Leases and Palisades Financing - (Tables)

12 Months Ended

Dec. 31, 2020

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2020				2019				2020				2019
Operating leases
Right-of-use assets1		$	34			$	47			$	28			$	40
Lease liabilities
Current lease liabilities2		9				9				7				8
Non-current lease liabilities3		25				37				21				32
Finance leases
Right-of-use assets		$	65			$	71			$	65			$	71
Lease liabilities4
Current lease liabilities		7				6				7				6
Non-current lease liabilities		53				60				53				60
Weighted-average remaining lease term (in years)
Operating leases		19				17				18				14
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		3.9		%		3.8		%		3.8		%		3.7		%
Finance leases5		1.8		%		1.9		%		1.8		%		1.9		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2020 and December 31, 2019.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
Operating lease costs		$	10		$	11
Finance lease costs
Amortization of right-of-use assets		6			6
Interest on lease liabilities		17			18
Variable lease costs		94			95
Short-term lease costs		17			16
Total lease costs		$	144		$	146
Consumers
Operating lease costs		$	9		$	9
Finance lease costs
Amortization of right-of-use assets		6			6
Interest on lease liabilities		17			18
Variable lease costs		94			95
Short-term lease costs		16			16
Total lease costs		$	142		$	144

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	11		$	11
Cash used in operating activities for finance leases		17			18
Cash used in financing activities for finance leases		6			7
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	9		$	9
Cash used in operating activities for finance leases		17			18
Cash used in financing activities for finance leases		6			7

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2020	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2021		$	10		$	17		$	5		$	22
2022		4			14			5			19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026 and thereafter		34			66			11			77
Total minimum lease payments		$	52		$	136		$	30		$	166
Less discount		18			103			3			106
Present value of minimum lease payments		$	34		$	33		$	27		$	60
Consumers
2021		$	8		$	17		$	5		$	22
2022		4			14			5			19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026 and thereafter		27			66			11			77
Total minimum lease payments		$	43		$	136		$	30		$	166
Less discount		15			103			3			106
Present value of minimum lease payments		$	28		$	33		$	27		$	60

Lessor, Operating Lease, Payments to be Received, Maturity

Presented in the following table are the minimum rental payments to be received under CMS Energy’s non‑cancelable operating leases:

In Millions
December 31, 2020
2021	$	54
2022	48
2023	43
2024	43
2025	44
2026 and thereafter	18
Total minimum lease payments	$	250

Debt Maturities

At December 31, 2020, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2021			2022			2023			2024			2025
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	200		$	—		$	—		$	250		$	250
Consumers		364			28			654			332			31
CMS Enterprises, including subsidiaries		7			8			9			10			51
EnerBank		915			572			477			325			244
Total CMS Energy		$	1,486		$	608		$	1,140		$	917		$	576
Consumers
Long-term debt		$	364		$	28		$	654		$	332		$	31

Consumers Energy Company

Leases [Line Items]

Assets and Liabilities of Lessee

Presented in the following table is information about CMS Energy’s and Consumers’ lease right-of-use assets and lease liabilities:

In Millions, Except as Noted
	CMS Energy, including Consumers								Consumers
December 31	2020				2019				2020				2019
Operating leases
Right-of-use assets1		$	34			$	47			$	28			$	40
Lease liabilities
Current lease liabilities2		9				9				7				8
Non-current lease liabilities3		25				37				21				32
Finance leases
Right-of-use assets		$	65			$	71			$	65			$	71
Lease liabilities4
Current lease liabilities		7				6				7				6
Non-current lease liabilities		53				60				53				60
Weighted-average remaining lease term (in years)
Operating leases		19				17				18				14
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		3.9		%		3.8		%		3.8		%		3.7		%
Finance leases5		1.8		%		1.9		%		1.8		%		1.9		%

1CMS Energy’s and Consumers’ operating right-of-use lease assets are reported as other non‑current assets on their consolidated balance sheets.

2The current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other current liabilities on their consolidated balance sheets.

3The non‑current portion of CMS Energy’s and Consumers’ operating lease liabilities are reported as other non‑current liabilities on their consolidated balance sheets.

4Includes related-party lease liabilities of $25 million, of which less than $1 million was current, at December 31, 2020 and December 31, 2019.

5This rate excludes the impact of Consumers’ pipeline agreements and long-term PPAs accounted for as finance leases. The required capacity payments under these agreements, when compared to the underlying fair value of the leased assets, result in effective interest rates that exceed market rates for leases with similar terms.

Lease Cost

Presented in the following table is a summary of CMS Energy’s and Consumers’ total lease costs:

In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
Operating lease costs		$	10		$	11
Finance lease costs
Amortization of right-of-use assets		6			6
Interest on lease liabilities		17			18
Variable lease costs		94			95
Short-term lease costs		17			16
Total lease costs		$	144		$	146
Consumers
Operating lease costs		$	9		$	9
Finance lease costs
Amortization of right-of-use assets		6			6
Interest on lease liabilities		17			18
Variable lease costs		94			95
Short-term lease costs		16			16
Total lease costs		$	142		$	144

Presented in the following table is cash flow information related to amounts paid on CMS Energy’s and Consumers’ lease liabilities:

In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	11		$	11
Cash used in operating activities for finance leases		17			18
Cash used in financing activities for finance leases		6			7
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	9		$	9
Cash used in operating activities for finance leases		17			18
Cash used in financing activities for finance leases		6			7

Lessee Operating Lease Liability and Finance Liability Maturity

Presented in the following table are the minimum rental commitments under CMS Energy’s and Consumers’ non-cancelable leases:

In Millions
				Finance Leases
December 31, 2020	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2021		$	10		$	17		$	5		$	22
2022		4			14			5			19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026 and thereafter		34			66			11			77
Total minimum lease payments		$	52		$	136		$	30		$	166
Less discount		18			103			3			106
Present value of minimum lease payments		$	34		$	33		$	27		$	60
Consumers
2021		$	8		$	17		$	5		$	22
2022		4			14			5			19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026 and thereafter		27			66			11			77
Total minimum lease payments		$	43		$	136		$	30		$	166
Less discount		15			103			3			106
Present value of minimum lease payments		$	28		$	33		$	27		$	60

Debt Maturities

At December 31, 2020, the aggregate annual maturities for long-term debt for the next five years, based on stated maturities or earlier put dates, were:

In Millions
	2021			2022			2023			2024			2025
CMS Energy, including Consumers
Long-term debt
CMS Energy, parent only		$	200		$	—		$	—		$	250		$	250
Consumers		364			28			654			332			31
CMS Enterprises, including subsidiaries		7			8			9			10			51
EnerBank		915			572			477			325			244
Total CMS Energy		$	1,486		$	608		$	1,140		$	917		$	576
Consumers
Long-term debt		$	364		$	28		$	654		$	332		$	31

Presented in the following table are the minimum Palisades PPA payments included in the financing obligation:

In Millions
December 31, 2020
2021	$	14
2022	3
Total minimum payments	$	17
Less discount	1
Financing obligation	$	16
Less current portion	13
Non-current portion	$	3