Leases and Palisades Financing - (Tables)

12 Months Ended

Dec. 31, 2021

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	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

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, 2021 and 2020.

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	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

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	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

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, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52

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, 2021
2022	$	48
2023	43
2024	43
2025	44
2026	18
Total minimum lease payments	$	196

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	2021				2020				2021				2020
Operating leases
Right-of-use assets1		$	26			$	32			$	22			$	28
Lease liabilities
Current lease liabilities2		3				7				3				7
Non-current lease liabilities3		23				25				19				21
Finance leases
Right-of-use assets		$	57			$	65			$	57			$	65
Lease liabilities4
Current lease liabilities		6				7				6				7
Non-current lease liabilities		46				53				46				53
Weighted-average remaining lease term (in years)
Operating leases		23				19				21				18
Finance leases		12				12				12				12
Weighted-average discount rate
Operating leases		4.0		%		3.9		%		3.9		%		3.8		%
Finance leases5		1.7		%		1.8		%		1.7		%		1.8		%

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, 2021 and 2020.

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	2021			2020
CMS Energy, including Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		22			17
Total lease costs		$	143		$	143
Consumers
Operating lease costs		$	8		$	9
Finance lease costs
Amortization of right-of-use assets		7			6
Interest on lease liabilities		16			17
Variable lease costs		90			94
Short-term lease costs		21			16
Total lease costs		$	142		$	142

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	2021			2020
CMS Energy, including Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	11
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6
Consumers
Cash paid for amounts included in the measurement of lease liabilities
Cash used in operating activities for operating leases		$	8		$	9
Cash used in operating activities for finance leases		16			17
Cash used in financing activities for finance leases		7			6

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, 2021	Operating Leases			Pipelines and PPAs			Other			Total
CMS Energy, including Consumers
2022		$	5		$	14		$	5		$	19
2023		2			13			5			18
2024		2			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		32			51			9			60
Total minimum lease payments		$	43		$	117		$	25		$	142
Less discount		17			88			2			90
Present value of minimum lease payments		$	26		$	29		$	23		$	52
Consumers
2022		$	4		$	14		$	5		$	19
2023		2			13			5			18
2024		1			13			3			16
2025		1			13			1			14
2026		1			13			2			15
2027 and thereafter		27			51			9			60
Total minimum lease payments		$	36		$	117		$	25		$	142
Less discount		14			88			2			90
Present value of minimum lease payments		$	22		$	29		$	23		$	52