled receivables. CMS Energy and Consumers record their accounts receivable at cost, less an allowance for uncollectible accounts. The allowance is increased for uncollectible accounts expense and decreased for account write-offs net of recoveries. CMS Energy and Consumers establish the allowance based on historical losses, management’s assessment of existing economic conditions, customer payment trends, and reasonable and supported forecast information. CMS Energy and Consumers assess late payment fees on trade receivables based on contractual past‑due terms established with customers. Accounts are written off when deemed uncollectible, which is generally when they become six months past due.

CMS Energy and Consumers recorded uncollectible accounts expense of $8 million for the three months ended June 30, 2020 and $6 million for the three months ended June 30, 2019. CMS Energy and Consumers recorded uncollectible accounts expense of $13 million for the six months ended June 30, 2020 and $12 million for the six months ended June 30, 2019. At June 30, 2020, Consumers deferred $9 million of incremental uncollectible accounts expense as a non‑current regulatory asset. For additional information see Note 2, Regulatory Matters.

Consumers’ customers are billed monthly in cycles having billing dates that do not generally coincide with the end of a calendar month. This results in customers having received electricity or natural gas that they have not been billed for as of the month‑end. Consumers estimates its unbilled revenues by applying an average billed rate to total unbilled deliveries for each customer class. Unbilled revenues, which are recorded as accounts receivable on CMS Energy’s and Consumers’ consolidated balance sheets, were $326 million at June 30, 2020 and $426 million at December 31, 2019.

Alternative‑Revenue Programs: The energy waste reduction incentive mechanism provides a financial incentive if the energy savings of Consumers’ customers exceed annual targets established by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing revenue related to the incentive as soon as energy savings exceed the annual targets established by the MPSC.

Under a gas revenue decoupling mechanism authorized by the MPSC, Consumers is allowed to adjust future gas rates for differences between Consumers’ actual weather-normalized, non‑fuel revenues and the revenues approved by the MPSC. Consumers accounts for this program as an alternative-revenue program that meets the criteria for recognizing the effects of decoupling adjustments on revenue as gas is delivered.

Consumers does not reclassify revenue from its alternative-revenue program to revenue from contracts with customers at the time the amounts are collected from customers.

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Cash and Cash Equivalents

6 Months Ended

Jun. 30, 2020

Cash and Cash Equivalents [Line Items]

Cash and Cash Equivalents

Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Cash and cash equivalents, including restricted amounts		$	1,604		$	157
Consumers
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Cash and cash equivalents, including restricted amounts		$	1,229		$	28

Cash and Cash Equivalents: Cash and cash equivalents include short‑term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

Consumers Energy Company

Cash and Cash Equivalents [Line Items]

Cash and Cash Equivalents

Cash and Cash Equivalents

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Cash and cash equivalents, including restricted amounts		$	1,604		$	157
Consumers
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Cash and cash equivalents, including restricted amounts		$	1,229		$	28

Cash and Cash Equivalents: Cash and cash equivalents include short‑term, highly liquid investments with original maturities of three months or less.

Restricted Cash and Cash Equivalents: Restricted cash and cash equivalents are held primarily for the repayment of securitization bonds and funds held in escrow. Cash and cash equivalents may also be restricted to pay other contractual obligations such as leasing of coal railcars. These amounts are classified as current assets since they relate to payments that could or will occur within one year.

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Reportable Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting Information [Line Items]

Reportable Segments

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 segments reported for CMS Energy are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

• enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

• EnerBank, a Utah state-chartered, FDIC-insured industrial bank providing primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements

CMS Energy presents corporate interest and other expenses and Consumers’ other consolidated entities within other reconciling items.

Consumers

The segments reported for Consumers are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

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

Presented in the following tables is financial information by segment:

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Enterprises		52				58				110				125
EnerBank		61				53				123				102
Total operating revenue – CMS Energy		$	1,443			$	1,445			$	3,307			$	3,504
Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Total operating revenue – Consumers		$	1,330			$	1,334			$	3,074			$	3,277
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Enterprises¹		1				16				21				23
EnerBank¹		8				10				22				21
Other reconciling items¹		(33		)		(31		)		(59		)		(62		)
Total net income available to common stockholders – CMS Energy		$	136			$	93			$	379			$	306
Consumers
Net income (loss) available to common stockholder
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Other reconciling items		(1		)		(1		)		(1		)		(1		)
Total net income available to common stockholder – Consumers		$	159			$	97			$	394			$	323

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Enterprises		408			405
EnerBank		35			22
Other reconciling items		20			20
Total plant, property, and equipment, gross – CMS Energy		$	25,911		$	25,390
Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Other reconciling items		20			20
Total plant, property, and equipment, gross – Consumers		$	25,468		$	24,963
CMS Energy, including Consumers
Total assets
Electric utility¹		$	15,925		$	14,911
Gas utility¹		9,006			8,659
Enterprises		542			527
EnerBank		2,799			2,692
Other reconciling items		309			48
Total assets – CMS Energy		$	28,581		$	26,837
Consumers
Total assets
Electric utility¹		$	15,987		$	14,973
Gas utility¹		9,052			8,706
Other reconciling items		21			20
Total assets – Consumers		$	25,060		$	23,699

¹ 

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

Consumers Energy Company

Segment Reporting Information [Line Items]

Reportable Segments

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 segments reported for CMS Energy are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

• enterprises, consisting of various subsidiaries engaging in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production

• EnerBank, a Utah state-chartered, FDIC-insured industrial bank providing primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements

CMS Energy presents corporate interest and other expenses and Consumers’ other consolidated entities within other reconciling items.

Consumers

The segments reported for Consumers are:

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

• gas utility, consisting of regulated activities associated with the purchase, transmission, storage, distribution, and sale of natural gas in Michigan

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

Presented in the following tables is financial information by segment:

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Enterprises		52				58				110				125
EnerBank		61				53				123				102
Total operating revenue – CMS Energy		$	1,443			$	1,445			$	3,307			$	3,504
Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Total operating revenue – Consumers		$	1,330			$	1,334			$	3,074			$	3,277
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Enterprises¹		1				16				21				23
EnerBank¹		8				10				22				21
Other reconciling items¹		(33		)		(31		)		(59		)		(62		)
Total net income available to common stockholders – CMS Energy		$	136			$	93			$	379			$	306
Consumers
Net income (loss) available to common stockholder
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Other reconciling items		(1		)		(1		)		(1		)		(1		)
Total net income available to common stockholder – Consumers		$	159			$	97			$	394			$	323

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Enterprises		408			405
EnerBank		35			22
Other reconciling items		20			20
Total plant, property, and equipment, gross – CMS Energy		$	25,911		$	25,390
Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Other reconciling items		20			20
Total plant, property, and equipment, gross – Consumers		$	25,468		$	24,963
CMS Energy, including Consumers
Total assets
Electric utility¹		$	15,925		$	14,911
Gas utility¹		9,006			8,659
Enterprises		542			527
EnerBank		2,799			2,692
Other reconciling items		309			48
Total assets – CMS Energy		$	28,581		$	26,837
Consumers
Total assets
Electric utility¹		$	15,987		$	14,973
Gas utility¹		9,052			8,706
Other reconciling items		21			20
Total assets – Consumers		$	25,060		$	23,699

¹ 

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

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Exit Activities

6 Months Ended

Jun. 30, 2020

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Exit Activities

Exit Activities

Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn 1 & 2 coal-fueled generating units in 2023. In October 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. Consumers is seeking recovery of these costs from customers in its 2020 electric rate case.

As of June 30, 2020, the cumulative cost incurred and charged to expense related to this program was $11 million; an amount of $1 million has been capitalized as a cost of plant, property, and equipment. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
June 30, 2020	Six Months Ended
Retention benefit liability at beginning of period		$	4
Costs incurred and charged to maintenance and other operating expenses¹		7
Costs incurred and capitalized		1
Retention benefit liability at the end of the period²		$	12

¹  Includes $3 million for the three months ended June 30, 2020.

² 

Includes current portion of other liabilities of $5 million.

Consumers Energy Company

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Exit Activities

Exit Activities

Under its Clean Energy Plan, Consumers plans to retire the D.E. Karn 1 & 2 coal-fueled generating units in 2023. In October 2019, Consumers announced a retention incentive program to ensure necessary staffing at the D.E. Karn generating complex through the anticipated retirement of the coal-fueled generating units. Based on the number of employees that have chosen to participate, the aggregate cost of the program through 2023 is estimated to be $35 million. Consumers is seeking recovery of these costs from customers in its 2020 electric rate case.

As of June 30, 2020, the cumulative cost incurred and charged to expense related to this program was $11 million; an amount of $1 million has been capitalized as a cost of plant, property, and equipment. Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
June 30, 2020	Six Months Ended
Retention benefit liability at beginning of period		$	4
Costs incurred and charged to maintenance and other operating expenses¹		7
Costs incurred and capitalized		1
Retention benefit liability at the end of the period²		$	12

¹  Includes $3 million for the three months ended June 30, 2020.

² 

Includes current portion of other liabilities of $5 million.

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New Accounting Standards (Policies)

6 Months Ended

Jun. 30, 2020

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New accounting standards

Implementation of New Accounting Standards

ASU 2016‑13, Measurement of Credit Losses on Financial Instruments: This standard, which was effective on January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments. The standard applies to financial assets that are not measured at fair value through net income as well as to certain off‑balance-sheet credit exposures. CMS Energy and Consumers were required to apply the standard using a modified retrospective approach, under which the initial impacts of the standard are recorded through a cumulative‑effect adjustment to beginning retained earnings on the effective date.

The standard required an increase to the allowance for loan losses at EnerBank. Prior to the standard, the allowance reflected expected credit losses over a 12‑month period, but the new guidance requires the allowance to reflect expected credit losses over the entire life of the loans. As a result, CMS Energy recorded a $65 million increase to its expected credit loss reserves on January 1, 2020, with the offsetting adjustment recorded to retained earnings, net of taxes of $14 million. The standard also requires an increase in the initial provision for loan losses recognized in net income for new loans originated in 2020 and beyond. The adoption of this standard resulted in a $9 million reduction to CMS Energy’s income before income taxes for the six months ended June 30, 2020. For further information on EnerBank’s loans and the related allowance for loan losses, see Note 7, Notes Receivable. At Consumers, the standard applies to the allowance for uncollectible accounts, but did not result in any significant changes to the allowance methodology and did not have a material impact on Consumers’ consolidated financial statements.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting: This standard, which was effective as of March 12, 2020 for CMS Energy and Consumers, provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain

contracts to replace LIBOR with a new reference rate. The guidance, if elected, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. The guidance will also facilitate the continuation of hedge accounting for derivatives that may have to be modified to incorporate a new rate. The guidance is effective through December 31, 2022. CMS Energy and Consumers presently have various contracts that reference LIBOR and they are assessing how this standard may be applied to specific contract modifications.

Allowance for loan losses

The allowance for loan losses at June 30, 2020 reflects expected credit losses over the entire lifetime of the loan portfolio. EnerBank estimates the allowance by using the “weighted-average remaining maturity” methodology for their term loans, and the “probability of default and loss given default” methodology for their same-as-cash loans. These methodologies consider historical loan loss experience, prepayment expectations, and credit quality indicators. EnerBank considers current and projected economic conditions, and other reasonable and supportable forecast information to determine if adjustments to the allowance are necessary. The allowance is increased by the provision for loan losses and decreased by loan charge‑offs net of recoveries. 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.

Consumers Energy Company

New Accounting Pronouncements or Change in Accounting Principle [Line Items]

New accounting standards

Implementation of New Accounting Standards

ASU 2016‑13, Measurement of Credit Losses on Financial Instruments: This standard, which was effective on January 1, 2020 for CMS Energy and Consumers, provides new guidance for measuring and recognizing credit losses on financial instruments. The standard applies to financial assets that are not measured at fair value through net income as well as to certain off‑balance-sheet credit exposures. CMS Energy and Consumers were required to apply the standard using a modified retrospective approach, under which the initial impacts of the standard are recorded through a cumulative‑effect adjustment to beginning retained earnings on the effective date.

The standard required an increase to the allowance for loan losses at EnerBank. Prior to the standard, the allowance reflected expected credit losses over a 12‑month period, but the new guidance requires the allowance to reflect expected credit losses over the entire life of the loans. As a result, CMS Energy recorded a $65 million increase to its expected credit loss reserves on January 1, 2020, with the offsetting adjustment recorded to retained earnings, net of taxes of $14 million. The standard also requires an increase in the initial provision for loan losses recognized in net income for new loans originated in 2020 and beyond. The adoption of this standard resulted in a $9 million reduction to CMS Energy’s income before income taxes for the six months ended June 30, 2020. For further information on EnerBank’s loans and the related allowance for loan losses, see Note 7, Notes Receivable. At Consumers, the standard applies to the allowance for uncollectible accounts, but did not result in any significant changes to the allowance methodology and did not have a material impact on Consumers’ consolidated financial statements.

ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting: This standard, which was effective as of March 12, 2020 for CMS Energy and Consumers, provides optional guidance intended to ease the potential burden in accounting for the expected discontinuation of LIBOR as a reference rate in the financial markets. The guidance can be applied to modifications made to certain

contracts to replace LIBOR with a new reference rate. The guidance, if elected, will permit entities to treat such modifications as the continuation of the original contract, without any required accounting reassessments or remeasurements. The guidance will also facilitate the continuation of hedge accounting for derivatives that may have to be modified to incorporate a new rate. The guidance is effective through December 31, 2022. CMS Energy and Consumers presently have various contracts that reference LIBOR and they are assessing how this standard may be applied to specific contract modifications.

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Contingencies And Commitments (Tables)

6 Months Ended

Jun. 30, 2020

Site Contingency [Line Items]

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at June 30, 2020:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from stock and asset sale agreements¹	various	indefinite		$	153		$	2
Guarantee²	July 2011	indefinite		30			—
Consumers
Guarantee²	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. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

² 

This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Consumers Energy Company

Site Contingency [Line Items]

Guarantees

Presented in the following table are CMS Energy’s and Consumers’ guarantees at June 30, 2020:

In Millions
Guarantee Description	Issue Date	Expiration Date	Maximum Obligation			Carrying Amount
CMS Energy, including Consumers
Indemnity obligations from stock and asset sale agreements¹	various	indefinite		$	153		$	2
Guarantee²	July 2011	indefinite		30			—
Consumers
Guarantee²	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. The maximum obligation amount is mostly related to the Equatorial Guinea tax claim discussed in the CMS Energy Contingencies section of this Note. CMS Energy believes the likelihood of material loss to be remote for the indemnity obligations not recorded as liabilities.

²  This obligation comprises a guarantee provided by Consumers to the U.S. Department of Energy in connection with a settlement agreement regarding damages resulting from the department’s failure to accept spent nuclear fuel from nuclear power plants formerly owned by Consumers.

Bay Harbor

Site Contingency [Line Items]

Expected Remediation Costs By Year

. CMS Energy expects to pay the following amounts for long‑term leachate disposal and operating and maintenance costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
CMS Energy
Long‑term leachate disposal and operating and maintenance costs		$	3		$	4		$	4		$	4		$	4		$	4

Gas Utility | Manufactured Gas Plant | Consumers Energy Company

Site Contingency [Line Items]

Expected Remediation Costs By Year

. Consumers expects to pay the following amounts for remediation and other response activity costs during the remainder of 2020 and in each of the next five years:

In Millions
	2020			2021			2022			2023			2024			2025
Consumers
Remediation and other response activity costs		$	7		$	8		$	20		$	11		$	2		$	2

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Financings and Capitalization (Tables)

6 Months Ended

Jun. 30, 2020

Debt Instrument [Line Items]

Major Long-Term Debt Transactions

Presented in the following table is a summary of major long‑term debt issuances during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Junior subordinated notes²		500		4.750	%	May	June 2050
Total CMS Energy, parent only		$	800
Consumers
Term loan facility³		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds4		134		variable		May	May 2070
Total Consumers		$	1,534
Total CMS Energy		$	2,334

¹  At June 30, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

³  At June 30, 2020, the interest rate on the balance of this term loan facility was 0.556 percent, based on an interest rate of one‑week LIBOR plus 0.450 percent.

⁴  The variable rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent (0.077 percent at June 30, 2020).

Presented in the following table is a summary of major long‑term debt retirements during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
Total Consumers		$	350
Total CMS Energy		$	350

Revolving Credit Facilities

The following revolving credit facilities with banks were available at June 30, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023		$	550		$	—		$	5		$	545
CMS Enterprises, including subsidiaries
September 30, 2025¹		$	18		$	—		$	8		$	10
Consumers²
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			1			249
April 18, 2022		30			—			30			—

¹  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

²  Obligations under these facilities are secured by first mortgage bonds of Consumers.

Schedule of Forward Contracts Indexed to Issuer's Equity

Presented in the following table are details of these contracts:

			Forward Price Per Share
Contract Date	Maturity Date	Number of Shares	Initial			June 30, 2020
November 20, 2018	March 31, 2021	777,899		$	50.91		$	49.32
February 21, 2019	March 31, 2021	2,083,340		52.27			50.88

Consumers Energy Company

Debt Instrument [Line Items]

Major Long-Term Debt Transactions

Presented in the following table is a summary of major long‑term debt issuances during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Issuance Date	Maturity Date
CMS Energy, parent only
Term loan facility¹		$	300	variable		February	February 2021
Junior subordinated notes²		500		4.750	%	May	June 2050
Total CMS Energy, parent only		$	800
Consumers
Term loan facility³		$	300	variable		January	January 2021
First mortgage bonds		575		3.500	%	March	August 2051
First mortgage bonds		525		2.500	%	May	May 2060
First mortgage bonds4		134		variable		May	May 2070
Total Consumers		$	1,534
Total CMS Energy		$	2,334

¹  At June 30, 2020, the interest rate on the balance of this term loan facility was 1.572 percent, based on an interest rate of six‑month LIBOR plus 0.500 percent.

²  These unsecured obligations rank subordinate and junior in right of payment to all of CMS Energy’s existing and future senior indebtedness. On June 1, 2030, and every five years thereafter, the notes will reset to an interest rate equal to the five-year treasury rate plus 4.116 percent.

³  At June 30, 2020, the interest rate on the balance of this term loan facility was 0.556 percent, based on an interest rate of one‑week LIBOR plus 0.450 percent.

⁴  The variable rate bonds bear interest quarterly at a rate of three-month LIBOR minus 0.300 percent (0.077 percent at June 30, 2020).

Presented in the following table is a summary of major long‑term debt retirements during the six months ended June 30, 2020:

	Principal (In Millions)			Interest Rate		Retirement Date	Maturity Date
Consumers
First mortgage bonds		$	100	3.770	%	April	October 2020
First mortgage bonds		250		5.300	%	June	September 2022
Total Consumers		$	350
Total CMS Energy		$	350

Revolving Credit Facilities

The following revolving credit facilities with banks were available at June 30, 2020:

In Millions
Expiration Date	Amount of Facility			Amount Borrowed			Letters of Credit Outstanding			Amount Available
CMS Energy, parent only
June 5, 2023		$	550		$	—		$	5		$	545
CMS Enterprises, including subsidiaries
September 30, 2025¹		$	18		$	—		$	8		$	10
Consumers²
June 5, 2023		$	850		$	—		$	7		$	843
November 19, 2021		250			—			1			249
April 18, 2022		30			—			30			—

¹  Under this facility, $8 million is available solely for the purpose of issuing letters of credit. Obligations under this facility are secured by the collateral accounts with the lending bank.

²  Obligations under these facilities are secured by first mortgage bonds of Consumers.

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

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
	June 30 2020			December 31 2019			June 30 2020			December 31 2019
Assets¹
Cash equivalents		$	100		$	—		$	100		$	—
Restricted cash and cash equivalents		17			17			14			17
CMS Energy common stock		—			—			1			1
Nonqualified deferred compensation plan assets		19			18			15			14
Derivative instruments		3			1			3			1
Total		$	139		$	36		$	133		$	33
Liabilities¹
Nonqualified deferred compensation plan liabilities		$	19		$	18		$	15		$	14
Derivative instruments		21			8			1			—
Total		$	40		$	26		$	16		$	14

¹  All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

Consumers Energy Company

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

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
	June 30 2020			December 31 2019			June 30 2020			December 31 2019
Assets¹
Cash equivalents		$	100		$	—		$	100		$	—
Restricted cash and cash equivalents		17			17			14			17
CMS Energy common stock		—			—			1			1
Nonqualified deferred compensation plan assets		19			18			15			14
Derivative instruments		3			1			3			1
Total		$	139		$	36		$	133		$	33
Liabilities¹
Nonqualified deferred compensation plan liabilities		$	19		$	18		$	15		$	14
Derivative instruments		21			8			1			—
Total		$	40		$	26		$	16		$	14

¹  All assets and liabilities were classified as Level 1 with the exception of derivative contracts, which were classified as Level 2 or Level 3.

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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Schedule Of Carrying Amounts And Fair Values Of 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 excludes cash, cash equivalents, short‑term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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
	June 30, 2020															December 31, 2019
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable2		2,597			2,896			—			—			2,896			2,500			2,652			—			—			2,652
Securities held to maturity		29			29			—			29			—			26			26			—			26			—
Liabilities
Long-term debt3		15,139			17,154			1,150			14,290			1,714			13,062			14,185			1,197			11,048			1,940
Long-term payables4		31			32			—			—			32			30			32			—			—			32
Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable – related party5		103			103			—			—			103			103			103			—			—			103
Liabilities
Long-term debt6		8,404			9,912			—			8,198			1,714			7,250			8,010			—			6,070			1,940

¹  Includes current portion of long-term accounts receivable of $12 million at June 30, 2020 and $13 million at December 31, 2019.

²  Includes current portion of notes receivable of $264 million at June 30, 2020 and $242 million at December 31, 2019. For further details, see Note 7, Notes Receivable.

³  Includes current portion of long‑term debt of $1.7 billion at June 30, 2020 and $1.1 billion at December 31, 2019.

⁴  Includes current portion of long‑term payables of $6 million at June 30, 2020 and $1 million at December 31, 2019.

⁵  Includes current portion of notes receivable – related party of $7 million at June 30, 2020 and December 31, 2019. For further details, see Note 7, Notes Receivable.

⁶ 

Includes current portion of long‑term debt of $537 million at June 30, 2020 and $202 million at December 31, 2019.

Schedule Of Investment Securities

Presented in the following table are these investment securities:

In Millions
	June 30, 2020												December 31, 2019
	Cost			Unrealized Gains			Unrealized Losses			Fair Value			Cost			Unrealized Gains			Unrealized Losses			Fair Value
CMS Energy
Debt securities		$	29		$	—		$	—		$	29		$	26		$	—		$	—		$	26

Consumers Energy Company

Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]

Schedule Of Carrying Amounts And Fair Values Of 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 excludes cash, cash equivalents, short‑term financial instruments, and trade accounts receivable and payable whose carrying amounts approximate their fair values. 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
	June 30, 2020															December 31, 2019
				Fair Value															Fair Value
	Carrying						Level									Carrying						Level
	Amount			Total			1			2			3			Amount			Total			1			2			3
CMS Energy, including Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable2		2,597			2,896			—			—			2,896			2,500			2,652			—			—			2,652
Securities held to maturity		29			29			—			29			—			26			26			—			26			—
Liabilities
Long-term debt3		15,139			17,154			1,150			14,290			1,714			13,062			14,185			1,197			11,048			1,940
Long-term payables4		31			32			—			—			32			30			32			—			—			32
Consumers
Assets
Long-term receivables1		$	19		$	19		$	—		$	—		$	19		$	20		$	20		$	—		$	—		$	20
Notes receivable – related party5		103			103			—			—			103			103			103			—			—			103
Liabilities
Long-term debt6		8,404			9,912			—			8,198			1,714			7,250			8,010			—			6,070			1,940

¹  Includes current portion of long-term accounts receivable of $12 million at June 30, 2020 and $13 million at December 31, 2019.

²  Includes current portion of notes receivable of $264 million at June 30, 2020 and $242 million at December 31, 2019. For further details, see Note 7, Notes Receivable.

³  Includes current portion of long‑term debt of $1.7 billion at June 30, 2020 and $1.1 billion at December 31, 2019.

⁴  Includes current portion of long‑term payables of $6 million at June 30, 2020 and $1 million at December 31, 2019.

⁵  Includes current portion of notes receivable – related party of $7 million at June 30, 2020 and December 31, 2019. For further details, see Note 7, Notes Receivable.

⁶ 

Includes current portion of long‑term debt of $537 million at June 30, 2020 and $202 million at December 31, 2019.

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Notes Receivable (Tables)

6 Months Ended

Jun. 30, 2020

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule Of Current And Non-Current Notes Receivable

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

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	264		$	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses		2,333			2,258
Total notes receivable		$	2,597		$	2,500
Consumers
Current
DB SERP note receivable – related party		$	7		$	7
Non‑current
DB SERP note receivable – related party		96			96
Total notes receivable		$	103		$	103

Financing Receivable, Allowance for Credit Loss

Presented in the following table are the changes in the allowance for loan losses:

In Millions
June 30, 2020	Three Months Ended				Six Months Ended
Balance at beginning of period		$	99			$	33
Effects of new accounting standard¹		—				62
Provisions for loan losses		13				26
Charge-offs		(9		)		(20		)
Recoveries		1				3
Balance at end of period		$	104			$	104

¹ 

The allowance for loan losses at December 31, 2019 reflected expected credit losses over a 12-month period. On January 1, 2020, in accordance with ASU 2016-13, Measurement of Credit Losses on Financial Instruments, the allowance for loan losses was adjusted to reflect expected credit losses over the life of the loan. Additionally, EnerBank recorded $3 million for expected credit losses related to unfunded loan commitments. For further details, see Note 1, New Accounting Standards.

Consumers Energy Company

Accounts, Notes, Loans and Financing Receivable [Line Items]

Schedule Of Current And Non-Current Notes Receivable

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

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Current
EnerBank notes receivable, net of allowance for loan losses		$	264		$	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses		2,333			2,258
Total notes receivable		$	2,597		$	2,500
Consumers
Current
DB SERP note receivable – related party		$	7		$	7
Non‑current
DB SERP note receivable – related party		96			96
Total notes receivable		$	103		$	103

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Retirement Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Defined Benefit Plan Disclosure [Line Items]

Schedule Of Net Benefit Costs

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 Plans																OPEB Plan
	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	13			$	10			$	25			$	20			$	4			$	3			$	8			$	7
Interest cost		20				24				41				49				9				10				17				20
Expected return on plan assets		(48		)		(41		)		(96		)		(81		)		(25		)		(22		)		(50		)		(44		)
Amortization of:
Net loss		22				12				44				24				3				6				7				13
Prior service cost (credit)		1				1				1				1				(14		)		(15		)		(28		)		(31		)
Net periodic cost (credit)		$	8			$	6			$	15			$	13			$	(23	)		$	(18	)		$	(46	)		$	(35	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	24			$	20			$	4			$	4			$	8			$	7
Interest cost		19				23				39				46				8				10				16				20
Expected return on plan assets		(46		)		(38		)		(91		)		(76		)		(24		)		(20		)		(47		)		(41		)
Amortization of:
Net loss		21				11				42				23				3				6				7				13
Prior service cost (credit)		1				1				1				1				(13		)		(16		)		(27		)		(31		)
Net periodic cost (credit)		$	7			$	7			$	15			$	14			$	(22	)		$	(16	)		$	(43	)		$	(32	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Schedule Of Net Benefit Costs

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 Plans																OPEB Plan
	Three Months Ended								Six Months Ended								Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	13			$	10			$	25			$	20			$	4			$	3			$	8			$	7
Interest cost		20				24				41				49				9				10				17				20
Expected return on plan assets		(48		)		(41		)		(96		)		(81		)		(25		)		(22		)		(50		)		(44		)
Amortization of:
Net loss		22				12				44				24				3				6				7				13
Prior service cost (credit)		1				1				1				1				(14		)		(15		)		(28		)		(31		)
Net periodic cost (credit)		$	8			$	6			$	15			$	13			$	(23	)		$	(18	)		$	(46	)		$	(35	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	24			$	20			$	4			$	4			$	8			$	7
Interest cost		19				23				39				46				8				10				16				20
Expected return on plan assets		(46		)		(38		)		(91		)		(76		)		(24		)		(20		)		(47		)		(41		)
Amortization of:
Net loss		21				11				42				23				3				6				7				13
Prior service cost (credit)		1				1				1				1				(13		)		(16		)		(27		)		(31		)
Net periodic cost (credit)		$	7			$	7			$	15			$	14			$	(22	)		$	(16	)		$	(43	)		$	(32	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2020

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

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:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

Consumers Energy Company

Income Taxes [Line Items]

Schedule Of Effective Income Tax Rate Reconciliation

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:

Six Months Ended June 30	2020		2019
CMS Energy, including Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	4.6		5.4
TCJA excess deferred taxes¹	(4.0	)	(3.5	)
Production tax credits	(2.8	)	(2.5	)
Research and development tax credits, net²	(2.2	)	(0.2	)
Alternative minimum tax sequestration³	(2.1	)	—
Accelerated flow-through of regulatory tax benefits4	(1.5	)	(1.5	)
Other, net	(0.6	)	(0.6	)
Effective tax rate	12.4	%	18.1	%
Consumers
U.S. federal income tax rate	21.0	%	21.0	%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect	5.0		5.7
TCJA excess deferred taxes¹	(3.6	)	(3.2	)
Research and development tax credits, net²	(1.9	)	(0.2	)
Production tax credits	(1.6	)	(1.3	)
Accelerated flow-through of regulatory tax benefits4	(1.6	)	(1.8	)
Other, net	(0.5	)	(0.4	)
Effective tax rate	16.8	%	19.8	%

¹  In December 2017, Consumers remeasured its deferred tax assets and liabilities at the new federal tax rate enacted by the TCJA and recorded a net $1.6 billion regulatory liability. As a result of an order received in September 2019, Consumers began refunding these excess deferred taxes to customers.

²  In March 2020, CMS Energy finalized a study of research and development tax credits for tax years 2012 through 2018. As a result, for the six months ended June 30, 2020, CMS Energy, including Consumers, recognized a $9 million increase in the credit, net of reserves for uncertain tax positions. Of this amount, $8 million was recognized at Consumers.

³  In January 2020, the IRS issued a decision restoring alternative minimum tax credit refunds sequestered in years prior to 2018. As a result, for the six months ended June 30, 2020, CMS Energy recognized a $9 million income tax benefit for sequestered amounts related to its 2017 tax return. CMS Energy received the refund in April 2020.

⁴ 

In 2013, the MPSC issued an order authorizing Consumers to accelerate the flow‑through to electric and gas customers of certain income tax benefits associated primarily with the cost of removal of plant placed in service before 1993. Consumers implemented this regulatory treatment beginning in 2014, with the electric portion ending in 2018 and the gas portion continuing through 2025. This change, which also accelerates Consumers’ recognition of the income tax benefits, reduced Consumers’ income tax expense by $7 million for the six months ended June 30, 2020 and by $7 million for the six months ended June 30, 2019.

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Earnings Per Share - CMS Energy (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Basic and Diluted EPS Computations

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						Six Months Ended
June 30	2020			2019			2020			2019
Income available to common stockholders
Net income		$	137		$	94		$	380		$	307
Less income attributable to noncontrolling interests		1			1			1			1
Net income available to common stockholders – basic and diluted		$	136		$	93		$	379		$	306
Average common shares outstanding
Weighted-average shares – basic		285.5			282.9			284.4			282.9
Add dilutive nonvested stock awards		0.6			0.6			0.7			0.6
Add dilutive forward equity sale contracts		0.4			0.5			0.7			0.3
Weighted-average shares – diluted		286.5			284.0			285.8			283.8
Net income per average common share available to common stockholders
Basic		$	0.48		$	0.33		$	1.33		$	1.08
Diluted		0.48			0.33			1.33			1.08

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Revenue (Tables)

6 Months Ended

Jun. 30, 2020

Revenue, Initial Application Period Cumulative Effect Transition [Line Items]

Components Of Operating Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Three Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,020		$	306		$	—		$	—		$	1,326
Other		—			—			17			—			17
Revenue recognized from contracts with customers		$	1,020		$	306		$	17		$	—		$	1,343
Leasing income		—			—			35			—			35
Financing income		2			2			—			61			65
Total operating revenue – CMS Energy		$	1,022		$	308		$	52		$	61		$	1,443
Consumers
Consumers utility revenue
Residential		$	507		$	206								$	713
Commercial		341			51									392
Industrial		126			7									133
Other		46			42									88
Revenue recognized from contracts with customers		$	1,020		$	306								$	1,326
Financing income		2			2									4
Total operating revenue – Consumers		$	1,022		$	308								$	1,330

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $21 million for the three months ended June 30, 2020.

In Millions
Three Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,026		$	305		$	—		$	—		$	1,331
Other		—			—			16			—			16
Revenue recognized from contracts with customers		$	1,026		$	305		$	16		$	—		$	1,347
Leasing income		—			—			42			—			42
Financing income		1			2			—			53			56
Total operating revenue – CMS Energy		$	1,027		$	307		$	58		$	53		$	1,445
Consumers
Consumers utility revenue
Residential		$	423		$	198								$	621
Commercial		362			58									420
Industrial		174			8									182
Other		67			41									108
Revenue recognized from contracts with customers		$	1,026		$	305								$	1,331
Financing income		1			2									3
Total operating revenue – Consumers		$	1,027		$	307								$	1,334

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $29 million for the three months ended June 30, 2019.

In Millions
Six Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,045		$	1,020		$	—		$	—		$	3,065
Other		—			—			36			—			36
Revenue recognized from contracts with customers		$	2,045		$	1,020		$	36		$	—		$	3,101
Leasing income		—			—			74			—			74
Financing income		5			4			—			123			132
Total operating revenue – CMS Energy		$	2,050		$	1,024		$	110		$	123		$	3,307
Consumers
Consumers utility revenue
Residential		$	988		$	699								$	1,687
Commercial		680			200									880
Industrial		266			27									293
Other		111			94									205
Revenue recognized from contracts with customers		$	2,045		$	1,020								$	3,065
Financing income		5			4									9
Total operating revenue – Consumers		$	2,050		$	1,024								$	3,074

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $46 million for the six months ended June 30, 2020.

In Millions
Six Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,126		$	1,143		$	—		$	—		$	3,269
Other		—			—			35			—			35
Revenue recognized from contracts with customers		$	2,126		$	1,143		$	35		$	—		$	3,304
Leasing income		—			—			90			—			90
Financing income		4			4			—			102			110
Total operating revenue – CMS Energy		$	2,130		$	1,147		$	125		$	102		$	3,504
Consumers
Consumers utility revenue
Residential		$	946		$	787								$	1,733
Commercial		713			232									945
Industrial		336			33									369
Other		131			91									222
Revenue recognized from contracts with customers		$	2,126		$	1,143								$	3,269
Financing income		4			4									8
Total operating revenue – Consumers		$	2,130		$	1,147								$	3,277

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $63 million for the six months ended June 30, 2019.

Consumers Energy Company

Revenue, Initial Application Period Cumulative Effect Transition [Line Items]

Components Of Operating Revenue

Presented in the following tables are the components of operating revenue:

In Millions
Three Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,020		$	306		$	—		$	—		$	1,326
Other		—			—			17			—			17
Revenue recognized from contracts with customers		$	1,020		$	306		$	17		$	—		$	1,343
Leasing income		—			—			35			—			35
Financing income		2			2			—			61			65
Total operating revenue – CMS Energy		$	1,022		$	308		$	52		$	61		$	1,443
Consumers
Consumers utility revenue
Residential		$	507		$	206								$	713
Commercial		341			51									392
Industrial		126			7									133
Other		46			42									88
Revenue recognized from contracts with customers		$	1,020		$	306								$	1,326
Financing income		2			2									4
Total operating revenue – Consumers		$	1,022		$	308								$	1,330

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $21 million for the three months ended June 30, 2020.

In Millions
Three Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	1,026		$	305		$	—		$	—		$	1,331
Other		—			—			16			—			16
Revenue recognized from contracts with customers		$	1,026		$	305		$	16		$	—		$	1,347
Leasing income		—			—			42			—			42
Financing income		1			2			—			53			56
Total operating revenue – CMS Energy		$	1,027		$	307		$	58		$	53		$	1,445
Consumers
Consumers utility revenue
Residential		$	423		$	198								$	621
Commercial		362			58									420
Industrial		174			8									182
Other		67			41									108
Revenue recognized from contracts with customers		$	1,026		$	305								$	1,331
Financing income		1			2									3
Total operating revenue – Consumers		$	1,027		$	307								$	1,334

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $29 million for the three months ended June 30, 2019.

In Millions
Six Months Ended June 30, 2020	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,045		$	1,020		$	—		$	—		$	3,065
Other		—			—			36			—			36
Revenue recognized from contracts with customers		$	2,045		$	1,020		$	36		$	—		$	3,101
Leasing income		—			—			74			—			74
Financing income		5			4			—			123			132
Total operating revenue – CMS Energy		$	2,050		$	1,024		$	110		$	123		$	3,307
Consumers
Consumers utility revenue
Residential		$	988		$	699								$	1,687
Commercial		680			200									880
Industrial		266			27									293
Other		111			94									205
Revenue recognized from contracts with customers		$	2,045		$	1,020								$	3,065
Financing income		5			4									9
Total operating revenue – Consumers		$	2,050		$	1,024								$	3,074

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $46 million for the six months ended June 30, 2020.

In Millions
Six Months Ended June 30, 2019	Electric Utility			Gas Utility			Enterprises¹			EnerBank			Consolidated
CMS Energy, including Consumers
Consumers utility revenue		$	2,126		$	1,143		$	—		$	—		$	3,269
Other		—			—			35			—			35
Revenue recognized from contracts with customers		$	2,126		$	1,143		$	35		$	—		$	3,304
Leasing income		—			—			90			—			90
Financing income		4			4			—			102			110
Total operating revenue – CMS Energy		$	2,130		$	1,147		$	125		$	102		$	3,504
Consumers
Consumers utility revenue
Residential		$	946		$	787								$	1,733
Commercial		713			232									945
Industrial		336			33									369
Other		131			91									222
Revenue recognized from contracts with customers		$	2,126		$	1,143								$	3,269
Financing income		4			4									8
Total operating revenue – Consumers		$	2,130		$	1,147								$	3,277

¹  Amounts represent the enterprises segment’s operating revenue from independent power production and its sales of energy commodities. The enterprises segment’s sales of energy commodities are accounted for as operating leases. In addition to fixed payments, these agreements have variable payments based on energy delivered. The enterprises segment’s leasing income included variable lease payments of $63 million for the six months ended June 30, 2019.

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Cash And Cash Equivalents (Tables)

6 Months Ended

Jun. 30, 2020

Cash and Cash Equivalents [Line Items]

Schedule Of Cash And Cash Equivalents, Including Restricted Amounts

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Cash and cash equivalents, including restricted amounts		$	1,604		$	157
Consumers
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Cash and cash equivalents, including restricted amounts		$	1,229		$	28

Consumers Energy Company

Cash and Cash Equivalents [Line Items]

Schedule Of Cash And Cash Equivalents, Including Restricted Amounts

Presented in the following table are the components of total cash and cash equivalents, including restricted amounts, and their location on CMS Energy’s and Consumers’ consolidated balance sheets:

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Cash and cash equivalents		$	1,587		$	140
Restricted cash and cash equivalents		17			17
Cash and cash equivalents, including restricted amounts		$	1,604		$	157
Consumers
Cash and cash equivalents		$	1,215		$	11
Restricted cash and cash equivalents		14			17
Cash and cash equivalents, including restricted amounts		$	1,229		$	28

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Reportable Segments (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting Information [Line Items]

Schedule Of Financial Information By Reportable Segments

Presented in the following tables is financial information by segment:

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Enterprises		52				58				110				125
EnerBank		61				53				123				102
Total operating revenue – CMS Energy		$	1,443			$	1,445			$	3,307			$	3,504
Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Total operating revenue – Consumers		$	1,330			$	1,334			$	3,074			$	3,277
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Enterprises¹		1				16				21				23
EnerBank¹		8				10				22				21
Other reconciling items¹		(33		)		(31		)		(59		)		(62		)
Total net income available to common stockholders – CMS Energy		$	136			$	93			$	379			$	306
Consumers
Net income (loss) available to common stockholder
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Other reconciling items		(1		)		(1		)		(1		)		(1		)
Total net income available to common stockholder – Consumers		$	159			$	97			$	394			$	323

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Enterprises		408			405
EnerBank		35			22
Other reconciling items		20			20
Total plant, property, and equipment, gross – CMS Energy		$	25,911		$	25,390
Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Other reconciling items		20			20
Total plant, property, and equipment, gross – Consumers		$	25,468		$	24,963
CMS Energy, including Consumers
Total assets
Electric utility¹		$	15,925		$	14,911
Gas utility¹		9,006			8,659
Enterprises		542			527
EnerBank		2,799			2,692
Other reconciling items		309			48
Total assets – CMS Energy		$	28,581		$	26,837
Consumers
Total assets
Electric utility¹		$	15,987		$	14,973
Gas utility¹		9,052			8,706
Other reconciling items		21			20
Total assets – Consumers		$	25,060		$	23,699

¹ 

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

Consumers Energy Company

Segment Reporting Information [Line Items]

Schedule Of Financial Information By Reportable Segments

Presented in the following tables is financial information by segment:

In Millions
	Three Months Ended								Six Months Ended
June 30	2020				2019				2020				2019
CMS Energy, including Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Enterprises		52				58				110				125
EnerBank		61				53				123				102
Total operating revenue – CMS Energy		$	1,443			$	1,445			$	3,307			$	3,504
Consumers
Operating revenue
Electric utility		$	1,022			$	1,027			$	2,050			$	2,130
Gas utility		308				307				1,024				1,147
Total operating revenue – Consumers		$	1,330			$	1,334			$	3,074			$	3,277
CMS Energy, including Consumers
Net income (loss) available to common stockholders
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Enterprises¹		1				16				21				23
EnerBank¹		8				10				22				21
Other reconciling items¹		(33		)		(31		)		(59		)		(62		)
Total net income available to common stockholders – CMS Energy		$	136			$	93			$	379			$	306
Consumers
Net income (loss) available to common stockholder
Electric utility		$	119			$	90			$	237			$	195
Gas utility		41				8				158				129
Other reconciling items		(1		)		(1		)		(1		)		(1		)
Total net income available to common stockholder – Consumers		$	159			$	97			$	394			$	323

¹  Prior period amounts have been reclassified to reflect changes in segment reporting.

In Millions
	June 30, 2020			December 31, 2019
CMS Energy, including Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Enterprises		408			405
EnerBank		35			22
Other reconciling items		20			20
Total plant, property, and equipment, gross – CMS Energy		$	25,911		$	25,390
Consumers
Plant, property, and equipment, gross
Electric utility¹		$	16,447		$	16,158
Gas utility¹		9,001			8,785
Other reconciling items		20			20
Total plant, property, and equipment, gross – Consumers		$	25,468		$	24,963
CMS Energy, including Consumers
Total assets
Electric utility¹		$	15,925		$	14,911
Gas utility¹		9,006			8,659
Enterprises		542			527
EnerBank		2,799			2,692
Other reconciling items		309			48
Total assets – CMS Energy		$	28,581		$	26,837
Consumers
Total assets
Electric utility¹		$	15,987		$	14,973
Gas utility¹		9,052			8,706
Other reconciling items		21			20
Total assets – Consumers		$	25,060		$	23,699

¹ 

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

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Exit Activities - (Tables)

6 Months Ended

Jun. 30, 2020

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Restructuring Reserve by Type of Cost

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
June 30, 2020	Six Months Ended
Retention benefit liability at beginning of period		$	4
Costs incurred and charged to maintenance and other operating expenses¹		7
Costs incurred and capitalized		1
Retention benefit liability at the end of the period²		$	12

¹  Includes $3 million for the three months ended June 30, 2020.

² 

Includes current portion of other liabilities of $5 million.

Consumers Energy Company

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Schedule of Restructuring Reserve by Type of Cost

Presented in the following table is a reconciliation of the retention benefit liability recorded in other liabilities on Consumers’ consolidated balance sheets:

In Millions
June 30, 2020	Six Months Ended
Retention benefit liability at beginning of period		$	4
Costs incurred and charged to maintenance and other operating expenses¹		7
Costs incurred and capitalized		1
Retention benefit liability at the end of the period²		$	12

¹  Includes $3 million for the three months ended June 30, 2020.

² 

Includes current portion of other liabilities of $5 million

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New Accounting Standards (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Jan. 01, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to income	$ (164)	$ (114)	$ (434)	$ (375)
Accounting Standards Update [Extensible List]			us-gaap:AccountingStandardsUpdate201613Member
Cumulative effect of change in accounting principle
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Tax impact of ASU 2016-13					$ 14
Financing Receivables and Unfunded Loan Commitments | Cumulative effect of change in accounting principle
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Allowance for expected credit losses					$ 65
Accounting Standards Update 2016-13
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Reduction to income			$ 9

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Regulatory Matters (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	$ 2,485		$ 2,485		$ 2,489
Regulatory liabilities	84		84		87
Revenue	1,443	$ 1,445	3,307	$ 3,504
Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	2,485		2,485		2,489
Regulatory liabilities	84		84		87
Revenue	1,330	$ 1,334	3,074	$ 3,277
Gain Shared with Customers for Substation Transmission Assets to METC | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory liabilities	15		15		17
Energy Waste Reduction Plan Incentive | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Requested recovery collection	34		34
Revenue					$ 34
COVID-19 Costs Accounting Deferral | Consumers Energy Company
Public Utilities, General Disclosures [Line Items]
Regulatory assets, noncurrent	$ 9		$ 9

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Contingencies And Commitments (Contingencies And Commitments) (Details) $ in Thousands		1 Months Ended		3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 31, 2019 USD ($)	May 30, 2020 USD ($)	Jan. 31, 2019 USD ($)	Jun. 30, 2020 USD ($) site	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) lawsuit site	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) lawsuit	Mar. 31, 2020 USD ($)
Loss Contingencies [Line Items]
Regulatory assets				$ 2,485,000		$ 2,485,000		$ 2,489,000
Consumers Energy Company
Loss Contingencies [Line Items]
Regulatory assets				2,485,000		2,485,000		$ 2,489,000
Cost of gas sold				80,000	$ 104,000	350,000	$ 505,000
Bay Harbor
Loss Contingencies [Line Items]
Accrual for obligations for environmental remediation				$ 45,000		$ 45,000
Discounted projected costs rate				4.34%		4.34%
Accrual for environmental loss contingencies, inflation rate				1.00%		1.00%
Remaining undiscounted obligation amount				$ 56,000		$ 56,000
Electric Utility | NREPA | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for obligations for environmental remediation				3,000		3,000
Electric Utility | NREPA | Minimum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs				3,000		3,000
Electric Utility | NREPA | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs				4,000		4,000
Electric Utility | CERCLA Liability | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for obligations for environmental remediation				3,000		3,000
Electric Utility | CERCLA Liability | Minimum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs				3,000		3,000
Electric Utility | CERCLA Liability | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Remediation and other response activity costs				8,000		8,000
Gas Utility | NREPA | Maximum | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for obligations for environmental remediation				1,000		1,000
Remediation and other response activity costs				3,000		3,000
Gas Utility | Manufactured Gas Plant | Consumers Energy Company
Loss Contingencies [Line Items]
Accrual for obligations for environmental remediation				$ 63,000		$ 63,000
Discounted projected costs rate				2.57%		2.57%
Accrual for environmental loss contingencies, inflation rate				2.50%		2.50%
Remaining undiscounted obligation amount				$ 67,000		$ 67,000
Number of former MGPs | site				23		23
Authorized recovery, collection period						10 years
Regulatory assets				$ 126,000		$ 126,000
Equatorial Guinea Tax Claim
Loss Contingencies [Line Items]
Foreign government tax claim on sale						$ 152,000
Class Action Lawsuits
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit						4
Individual Lawsuits
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit						1
Gas Index Price Reporting Litigation
Loss Contingencies [Line Items]
Number of lawsuits | lawsuit								2
Estimated litigation liability								$ 30,000
MCV PPA | Consumers Energy Company
Loss Contingencies [Line Items]
Foreign government tax claim on sale			$ 270,000
Underwater cables Straits of Mackinac | Minimum | Consumers Energy Company
Loss Contingencies [Line Items]
Asset retirement obligation									$ 5,000
Civil Case, Consumers V. MPSC Staff [Member] | Consumers Energy Company
Loss Contingencies [Line Items]
Civil penalty settlement		$ 10
Ray Compressor Station | Consumers Energy Company
Loss Contingencies [Line Items]
Cost of gas sold	$ 7,000
Capital expenditures						$ 12,000

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Contingencies And Commitments (Expected Remediation Cost By Year) (Details) $ in Millions	Jun. 30, 2020 USD ($)
Bay Harbor
Site Contingency [Line Items]
2020	$ 3
2021	4
2022	4
2023	4
2024	4
2025	4
Gas Utility | Manufactured Gas Plant | Consumers Energy Company
Site Contingency [Line Items]
2020	7
2021	8
2022	20
2023	11
2024	2
2025	$ 2

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Contingencies And Commitments (Guarantees) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Guarantees
Guarantees And Other Contingencies [Line Items]
Guarantee Description	Guarantees
Expiration Date	indefinite
Maximum Obligation	$ 30
Carrying Amount	$ 0
Guarantees | Consumers Energy Company
Guarantees And Other Contingencies [Line Items]
Guarantee Description	Guarantee
Expiration Date	indefinite
Maximum Obligation	$ 30
Carrying Amount	$ 0
Indemnity Obligations From Stock And Asset Sales Agreements
Guarantees And Other Contingencies [Line Items]
Guarantee Description	Indemnity obligations from stock and asset sales agreements
Expiration Date	indefinite
Maximum Obligation	$ 153
Carrying Amount	2
Tax And Other Indemnity Obligations | Consumers Energy Company
Guarantees And Other Contingencies [Line Items]
Carrying Amount	$ 1

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Financings and Capitalization (Major Long-Term Debt Transactions) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Principal balance	$ 2,334
Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	1,534
First Mortgage Bonds Due August 2051 | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 575
Interest Rate	3.50%
First Mortgage Bonds Due May 2060 | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 525
Interest Rate	2.50%
First Mortgage Bonds Due May 2070 | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 134
Effective interest rate	0.077%
CMS Energy Corporation
Debt Instrument [Line Items]
Principal balance	$ 800
CMS Energy Corporation | Junior subordinated notes
Debt Instrument [Line Items]
Principal balance	$ 500
Interest Rate	4.75%
Debt instrument interest rate reset term	5 years
London Interbank Offered Rate (LIBOR) | First Mortgage Bonds Due May 2070 | Consumers Energy Company
Debt Instrument [Line Items]
Basis spread on variable rate	0.30%
Five-year Treasury Rate | CMS Energy Corporation | Junior subordinated notes
Debt Instrument [Line Items]
Basis spread on variable rate	4.116%
Term Loan Facility Due February 2021 | CMS Energy Corporation | Term loan facility
Debt Instrument [Line Items]
Principal balance	$ 300
Effective interest rate	1.572%
Term Loan Facility Due February 2021 | London Interbank Offered Rate (LIBOR) | CMS Energy Corporation | Term loan facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Term loan facility due January 2021 | Term loan facility | Consumers Energy Company
Debt Instrument [Line Items]
Principal balance	$ 300
Effective interest rate	0.556%
Term loan facility due January 2021 | London Interbank Offered Rate (LIBOR) | Term loan facility
Debt Instrument [Line Items]
Basis spread on variable rate	0.45%

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Financings and Capitalization Financings and Capitalization (Debt Retirements) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Debt Instrument [Line Items]
Redemption of debt	$ 350
Consumers Energy Company
Debt Instrument [Line Items]
Redemption of debt	350
Consumers Energy Company | First Mortgage Bonds due October 2020
Debt Instrument [Line Items]
Redemption of debt	$ 100
Interest Rate	3.77%
Consumers Energy Company | First Mortgage Bonds Due September 2022
Debt Instrument [Line Items]
Redemption of debt	$ 250
Interest Rate	5.30%

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Financings and Capitalization (Revolving Credit Facilities) (Details)	Jun. 30, 2020 USD ($)
Revolving Credit Facilities September 30, 2025
Line of Credit Facility [Line Items]
Amount of Facility	$ 18,000,000
Amount Borrowed	0
Letters of Credit Outstanding	8,000,000
Amount Available	10,000,000
Revolving Credit Facilities June 5, 2023 | Consumers Energy Company
Line of Credit Facility [Line Items]
Amount of Facility	850,000,000
Amount Borrowed	0
Letters of Credit Outstanding	7,000,000
Amount Available	843,000,000
Revolving Credit Facilities November 19, 2021 | Consumers Energy Company
Line of Credit Facility [Line Items]
Amount of Facility	250,000,000
Amount Borrowed	0
Letters of Credit Outstanding	1,000,000
Amount Available	249,000,000
Revolving Credit Facilities April 18, 2022 | Consumers Energy Company
Line of Credit Facility [Line Items]
Amount of Facility	30,000,000
Amount Borrowed	0
Letters of Credit Outstanding	30,000,000
Amount Available	0
CMS Energy Corporation | Revolving Credit Facilities June 5, 2023
Line of Credit Facility [Line Items]
Amount of Facility	550,000,000
Amount Borrowed	0
Letters of Credit Outstanding	5,000,000
Amount Available	545,000,000
Letter of Credit | Revolving Credit Facilities September 30, 2025
Line of Credit Facility [Line Items]
Amount of Facility	$ 8,000,000

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Financings and Capitalization (Narrative) (Details) - USD ($)		1 Months Ended		6 Months Ended		12 Months Ended	24 Months Ended
	Jun. 30, 2020	Apr. 30, 2020	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2018	Dec. 31, 2019	Jul. 31, 2020
Financing And Capitalization [Line Items]
Amount available for dividend payments	$ 5,200,000,000			$ 5,200,000,000
Common stock dividends from Consumers				276,000,000
Stock offering program maximum value		$ 500,000,000				$ 250,000,000
Proceeds from settlement of forward contracts				$ 104,000,000	$ 6,000,000
Settlement required (in shares)	390,008			390,008
Consumers Energy Company
Financing And Capitalization [Line Items]
Unrestricted retained earnings	$ 1,600,000,000			$ 1,600,000,000
Consumers Energy Company | Commercial Paper
Financing And Capitalization [Line Items]
Short-term debt, authorized borrowings				500,000,000
Short-term debt	0			$ 0
Forward Contracts
Financing And Capitalization [Line Items]
Forward sales contracts aggregate price	$ 150,000,000						$ 250,000,000
Settlement of Forward Contracts
Financing And Capitalization [Line Items]
Settlement of forward contract issued (in shares)			2,017,783
Forward contract settlement (in dollars per share)			$ 47.95
Proceeds from settlement of forward contracts			$ 97,000,000
Subsequent Event | Tax Exempt Revenue Bonds | Tax Exempt Revenue Bonds Due 2035 | Consumers Energy Company
Financing And Capitalization [Line Items]
Debt repurchased								$ 35,000,000

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Financings and Capitalization (Forward Stock Contracts) (Details) - $ / shares	Jun. 30, 2020	Feb. 21, 2019	Nov. 20, 2018
Forward Contracts Entered Into November 2018 and Maturing March 2021
Debt and Equity Securities, FV-NI [Line Items]
Number of Shares			777,899
Initial forward price (in dollars per share)	$ 49.32		$ 50.91
Forward Contracts Entered into February 2019 and Maturing March 2021
Debt and Equity Securities, FV-NI [Line Items]
Number of Shares		2,083,340
Initial forward price (in dollars per share)	$ 50.88	$ 52.27

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Fair Value Measurements (Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Assets
Restricted cash and cash equivalents	$ 17	$ 17
Derivative instruments	3	1
Liabilities
Derivative instruments	21	8
Consumers Energy Company
Assets
Restricted cash and cash equivalents	14	17
Derivative instruments	3	1
Liabilities
Derivative instruments	1	0
Fair Value, Inputs, Level 1
Assets
Cash equivalents	100	0
Restricted cash and cash equivalents	17	17
Nonqualified deferred compensation plan assets	19	18
Liabilities
Nonqualified deferred compensation plan liabilities	19	18
Fair Value, Inputs, Level 1 | Consumers Energy Company
Assets
Cash equivalents	100	0
Restricted cash and cash equivalents	14	17
Nonqualified deferred compensation plan assets	15	14
Liabilities
Nonqualified deferred compensation plan liabilities	15	14
Fair Value, Inputs, Level 1 | Common Stock | Consumers Energy Company
Assets
CMS Energy common stock	1	1
Fair Value, Inputs, Level 1, 2 and 3
Assets
Total	139	36
Liabilities
Total	40	26
Fair Value, Inputs, Level 1, 2 and 3 | Consumers Energy Company
Assets
Total	133	33
Liabilities
Total	$ 16	$ 14

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Fair Value Measurements (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash flow hedge gain (loss)		$ (3)	$ (5)	$ (4)
Derivative instruments	$ 21		21		$ 8
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative notional amount	88		88
Cash Flow Hedging | Other Liabilities | Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments	10		10		5
EnerBank | Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap Notes Receivable
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative notional amount	134		134
EnerBank | Fair Value Hedging | Other Liabilities | Designated as Hedging Instrument
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative instruments	7		$ 7		$ 1
Maximum
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash flow hedge gain (loss)	$ (1)

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Financial Instruments (Schedule Of Carrying Amounts And Fair Values Of Financial Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Assets
Securities held to maturity	$ 29	$ 26
Liabilities
EnerBank notes receivable, net of allowance for loan losses	264	242
Long-term debt, current	1,700	1,100
Other current liabilities	6	1
Carrying Amount
Assets
Long-term receivables	19	20
Notes receivable	2,597	2,500
Securities held to maturity	29	26
Liabilities
Long-term debt	15,139	13,062
Long-term payables	31	30
Fair Value
Assets
Long-term receivables	19	20
Notes receivable	2,896	2,652
Securities held to maturity	29	26
Liabilities
Long-term debt	17,154	14,185
Long-term payables	32	32
Consumers Energy Company
Liabilities
Long-term debt, current	537	202
Current portion notes receivable related party	7	7
Consumers Energy Company | Carrying Amount
Assets
Long-term receivables	19	20
Notes receivable related party	103	103
Liabilities
Long-term debt	8,404	7,250
Consumers Energy Company | Fair Value
Assets
Long-term receivables	19	20
Notes receivable related party	103	103
Liabilities
Long-term debt	9,912	8,010
Other Receivables
Liabilities
Accounts receivable, current	12	13
Other Receivables | Consumers Energy Company
Liabilities
Accounts receivable, current	12	13
Fair Value, Inputs, Level 1 | Fair Value
Assets
Long-term receivables	0	0
Notes receivable	0	0
Securities held to maturity	0	0
Liabilities
Long-term debt	1,150	1,197
Long-term payables	0	0
Fair Value, Inputs, Level 1 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	0	0
Notes receivable related party	0	0
Liabilities
Long-term debt	0	0
Fair Value, Inputs, Level 2 | Fair Value
Assets
Long-term receivables	0	0
Notes receivable	0	0
Securities held to maturity	29	26
Liabilities
Long-term debt	14,290	11,048
Long-term payables	0	0
Fair Value, Inputs, Level 2 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	0	0
Notes receivable related party	0	0
Liabilities
Long-term debt	8,198	6,070
Fair Value, Inputs, Level 3 | Fair Value
Assets
Long-term receivables	19	20
Notes receivable	2,896	2,652
Securities held to maturity	0	0
Liabilities
Long-term debt	1,714	1,940
Long-term payables	32	32
Fair Value, Inputs, Level 3 | Consumers Energy Company | Fair Value
Assets
Long-term receivables	19	20
Notes receivable related party	103	103
Liabilities
Long-term debt	1,714	1,940
EnerBank
Liabilities
EnerBank notes receivable, net of allowance for loan losses	$ 264	$ 242

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Financial Instruments (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Portion of long-term debt supported by third-party credit enhancements	$ 35	$ 35
Consumers Energy Company
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Portion of long-term debt supported by third-party credit enhancements	$ 35	$ 35

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Financial Instruments (Schedule Of Investment Securities) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Held to maturity
Cost	$ 29	$ 26
Unrealized Gains	0	0
Unrealized Losses	0	0
Securities held to maturity	$ 29	$ 26

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Notes Receivable (Schedule Of Current And Non-Current Notes Receivable) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current
EnerBank notes receivable, net of allowance for loan losses	$ 264	$ 242
Non‑current
Total notes receivable	2,597	2,500
Consumers Energy Company
Current
DB SERP note receivable – related party	7	7
Non‑current
DB SERP note receivable – related party	96	96
Total notes receivable	103	103
EnerBank
Current
EnerBank notes receivable, net of allowance for loan losses	264	242
Non‑current
EnerBank notes receivable, net of allowance for loan losses	$ 2,333	$ 2,258

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Notes Receivable (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
CMS Energy Note Payable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest Rate	4.10%
EnerBank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Unearned income	$ 131	$ 134
Delinquent loans	23	$ 33
EnerBank | Retail Installment Contracts
Accounts, Notes, Loans and Financing Receivable [Line Items]
Financing receivable purchases	17
Fair Value Hedging | Designated as Hedging Instrument | EnerBank | Interest Rate Swap Notes Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest rate swap	$ 134
Credit Concentration Risk | FICO Score, between Good and Excellent | EnerBank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk percentage	85.00%
Unfunded Loan Commitment
Accounts, Notes, Loans and Financing Receivable [Line Items]
Off-balance sheet unfunded loan commitments	$ 513
Unfunded Loan Commitment | EnerBank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for expected credit loss on off balance sheet commitments	$ 9
Loans Originated Within Last Five Years | Credit Concentration Risk | EnerBank
Accounts, Notes, Loans and Financing Receivable [Line Items]
Concentration risk percentage	97.00%

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Notes Receivable - Schedule of Allowance For Loan Losses (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2020	Jan. 01, 2020
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Accounting Standards Update [Extensible List]		us-gaap:AccountingStandardsUpdate201613Member
EnerBank
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	$ 99	$ 33
Effects of new accounting standard	104	104	$ 104
Provisions for loan losses	13	26
Charge-offs	(9)	(20)
Recoveries	1	3
Balance at end of period	104	104
EnerBank | Cumulative effect of change in accounting principle
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Balance at beginning of period	0	62
Effects of new accounting standard	$ 0	$ 62
Unfunded Loan Commitment | EnerBank
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for expected credit loss on off balance sheet commitments			$ 9
Unfunded Loan Commitment | EnerBank | Cumulative effect of change in accounting principle
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Allowance for expected credit loss on off balance sheet commitments				$ 3

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Retirement Benefits (Schedule Of Net Benefit Costs) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
DB Pension Plans
Net periodic cost (credit)
Service cost	$ 13	$ 10	$ 25	$ 20
Interest cost	20	24	41	49
Expected return on plan assets	(48)	(41)	(96)	(81)
Amortization of:
Net loss	22	12	44	24
Prior service cost (credit)	1	1	1	1
Net periodic cost (credit)	8	6	15	13
DB Pension Plans | Consumers Energy Company
Net periodic cost (credit)
Service cost	12	10	24	20
Interest cost	19	23	39	46
Expected return on plan assets	(46)	(38)	(91)	(76)
Amortization of:
Net loss	21	11	42	23
Prior service cost (credit)	1	1	1	1
Net periodic cost (credit)	7	7	15	14
OPEB Plan
Net periodic cost (credit)
Service cost	4	3	8	7
Interest cost	9	10	17	20
Expected return on plan assets	(25)	(22)	(50)	(44)
Amortization of:
Net loss	3	6	7	13
Prior service cost (credit)	(14)	(15)	(28)	(31)
Net periodic cost (credit)	(23)	(18)	(46)	(35)
OPEB Plan | Consumers Energy Company
Net periodic cost (credit)
Service cost	4	4	8	7
Interest cost	8	10	16	20
Expected return on plan assets	(24)	(20)	(47)	(41)
Amortization of:
Net loss	3	6	7	13
Prior service cost (credit)	(13)	(16)	(27)	(31)
Net periodic cost (credit)	$ (22)	$ (16)	$ (43)	$ (32)

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Retirement Benefits Retirement Benefits (Narrative) (Details) - DB Pension Plans $ in Millions	1 Months Ended
	Jan. 31, 2020 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 531
Consumers Energy Company
Defined Benefit Plan Disclosure [Line Items]
Contributions by employer	$ 518

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Income Taxes (Schedule Of Effective Income Tax Rate Reconciliation) (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Mar. 31, 2020	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2017
Income Taxes [Line Items]
U.S. federal income tax rate		21.00%	21.00%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		4.60%	5.40%
TCJA excess deferred taxes		(4.00%)	(3.50%)
Production tax credits		(2.80%)	(2.50%)
Research and development tax credits, net		(2.20%)	(0.20%)
Alternative minimum tax sequestration		(2.10%)	0.00%
Accelerated flow-through of regulatory tax benefits		(1.50%)	(1.50%)
Other, net		(0.60%)	(0.60%)
Effective tax rate		12.40%	18.10%
AMT sequestration income tax benefit	$ 9
Consumers Energy Company
Income Taxes [Line Items]
U.S. federal income tax rate		21.00%	21.00%
Increase (decrease) in income taxes from:
State and local income taxes, net of federal effect		5.00%	5.70%
TCJA excess deferred taxes		(3.60%)	(3.20%)
Production tax credits		(1.60%)	(1.30%)
Research and development tax credits, net		(1.90%)	(0.20%)
Accelerated flow-through of regulatory tax benefits		(1.60%)	(1.80%)
Other, net		(0.50%)	(0.40%)
Effective tax rate		16.80%	19.80%
Reduction of income tax expense		$ 7	$ 7
Research Tax Credit Carryforward
Increase (decrease) in income taxes from:
Increase in credit	9
Research Tax Credit Carryforward | Consumers Energy Company
Increase (decrease) in income taxes from:
Increase in credit	$ 8
Plant, Property, And Equipment (Subject To Normalization) | Consumers Energy Company
Increase (decrease) in income taxes from:
Regulatory liabilities				$ 1,600

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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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income available to common stockholders
Net income	$ 137	$ 94	$ 380	$ 307
Income Attributable to Noncontrolling Interests	1	1	1	1
Net Income Available to Common Stockholders	$ 136	$ 93	$ 379	$ 306
Average common shares outstanding
Weighted average shares - basic (in shares)	285.5	282.9	284.4	282.9
Dilutive nonvested stock awards (in shares)	0.6	0.6	0.7	0.6
Dilutive forward equity sale contracts (in shares)	0.4	0.5	0.7	0.3
Weighted average shares - diluted (in shares)	286.5	284.0	285.8	283.8
Net income per average common share available to common stockholders
Basic earnings per average common share (in dollars per share)	$ 0.48	$ 0.33	$ 1.33	$ 1.08
Diluted earnings per average common share (in dollars per share)	$ 0.48	$ 0.33	$ 1.33	$ 1.08

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Revenue (Components Of Operating Revenue) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	$ 1,343	$ 1,347	$ 3,101	$ 3,304
Leasing income	35	42	74	90
Financing income	65	56	132	110
Total operating revenue	1,443	1,445	3,307	3,504
Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	17	16	36	35
Consumers Energy Company
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	1,326	1,331	3,065	3,269
Financing income	4	3	9	8
Total operating revenue	1,330	1,334	3,074	3,277
Consumers Energy Company | Residential
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	713	621	1,687	1,733
Consumers Energy Company | Commercial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	392	420	880	945
Consumers Energy Company | Industrial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	133	182	293	369
Consumers Energy Company | Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	88	108	205	222
Operating Segments | Electric Utility
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	1,020	1,026	2,045	2,126
Financing income	2	1	5	4
Total operating revenue	1,022	1,027	2,050	2,130
Operating Segments | Gas Utility
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	306	305	1,020	1,143
Financing income	2	2	4	4
Total operating revenue	308	307	1,024	1,147
Operating Segments | Enterprises
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	17	16	36	35
Leasing income	35	42	74	90
Total operating revenue	52	58	110	125
Variable lease income	21	29	46	63
Operating Segments | Enterprises | Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	17	16	36	35
Operating Segments | EnerBank
Disaggregation of Revenue [Line Items]
Financing income	61	53	123	102
Total operating revenue	61	53	123	102
Operating Segments | Consumers Energy Company | Electric Utility
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	1,020	1,026	2,045	2,126
Financing income	2	1	5	4
Total operating revenue	1,022	1,027	2,050	2,130
Operating Segments | Consumers Energy Company | Electric Utility | Residential
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	507	423	988	946
Operating Segments | Consumers Energy Company | Electric Utility | Commercial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	341	362	680	713
Operating Segments | Consumers Energy Company | Electric Utility | Industrial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	126	174	266	336
Operating Segments | Consumers Energy Company | Electric Utility | Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	46	67	111	131
Operating Segments | Consumers Energy Company | Gas Utility
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	306	305	1,020	1,143
Financing income	2	2	4	4
Total operating revenue	308	307	1,024	1,147
Operating Segments | Consumers Energy Company | Gas Utility | Residential
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	206	198	699	787
Operating Segments | Consumers Energy Company | Gas Utility | Commercial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	51	58	200	232
Operating Segments | Consumers Energy Company | Gas Utility | Industrial
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	7	8	27	33
Operating Segments | Consumers Energy Company | Gas Utility | Other
Disaggregation of Revenue [Line Items]
Revenue recognized from contracts with customers	$ 42	$ 41	$ 94	$ 91

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Revenue (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Uncollectable expense	$ 8	$ 6	$ 13	$ 12
Regulatory assets	2,485		2,485		$ 2,489
Consumers Energy Company
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Regulatory assets	2,485		2,485		2,489
Unbilled receivables	326		326		$ 426
COVID-19 Costs Accounting Deferral | Consumers Energy Company
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Regulatory assets	$ 9		$ 9

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Cash And Cash Equivalents (Schedule Of Cash And Cash Equivalents, Including Restricted Amounts) (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Dec. 31, 2018
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	$ 1,587	$ 140
Restricted cash and cash equivalents	17	17
Cash and cash equivalents, including restricted amounts	1,604	157	$ 334	$ 175
Consumers Energy Company
Cash and Cash Equivalents [Line Items]
Cash and cash equivalents	1,215	11
Restricted cash and cash equivalents	14	17
Cash and cash equivalents, including restricted amounts	$ 1,229	$ 28	$ 212	$ 56

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Reportable Segments (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Segment Reporting Information [Line Items]
Operating Revenue	$ 1,443	$ 1,445	$ 3,307	$ 3,504
Net income (loss) available to common stockholders	136	93	379	306
Plant, property, and equipment, gross	25,911		25,911		$ 25,390
Total Assets	28,581		28,581		26,837
Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue	1,330	1,334	3,074	3,277
Net income (loss) available to common stockholder	159	97	394	323
Plant, property, and equipment, gross	25,468		25,468		24,963
Total Assets	25,060		25,060		23,699
Operating Segments | Electric Utility
Segment Reporting Information [Line Items]
Operating Revenue	1,022	1,027	2,050	2,130
Net income (loss) available to common stockholders	119	90	237	195
Plant, property, and equipment, gross	16,447		16,447		16,158
Total Assets	15,925		15,925		14,911
Operating Segments | Electric Utility | Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue	1,022	1,027	2,050	2,130
Net income (loss) available to common stockholder	119	90	237	195
Plant, property, and equipment, gross	16,447		16,447		16,158
Total Assets	15,987		15,987		14,973
Operating Segments | Gas Utility
Segment Reporting Information [Line Items]
Operating Revenue	308	307	1,024	1,147
Net income (loss) available to common stockholders	41	8	158	129
Plant, property, and equipment, gross	9,001		9,001		8,785
Total Assets	9,006		9,006		8,659
Operating Segments | Gas Utility | Consumers Energy Company
Segment Reporting Information [Line Items]
Operating Revenue	308	307	1,024	1,147
Net income (loss) available to common stockholder	41	8	158	129
Plant, property, and equipment, gross	9,001		9,001		8,785
Total Assets	9,052		9,052		8,706
Operating Segments | Enterprises
Segment Reporting Information [Line Items]
Operating Revenue	52	58	110	125
Net income (loss) available to common stockholders	1	16	21	23
Plant, property, and equipment, gross	408		408		405
Total Assets	542		542		527
Operating Segments | EnerBank
Segment Reporting Information [Line Items]
Operating Revenue	61	53	123	102
Net income (loss) available to common stockholders	8	10	22	21
Plant, property, and equipment, gross	35		35		22
Total Assets	2,799		2,799		2,692
Other reconciling items
Segment Reporting Information [Line Items]
Net income (loss) available to common stockholders	(33)	(31)	(59)	(62)
Plant, property, and equipment, gross	20		20		20
Total Assets	309		309		48
Other reconciling items | Consumers Energy Company
Segment Reporting Information [Line Items]
Net income (loss) available to common stockholder	(1)	$ (1)	(1)	$ (1)
Plant, property, and equipment, gross	20		20		20
Total Assets	$ 21		$ 21		$ 20

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Exit Activities - Narrative (Details) - D.E. Karn Generating Complex $ in Millions	3 Months Ended	6 Months Ended	9 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Expected cost	$ 35	$ 35	$ 35
Retention Benefits
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Retention costs	$ 3	7	11
Costs incurred and capitalized		$ 1
Property, Plant and Equipment | Retention Benefits
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Costs incurred and capitalized			$ 1

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Exit Activities - Schedule of Retention Benefit Liability Roll Forward (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended	9 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jun. 30, 2020	Dec. 31, 2019
Restructuring Reserve [Roll Forward]
Other current liabilities	$ 181	$ 181	$ 181	$ 186
Retention Benefits | D.E. Karn Generating Complex
Restructuring Reserve [Roll Forward]
Retention benefit liability at beginning of period		4
Costs incurred and charged to maintenance and other operating expenses	3	7	11
Costs incurred and capitalized		1
Retention benefit liability at the end of the period	12	12	12
Other current liabilities	$ 5	$ 5	$ 5