CMS Energy : 2020 Annual Report

March 15, 2021

CMSENERGY&CONSUMERS ENERGY

ANNUAL REPORT

2020

To Our Fellow Shareowners:

Outside of responding to the COVID-19 pandemic, this past year has been transformative. Committing to be the President and CEO of CMS Energy and Consumers Energy was a true honor for me and my family. Since joining in 2003, my love for our company has only deepened. There is no other place I'd rather be than with the amazing team I work with every day. My co-workers are a true testament of how a company succeeds, even during the hard years. I'm proud to report that we delivered another year of strong financial performance in 2020, marking 18 years of meeting our adjusted earnings guidance - industry leading, consistent financial performance. Our

co-workers have exemplified our purpose ─ CMS Energy: World Class Performance

Delivering Hometown Service. This will continue to be our guide path to success.

I am looking into the future with excitement. Highlights include mobilizing our long-term strategy, delivering consistent industry-leading financial performance, striving for excellence through the CE Way, and maintaining a top tier regulatory climate in Michigan.

I am happy to share our latest accomplishments that continue to exemplify our triple bottom line - People, Planet and Profit.

PEOPLE:

• Contributed more than $80 million to support our customers and the communities we serve during the pandemic
• Achieved 1st quartile employee engagement for U.S. utilitiesi
• Achieved 1st quartile customer experience across all industriesii
• Attracted 126 megawatts of new or expanding load to the state, which is anticipated to add over $2½ billion of Michigan investment and over 4,000 jobs
• Named one of the top 50 best employers for diversity 2020 by Forbes Magazine
• Appointed a Chief Diversity Officer in June 2020
• Extended parental leave to 6 months paid leave for birthing-parent and non-birthing parent leave to 4 months paid leave

Table of Contents

PLANET:

• Invested more than $700 million in gas, electric and renewable infrastructure to support our clean energy transition
• Added over 800 megawatts of windiii
• Executed on contracts for 300 megawatts of new solar
• Achieved more than 500 megawatts of Demand Response
• Reduced water usage by over 430 million gallons
• Reduced landfill waste by 49 percent from 2019 levels; this included a trash reduction of over 22%
• Enhanced, restored, or protected over 2,400 acres of land
• Reduced carbon dioxide emissions by over 35 percent since 2005
• Named one of 2020 Barron's 100 most sustainable companies

PROFIT:

• Achieved over $100 million in cost savings largely driven by waste elimination and the CE Way
• Achieved cash flow from operating activities of $1.28 billion and adjusted cash flow from operating activities of $1.98 billion, excluding $700 million of voluntary pension contributions in 2020iv
• In January 2021, increased common stock dividend by 7% to $1.74 per share on an annualized basis; 15th increase in as many years
• Delivered 18th year of consistent industry-leading financial performance

I look forward to the coming year and thank you for your continued investment.

Sincerely,

Garrick Rochow President and CEO

i This metric is measured by an external vendor CultureIQ - we are 6 points above 1st quartile
ii Source: Data from CXi Forrester Index
iii 525 MW Aviator Wind, 150 MW Gratiot Farms Wind, 166 MW Crescent Wind
iv Management views adjusted (non-Generally Accepted Accounting Principles) cash flows as a key measure of the company's present operating financial performance and uses adjusted cash flows for external communications with analysts and investors. Internally, the company uses adjusted cash flows to measure and assess performance. Adjusted cash flows should be considered supplemental information to assist in understanding our business results, rather than as a substitute for reported cash flows.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 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

1-9513

CMS ENERGY CORPORATION

(A Michigan Corporation)

One Energy Plaza, Jackson, Michigan 49201

(517) 788‑0550

1-5611

CONSUMERS ENERGY COMPANY

(A Michigan Corporation)

One Energy Plaza, Jackson, Michigan 49201

(517) 788‑0550

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

CMS Energy Corporation: Yes ☒ No ☐

Consumers Energy Company:

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

CMS Energy Corporation: Yes ☐ No ☒

Consumers Energy Company:

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

☒

☐

Consumers Energy Company:

Yes

☒

☐

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

☒

☐

Consumers Energy Company:

Yes

☒

☐

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.

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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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

☒ ☐

☒

The aggregate market value of CMS Energy voting and non‑voting common equity held by non‑affiliates was $16.647 billion for the 284,957,910 CMS Energy Corporation Common Stock shares outstanding on June 30, 2020 based on the closing sale price of $58.42 for CMS Energy Corporation Common Stock, as reported by the New York Stock Exchange on such date. There were no shares of Consumers common equity held by non‑affiliates as of June 30, 2020.

There were 288,943,354 shares of CMS Energy Corporation Common Stock outstanding on January 15, 2021. On January 15, 2021, CMS Energy held all 84,108,789 outstanding shares of common stock of Consumers.

Documents incorporated by reference in Part III: CMS Energy's and Consumers' proxy statement relating to their 2021 Annual Meetings of Shareholders to be held May 7, 2021.

IRS Employer Identification No.
38-2726431
38-0442310
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
Securities registered pursuant to Section 12(g) of the Act: None

Yes	☒	No	☐
Yes	☐	No	☒

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	☐

CMS Energy Corporation Consumers Energy Company

Annual Reports on Form 10-K to the Securities and Exchange Commission for the Year Ended December 31, 2020

Table of Contents

Glossary ...............................................................................................................................................2

Filing Format .......................................................................................................................................10

Forward-Looking Statements and Information ...................................................................................10

Part I ....................................................................................................................................................14

Item 1.Business ...........................................................................................................................14

Item 1A.Risk Factors .....................................................................................................................36

Item 1B.Unresolved Staff Comments ............................................................................................46

Item 2.Properties .........................................................................................................................46

Item 3.Legal Proceedings ............................................................................................................47

Item 4.Mine Safety Disclosures ..................................................................................................47

Part II ...................................................................................................................................................47

Item 5.Market For Registrant's Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities .........................................................................................47

Item 6.

Item 7.

Selected Financial Data ....................................................................................................50Management's Discussion and Analysis of Financial Condition and Results of

Operations ........................................................................................................................52

Item 7A.Quantitative and Qualitative Disclosures About Market Risk .........................................89

Item 8.Financial Statements and Supplementary Data ................................................................91

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure ........................................................................................................................ 189

Item 9A. Controls and Procedures .................................................................................................. 189

Item 9B. Other Information ............................................................................................................ 191

Part III ................................................................................................................................................. 191

Item 10. Directors, Executive Officers and Corporate Governance .............................................. 191

Item 11. Executive Compensation ................................................................................................. 192

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters ......................................................................................................... 192

Item 13. Certain Relationships and Related Transactions, and Director Independence ................ 193

Item 14. Principal Accountant Fees and Services .......................................................................... 193

Part IV ................................................................................................................................................. 195

Item 15. Exhibits and Financial Statement Schedules ................................................................... 195

Item 16. Form 10-K Summary ....................................................................................................... 207

Signatures ............................................................................................................................................ 208

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

ABATE

The Association of Businesses Advocating Tariff Equity

ABO

Accumulated benefit obligation; the liabilities of a pension plan based on service and pay to date, which differs from the PBO in that it does not reflect expected future salary increases

AFUDC

Allowance for borrowed and equity funds used during construction

AOCI

Accumulated other comprehensive income (loss)

ARO

Asset retirement obligation

ASC 715

Financial Accounting Standards Board Accounting Standards Codification Topic 715, Retirement Benefits

ASU

Financial Accounting Standards Board Accounting Standards Update

Aviator Wind

Aviator Wind, LLC, a VIE in which Aviator Wind Equity Holdings holds a Class B membership interest

Aviator Wind Equity Holdings

Aviator Wind Equity Holdings, LLC, a VIE in which Grand River Wind, LLC, a wholly owned subsidiary of CMS Enterprises, has a 51‑percent interest

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

CAO

Chief Accounting Officer

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

city-gate contract

An arrangement made for the point at which a local distribution company physically receives gas from a supplier or pipeline

Clean Air Act

Federal Clean Air Act of 1963, as amended

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 Capital

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

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 ERM

CMS Energy Resource Management Company, formerly known as CMS MST, a wholly owned subsidiary of CMS Enterprises

CMS Field Services

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

CMS Gas Transmission

CMS Gas Transmission Company, a wholly owned subsidiary of CMS Enterprises

CMS Land

CMS Land Company, a wholly owned subsidiary of CMS Capital

CMS MST

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

Consumers

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

Consumers 2014 Securitization Funding

Consumers 2014 Securitization Funding LLC, a wholly owned consolidated bankruptcy-remote subsidiary of Consumers and special-purpose entity organized for the sole purpose of purchasing and owning securitization property, issuing securitization bonds, and pledging its interest in securitization property to a trustee to collateralize the securitization bonds

Craven

Craven County Wood Energy Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

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 Plan A

Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries, created as of December 31, 2017 for active employees who were covered under the defined benefit pension plan that closed in 2005

DB Pension Plan B

Defined benefit pension plan of CMS Energy and Consumers, including certain present and former affiliates and subsidiaries, amended as of December 31, 2017 to include only retired and former employees who were covered under the defined benefit pension plan that closed in 2005

DB Pension Plans

Defined benefit pension plans of CMS Energy and Consumers, comprising DB Pension Plan A and DB Pension Plan B

DB SERP

Defined Benefit Supplemental Executive Retirement Plan

DCCP

Defined Company Contribution Plan

DC SERP

Defined Contribution 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

Discount Window

Federal Reserve lending program to depository institutions

Dodd-Frank Act

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

DTE Electric

DTE Electric Company, a non‑affiliated company

EEI

Edison Electric Institute, an association representing all U.S. investor-owned electric companies

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

energy waste reduction

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

Entergy

Entergy Corporation, a non‑affiliated company

EPA

U.S. Environmental Protection Agency

EPS

Earnings per share

Exchange Act

Securities Exchange Act of 1934

FDIC

Federal Deposit Insurance Corporation

Federal Reserve

Federal Reserve System, the central bank of the U.S.

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

First Mortgage Bond Indenture

The indenture dated as of September 1, 1945 between Consumers and The Bank of New York Mellon, as Trustee, as amended and supplemented

FTR

Financial transmission right

GAAP

U.S. Generally Accepted Accounting Principles

GCC

Gas Customer Choice, which allows gas customers to purchase gas from alternative suppliers

GCR

Gas cost recovery

Genesee

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

Grayling

Grayling Generating Station Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

GWh

Gigawatt-hour, a unit of energy equal to one billion watt-hours

Internal Revenue Code

Internal Revenue Code of 1986, as amended

IRP

Integrated resource plan

IRS

Internal Revenue Service

Information Technology

Thousand volts, a unit used to measure the difference in electrical pressure along a current

kVA

Thousand volt-amperes, a unit used to reflect the electrical power capacity rating of equipment or a system

kWh

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

LIBOR

The London Interbank Offered Rate

Ludington

Ludington pumped-storage plant, jointly owned by Consumers and DTE Electric

MATS

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

mcf

Thousand cubic feet

MCV Facility

A 1,647 MW natural gas-fueled, combined-cycle cogeneration facility operated by the MCV Partnership

MCV Partnership

Midland Cogeneration Venture Limited Partnership

MCV PPA

PPA between Consumers and the MCV Partnership

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

MRV

Market-related value of plan assets

Megawatt, a unit of power equal to one million watts

MWh

Megawatt-hour, a unit of energy equal to one million watt-hours

NAAQS

National Ambient Air Quality Standards

NERC

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

NPDES

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

NREPA

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

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

Palisades

Palisades nuclear power plant, sold by Consumers to Entergy in 2007

PBO

Projected benefit obligation

PCB

Polychlorinated biphenyl

PFAS

Per- and polyfluoroalkyl substances

PHMSA

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

PISP

Performance Incentive Stock Plan

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

S&P

Standard & Poor's Financial Services LLC

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 IT system to manage the data and enable changes to key business processes

TCJA

Tax Cuts and Jobs Act of 2017

T.E.S. Filer City

T.E.S. Filer City Station Limited Partnership, a VIE in which HYDRA‑CO Enterprises, Inc., a wholly owned subsidiary of CMS Enterprises, has a 50-percent interest

USW

United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC

UWUA

Utility Workers Union of America, AFL-CIO

VEBA trust

Voluntary employees' beneficiary association trusts accounts established specifically to set aside employer-contributed assets to pay for future expenses of the OPEB Plan

VIE

Variable interest entity

Filing Format

This combined Form 10‑K is separately filed by CMS Energy and Consumers. Information in this combined Form 10‑K 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 or preferred stock and holders of such 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 or preferred stock. Similarly, neither Consumers nor any other subsidiary of CMS Energy has any obligation in respect of securities of CMS Energy.

Forward-Looking Statements and Information

This Form 10‑K 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
• 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; political and social unrest; general strikes; the government and/or paramilitary response to political or social events; and changes in trade policies or regulations
• 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
• 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 self-generation including distributed generation, or energy waste reduction and storage
• increased renewable energy demand due to customers seeking to meet their own sustainability goals

• 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, 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, gas transmission, gas and electric 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, civil unrest, 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 IT 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
• 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 the hypothetical liquidation at book value method of 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 Item 1A. Risk Factors; Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook; and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

Part I

Item 1. Business

General

CMS Energy

CMS Energy was formed as a corporation in Michigan in 1987 and 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 serves individuals and businesses operating in the alternative energy, automotive, chemical, food, and metal products industries, as well as a diversified group of other industries. 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 manages its businesses by the nature of services each provides, and operates principally in four business segments: electric utility; gas utility; enterprises, its non‑utility operations and investments; and EnerBank. Consumers' consolidated operations account for the substantial majority of CMS Energy's total assets, income, and operating revenue. CMS Energy's consolidated operating revenue was $6.7 billion in 2020, $6.8 billion in 2019, and $6.9 billion in 2018.

For further information about operating revenue, income, and assets and liabilities attributable to all of CMS Energy's business segments and operations, see Item 6. Selected Financial Data and Item 8. Financial Statements and Supplementary Data-CMS Energy Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

Consumers

Consumers has served Michigan customers since 1886. Consumers was incorporated in Maine in 1910 and became a Michigan corporation in 1968. Consumers owns and operates electric generation and distribution facilities and gas transmission, storage, and distribution facilities. It provides electricity and/ or natural gas to 6.8 million of Michigan's 10 million residents. Consumers' rates and certain other aspects of its business are subject to the jurisdiction of the MPSC and FERC, as well as to NERC reliability standards, as described in Item 1. Business-CMS Energy and Consumers Regulation.

Consumers' consolidated operating revenue was $6.2 billion in 2020, $6.4 billion in 2019, and $6.5 billion in 2018. For further information about operating revenue, income, and assets and liabilities attributable to Consumers' electric and gas utility operations, see Item 6. Selected Financial Data and Item 8. Financial Statements and Supplementary Data-Consumers Consolidated Financial Statements and Notes to the Consolidated Financial Statements.

Consumers owns its principal properties in fee, except that most electric lines and gas mains are located below or adjacent to public roads or on land owned by others and are accessed by Consumers through easements and other rights. Almost all of Consumers' properties are subject to the lien of its First Mortgage Bond Indenture. For additional information on Consumers' properties, see Item 1. Business- Business Segments-Consumers Electric Utility-Electric Utility Properties and Business Segments- Consumers Gas Utility-Gas Utility Properties.

In 2020, Consumers served 1.9 million electric customers and 1.8 million gas customers in Michigan's Lower Peninsula. Presented in the following map are Consumers' service territories:

Electric Service Territory

Gas Service Territory

Combination Electric and

Gas Service Territory

• Electric Generation Facilities

CMS Energy and Consumers - The Triple Bottom Line

For information regarding CMS Energy's and Consumers' purpose and impact on the "triple bottom line" of people, planet, and profit, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Executive Overview.

Business Segments

Consumers Electric Utility

Electric Utility Operations: Consumers' electric utility operations, which include the generation, purchase, distribution, and sale of electricity, generated operating revenue of $4.4 billion in 2020 and 2019, and $4.6 billion in 2018. Consumers' electric utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan's Lower Peninsula.

Presented in the following illustration is Consumers' 2020 electric utility operating revenue of $4.4 billion by customer class:

Other: 6%

Industrial: 13%

Commercial: 33%

Residential: 48%

Consumers' electric utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers' largest customers is not reasonably likely to have a material adverse effect on Consumers' financial condition.

In 2020, Consumers' electric deliveries were 35 billion kWh, which included ROA deliveries of three billion kWh, resulting in net bundled sales of 32 billion kWh. In 2019, Consumers' electric deliveries were 37 billion kWh, which included ROA deliveries of four billion kWh, resulting in net bundled sales of 33 billion kWh.

Consumers' electric utility operations are seasonal. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment.

Presented in the following illustration are Consumers' monthly weather-normalized electric deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including ROA deliveries, during 2020 and 2019:

4,000

TotalGWhperMonth

3,500 3,000 2,500 2,000 1,500 1,000

500

June

July

August

September

October

2019

2020

Consumers' 2020 summer peak demand was 8,215 MW, which included ROA demand of 540 MW. For the 2019-2020 winter season, Consumers' peak demand was 5,602 MW, which included ROA demand of 464 MW. As required by MISO reserve margin requirements, Consumers owns or controls, through long-term PPAs and short-term capacity purchases, all of the capacity required to supply its projected firm peak load and necessary reserve margin for summer 2021.

Electric Utility Properties: Consumers owns and operates electric generation and distribution facilities. For details about Consumers' electric generation facilities, see the Electric Utility Generation and Supply Mix section that follows this Electric Utility Properties section. Consumers' distribution system consists of:

• 205 miles of high-voltage distribution overhead lines operating at 138 kV
• 4 miles of high-voltage distribution underground lines operating at 138 kV
• 4,428 miles of high-voltage distribution overhead lines operating at 46 kV and 69 kV
• 19 miles of high-voltage distribution underground lines operating at 46 kV
• 77,833 miles of electric distribution overhead lines
• 9,264 miles of underground distribution lines
• 1,096 substations with an aggregate transformer capacity of 26 million kVA
• two battery facilities with storage capacity of 2 MW

Consumers is interconnected to the interstate high-voltage electric transmission system owned by METC and operated by MISO. Consumers is also interconnected to neighboring utilities and to other transmission systems.

Electric Utility Generation and Supply Mix: During 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040. This 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.

Presented in the following table are details about Consumers' 2020 electric generation and supply mix:

2020 GenerationName and Location (Michigan)Number of Units and Year Entered Service

Capacity 1

(MW)

2020 Electric Supply (GWh)

J.H. Campbell 1 & 2 - West Olive J.H. Campbell 3 - West Olive2 D.E. Karn 1 & 2 - Essexville3

2 Units, 1962-1967

540 1,538

1 Unit, 1980 2 Units, 1959-1961

460 1,618

Oil/Gas steam generation

D.E. Karn 3 & 4 - Essexville Hydroelectric

1,785 1,058

7,960

Conventional hydro generation - various locations

6 Units, 1973 35 Units, 1906-1949

975 76

(371) 5 482

Gas combined cycle

Jackson - Jackson Zeeland - Zeeland

1 Unit, 2002 3 Units, 2002

534 3,465

Gas combustion turbines

Zeeland (simple cycle) - Zeeland Wind generation

Lake Winds® Energy Park - Mason County

56 Turbines, 2012

16 273

1,017

Solar generation

Solar Gardens - Allendale and Kalamazoo Total owned generation

15,100 Panels, 2016

2 5,350

6 14,983

Purchased power6

Coal generation - T.E.S. Filer City Gas generation - MCV Facility7

1,240 6,110

Other gas generation - various locations Nuclear generation - Palisades7

813 6,898

Wind generation - various locations Solar generation - various locations

4 244

8 1,057

2,577 16,982

Total purchased and interchange power Total supply

2,577

19,637

Less distribution and transmission loss 2,810

Represents generation capacity during the summer months (planning year 2020 capacity as reported to MISO and limited by interconnection service limits), except for the Gratiot Farms Wind Project, which

Coal steam generation

785 4,804

2 Units, 1975-1977

Ludington - Ludington

1,051 111

547 1,786

1,081 5,251

2 Units, 2001

318 601

114 Turbines,

Cross Winds® Energy Park - Tuscola County

2014, 2018, and 2019

39 722

Gratiot Farms Wind Project - Gratiot County

60 Turbines, 2020

- 22

60 513

152 1,236

64 1,160

Other renewable generation - various locationsNet interchange power8

- 2,655

7,927 34,620

Total net bundled sales

31,810

began operation in December 2020. For wind and solar generation, the amount represents the effective load-carrying capability.

2	Represents Consumers' share of the capacity of the J.H. Campbell 3 unit, net of the 6.69-percent ownership
interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc.
3	Consumers plans to retire these coal-fueled generating units in 2023.
4	Represents Consumers' 51-percent share of the capacity of Ludington. DTE Electric holds the remaining
49-percent ownership interest.
5	Represents Consumers' share of net pumped-storage generation. The pumped-storage facility consumes
electricity to pump water during off-peak hours for storage in order to generate electricity later during
peak‑demand hours.
6	Represents purchases under long-term PPAs.
7	For information about Consumers' long-term PPAs related to the MCV Facility and Palisades, see Item 8.
Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4,
Contingencies and Commitments-Contractual Commitments.
8	Represents purchases from the MISO energy market.
20

Presented in the following table are the sources of Consumers' electric supply for the last three years:

GWh

Years Ended December 31	2020	2019	2018
Owned generation
Coal	7,960	9,776	9,804
Gas	5,883	6,289	5,272
Renewable energy	1,505	1,258	1,187
Oil	6	5	5
Net pumped storage1	(371)	(308)	(325)
Total owned generation	14,983	17,020	15,943
Purchased power2
Gas generation	7,346	6,812	6,712
Nuclear generation	6,898	6,946	6,749
Renewable energy generation	2,225	2,387	2,379
Coal generation	513	462	511
Net interchange power3	2,655	2,059	4,953
Total purchased and interchange power	19,637	18,666	21,304
Total supply	34,620	35,686	37,247

1	Represents Consumers' share of net pumped-storage generation. During 2020, the pumped-storage facility
consumed 1,369 GWh of electricity to pump water during off-peak hours for storage in order to generate
998 GWh of electricity later during peak-demand hours.
2	Represents purchases under long-term PPAs.
3	Represents purchases from the MISO energy market.

During 2020, Consumers acquired 57 percent of the electricity it provided to customers through long-term PPAs and the MISO energy market. Consumers offers its generation into the MISO energy market on a day-ahead and real-time basis and bids for power in the market to serve the demand of its customers. Consumers is a net purchaser of power and supplements its generation capability with purchases from the MISO energy market to meet its customers' needs during peak-demand periods.

At December 31, 2020, Consumers had future commitments to purchase capacity and energy under long-term PPAs with various generating plants. These contracts require monthly capacity payments based on the plants' availability or deliverability. The payments for 2021 through 2040 are estimated to total $9.0 billion and, for each of the next five years, range from $0.7 billion to $1.1 billion annually. These amounts may vary depending on plant availability and fuel costs. For further information about Consumers' future capacity and energy purchase obligations, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Capital Resources and Liquidity- Contractual Obligations and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, Contingencies and Commitments-Contractual Commitments.

During 2020, 23 percent of the energy Consumers provided to customers was generated by its coal-fueled generating units, which burned five million tons of coal and produced a combined total of 7,960 GWh of electricity. In order to obtain the coal it needs, Consumers enters into physical coal supply contracts.

At December 31, 2020, Consumers had future commitments to purchase coal through 2022; payment obligations under these contracts totaled $88 million. Most of Consumers' rail-supplied coal contracts have fixed prices, although some contain market-based pricing. Consumers' vessel-supplied coal contracts have fixed base prices that are adjusted monthly to reflect changes to the fuel cost of vessel transportation. At December 31, 2020, Consumers had 76 percent of its 2021 expected coal requirements under contract, as well as a 54-day supply of coal on hand.

In conjunction with its coal supply contracts, Consumers leases a fleet of railcars and has transportation contracts with various companies to provide rail and vessel services for delivery of purchased coal to Consumers' generating facilities. Consumers' coal transportation contracts are future commitments and expire on various dates through 2025; payment obligations under these contracts totaled $718 million at December 31, 2020.

During 2020, 17 percent of the energy Consumers provided to customers was generated by its natural gas‑fueled generating units, which burned 43 bcf of natural gas and produced a combined total of 5,883 GWh of electricity.

In order to obtain the gas it needs for electric generation fuel, Consumers' electric utility purchases gas from the market near the time of consumption, at prices that allow it to compete in the electric wholesale market. For units 3 & 4 of D.E. Karn and for the Jackson and Zeeland plants, Consumers utilizes an agent that owns firm transportation rights to each plant to purchase gas from the market and transport the gas to the facilities.

Electric Utility Competition: Consumers' electric utility business is subject to actual and potential competition from many sources, in both the wholesale and retail markets, as well as in electric generation, electric delivery, and retail services.

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 of Consumers' sales, with certain exceptions. At December 31, 2020, electric deliveries under the ROA program were at the ten‑percent limit. Of Consumers' 1.9 million electric customers, fewer than 300, or 0.02 percent, purchased electric generation service under the ROA program. For additional information, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook- Consumers Electric Utility Outlook and Uncertainties.

Consumers also faces competition or potential competition associated with industrial customers relocating all or a portion of their production capacity outside of Consumers' service territory for economic reasons; municipalities owning or operating competing electric delivery systems; and customer self-generation. Consumers addresses this competition in various ways, including:

• aggressively controlling operating, maintenance, and fuel costs and passing savings on to customers
• providing renewable energy options and energy waste reduction programs
• providing competitive rate-design options, particularly for large energy-intensive customers
• offering tariff-based incentives that support economic development
• monitoring activity in adjacent geographical areas

Consumers Gas Utility

Gas Utility Operations: Consumers' gas utility operations, which include the purchase, transmission, storage, distribution, and sale of natural gas, generated operating revenue of $1.8 billion in 2020, and $1.9 billion in 2019 and 2018. Consumers' gas utility customer base consists of a mix of primarily residential, commercial, and diversified industrial customers in Michigan's Lower Peninsula.

Presented in the following illustration is Consumers' 2020 gas utility operating revenue of $1.8 billion by customer class:

Other: 7%

Industrial: 4%

Commercial: 14%

GCC: 16%

Residential 59%

Consumers' gas utility operations are not dependent on a single customer, or even a few customers, and the loss of any one or even a few of Consumers' largest customers is not reasonably likely to have a material adverse effect on Consumers' financial condition.

In 2020, deliveries of natural gas through Consumers' pipeline and distribution network, including off-system transportation deliveries, totaled 360 bcf, which included GCC deliveries of 36 bcf. In 2019, deliveries of natural gas through Consumers' pipeline and distribution network, including off-system transportation deliveries, totaled 391 bcf, which included GCC deliveries of 41 bcf. Consumers' gas utility operations are seasonal. The consumption of natural gas typically increases in the winter, due primarily to colder temperatures and the resulting use of natural gas as heating fuel. Consumers injects natural gas into storage during the summer months for use during the winter months. During 2020, 43 percent of the natural gas supplied to all customers during the winter months was supplied from storage.

Presented in the following illustration are Consumers' monthly weather-normalized natural gas deliveries (deliveries adjusted to reflect normal weather conditions) to its customers, including GCC deliveries, during 2020 and 2019:

TotalbcfperMonth

June

July

August

September

October

2019

2020

Gas Utility Properties: Consumers' gas transmission, storage, and distribution system consists of:

• 2,410 miles of transmission lines
• 15 gas storage fields with a total storage capacity of 309 bcf and a working gas volume of 151 bcf
• 27,958 miles of distribution mains
• eight compressor stations with a total of 167,017 installed and available horsepower

In 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. 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 offset by purchasing and/or producing renewable natural gas.

Gas Utility Supply: In 2020, Consumers purchased 84 percent of the gas it delivered from U.S. suppliers. The remaining 16 percent was purchased from authorized GCC suppliers and delivered by Consumers to customers in the GCC program. Presented in the following illustration are the supply arrangements for the gas Consumers delivered to GCC and GCR customers during 2020:

GCC suppliers: 16%

GCR firm gas transportation contracts: 39%

GCR firm city-gate

contracts:

45%

Firm gas transportation or firm city-gate contracts are those that define a fixed amount, price, and delivery time frame. Consumers' firm gas transportation contracts are with Panhandle Eastern Pipe Line Company and Trunkline Gas Company, LLC, each a non‑affiliated company. Under these contracts, Consumers purchases and transports gas to Michigan for ultimate delivery to its customers. Consumers' firm gas transportation contracts expire on various dates through 2023 and provide for the delivery of 31 percent of Consumers' total gas supply requirements in 2021. Consumers purchases the balance of its required gas supply under firm city-gate contracts and through authorized suppliers under the GCC program.

Gas Utility Competition: Competition exists in various aspects of Consumers' gas utility business. Competition comes from GCC and from alternative fuels and energy sources, such as propane, oil, and electricity.

Enterprises Segment-Non-Utility Operations and Investments

CMS Energy's enterprises segment, through various subsidiaries and certain equity investments, is engaged in domestic independent power production, including the development and operation of renewable generation, and the marketing of independent power production. The enterprises segment's operating revenue was $229 million in 2020, $248 million in 2019, and $252 million in 2018.

Independent Power Production: Presented in the following table is information about the independent power plants in which CMS Energy had an ownership interest at December 31, 2020:

Ownership	2020 Net
Interest	Gross Capacity	1	Generation
Location	(%)	Primary Fuel Type	(MW)	(GWh)
Dearborn, Michigan	100	Natural gas	770	5,029
Gaylord, Michigan	100	Natural gas	134	4
Paulding County, Ohio	100	Wind	105	286
Comstock, Michigan	100	Natural gas	76	78
Delta Township, Michigan	100	Solar	24	42
Phillips, Wisconsin	100	Solar	3	5
Coke County, Texas2	51	Wind	525	537
Filer City, Michigan	50	Coal	73	510
New Bern, North Carolina	50	Wood waste	50	229
Flint, Michigan	50	Wood waste	40	91
Grayling, Michigan	50	Wood waste	38	66
Total	1,838	6,877

Represents the intended full-load sustained output of each plant. The amount of capacity relating to CMS Energy's ownership interest was 1,480 MW at December 31, 2020.

Began operation in September 2020.

The operating revenue from independent power production was $32 million in 2020 and 2019, and $19 million in 2018.

Energy Resource Management: CMS ERM purchases and sells energy commodities in support of CMS Energy's generating facilities with a focus on optimizing CMS Energy's independent power production portfolio. In 2020, CMS ERM marketed five bcf of natural gas and 7,080 GWh of electricity. Electricity marketed by CMS ERM was generated by independent power production of the enterprises segment and by unrelated third parties. CMS ERM's operating revenue was $197 million in 2020, $216 million in 2019, and $233 million in 2018.

Enterprises Segment Competition: The enterprises segment competes with other independent power producers. The needs of this market are driven by electric demand and the generation available.

EnerBank

EnerBank Operations: 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. EnerBank works with strategic business partners and contractors throughout the U.S. to provide homeowners with payment options for home improvements. Strategic business partners include manufacturers, distributors, franchisors, member or trade associations, and major retailers of home improvement, remodeling, and energy-saving products and services.

EnerBank's operating revenue was $262 million in 2020, $221 million in 2019, and $157 million in 2018. EnerBank's average loan size is $10,000 and all of the loans originated by EnerBank in 2020 were fixed-rate installment loans. The distribution of borrowers throughout the U.S. is generally consistent with the population distribution by state.

EnerBank Competition: EnerBank competes with FDIC-insured banks, credit unions, consumer finance companies, and financial technology companies. EnerBank addresses this competition by:

• offering competitive loan features and pricing
• maintaining a stable funding model
• providing convenient loan processes for contractors and homeowners
• providing strong marketing support for strategic business partners and authorized contractors
• focusing on customer service

CMS Energy and Consumers Regulation

CMS Energy, Consumers, and their subsidiaries are subject to regulation by various federal, state, and local governmental agencies, including those described in the following sections. If CMS Energy or Consumers failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material. For more information on the potential impacts of government regulation affecting CMS Energy and Consumers, see Item 1A. Risk Factors, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook, and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements- Note 3, Regulatory Matters.

FERC and NERC

FERC has exercised limited jurisdiction over several independent power plants and exempt wholesale generators in which CMS Enterprises has ownership interests, as well as over CMS ERM, CMS Gas Transmission, and DIG. FERC's jurisdiction includes, among other things, acquisitions, operations, disposals of certain assets and facilities, services provided and rates charged, and conduct among affiliates. FERC also has limited jurisdiction over holding company matters with respect to CMS Energy. FERC, in connection with NERC and with regional reliability organizations, also regulates generation and transmission owners and operators, load serving entities, purchase and sale entities, and others with regard to reliability of the bulk power system.

FERC regulates limited aspects of Consumers' gas business, principally compliance with FERC capacity release rules, shipping rules, the prohibition against certain buy/sell transactions, and the price-reporting rule.

FERC also regulates certain aspects of Consumers' electric operations, including compliance with FERC accounting rules, wholesale and transmission rates, operation of licensed hydroelectric generating plants, transfers of certain facilities, corporate mergers, and issuances of securities.

MPSC

Consumers is subject to the jurisdiction of the MPSC, which regulates public utilities in Michigan with respect to retail utility rates, accounting, utility services, certain facilities, certain asset transfers, corporate mergers, and other matters.

The Michigan Attorney General, ABATE, the MPSC Staff, and certain other parties typically participate in MPSC proceedings concerning Consumers. 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.

Rate Proceedings: For information regarding open rate proceedings, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters.

Other Regulation

The U.S. Secretary of Energy regulates imports and exports of natural gas and has delegated various aspects of this jurisdiction to FERC and the U.S. Department of Energy's Office of Fossil Fuels.

The U.S. Department of Transportation's Office of Pipeline Safety regulates the safety and security of gas pipelines through the Natural Gas Pipeline Safety Act of 1968 and subsequent laws.

EnerBank is regulated by the Utah Department of Financial Institutions and the FDIC.

CMS Energy and Consumers Environmental Strategy and Compliance

CMS Energy and Consumers are committed to protecting the environment; this commitment extends beyond compliance with applicable laws and regulations. In February 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040. This 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.

Consumers expects to reduce carbon emissions of its owned generation by more than 90 percent from its 2005 levels by 2040 through execution of its Clean Energy Plan, which calls for replacing its coal-fueled generation predominantly with investment in renewable energy. The remaining emissions will be offset through alternative measures including, but not limited to, carbon sequestration, landfill methane emission capture, and large-scale tree planting. During 2020, Consumers provided 11 percent of its electricity (self-generated and purchased) from renewable sources. Additionally, Consumers began operation of Gratiot Farms Wind Project, a 150-MW wind generation project, in December 2020 and expects to take full ownership and begin commercial operation of another with capacity of up to 166 MW in early 2021. Furthermore, Consumers has executed agreements to purchase another wind generation project under development, with capacity of up to 201 MW, and a solar generating facility under development, with capacity of up to 150 MW. For each of these projects, Consumers expects to take full ownership and begin commercial operation of the project in 2022.

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 2019, Consumers released its Methane Reduction Plan, which set a goal of net-zero methane emissions from its natural gas delivery system by 2030. 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 offset by purchasing and/or producing renewable natural gas.

CMS Energy, Consumers, and their subsidiaries are subject to various federal, state, and local environmental regulations for air and water quality, solid waste management, and other matters. Consumers expects to recover costs to comply with environmental regulations in customer rates, but cannot guarantee this result. For additional information concerning environmental matters, see Item 1A. Risk Factors, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook, and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, Contingencies and Commitments.

CMS Energy has recorded a $45 million liability for its subsidiaries' obligations associated with Bay Harbor and Consumers has recorded a $56 million liability for its obligations at a number of former MGP sites. For additional information, see Item 1A. Risk Factors and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, Contingencies and Commitments.

Solid Waste Disposal: Costs related to the construction, operation, corrective action, and closure of solid waste disposal facilities for coal ash are significant. Consumers' coal ash disposal areas are regulated under Michigan's solid waste rules and by the EPA's rules regulating CCRs. To address some of the requirements of these rules, Consumers has converted all of its fly ash handling systems to dry systems. In addition, Consumers' ash facilities have programs designed to protect the environment and are subject to quarterly EGLE inspections. Consumers' estimate of capital and cost of removal expenditures to comply with regulations relating to ash disposal is $156 million from 2021 through 2025.

Water: Consumers uses substantial amounts of water to operate and cool its electric generating plants and gas compression stations. Water discharge quality is regulated and administered by EGLE under the federal NPDES program. To comply with such regulation, Consumers' facilities have discharge monitoring programs. The EPA issued final regulations for wastewater discharges from electric generating plants in 2015 and amended them in 2017 and 2020. Consumers' estimate of capital expenditures to comply with these regulations as presently promulgated is $23 million from 2021 through 2025.

In 2014, the EPA finalized its cooling water intake rule for electric generating units, which requires Consumers to evaluate the biological impact of its cooling water intake systems and ensure that it is using the best technology available to minimize adverse environmental impacts. Consumers' estimate of capital expenditures to comply with these regulations is $38 million from 2021 through 2025.

Air: Consumers is subject to federal and state environmental regulations that require extensive reductions in nitrogen oxides, sulfur dioxides, particulate matter, and mercury emissions. To comply with these regulations, Consumers has invested in emissions control equipment at its electric generating plants. Consumers' estimate of ongoing capital expenditures to comply with these regulations is $43 million from 2021 through 2025.

Consumers' future costs to comply with solid waste disposal, water, and air environmental regulations may vary depending on future legislation, litigation, executive orders, treaties, or rulemaking.

For further information concerning estimated capital expenditures related to solid waste disposal, water, and air, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook-Consumers Electric Utility Outlook and Uncertainties-Electric Environmental Outlook.

Insurance

CMS Energy and its subsidiaries, including Consumers, maintain insurance coverage generally similar to comparable companies in the same lines of business. The insurance policies are subject to terms, conditions, limitations, and exclusions that might not fully compensate CMS Energy or Consumers for all losses. A portion of each loss is generally assumed by CMS Energy or Consumers in the form of deductibles and self-insured retentions that, in some cases, are substantial. As CMS Energy or Consumers renews its policies, it is possible that some of the present insurance coverage may not be renewed or obtainable on commercially reasonable terms due to restrictive insurance markets.

Human Capital

CMS Energy and Consumers employ a highly trained and skilled workforce comprised of union, non‑union, and seasonal employees, and also uses contractors. Presented in the following table are the number of employees and contractors of CMS Energy and Consumers:

December 31	2020	2019	2018
CMS Energy, including Consumers
Full-time employees	8,148	8,128	7,957
Seasonal employees1	603	594	603
Part-time employees	86	67	65
Contractors	508	509	656
Total workforce	9,345	9,298	9,281
Consumers
Full-time employees	7,617	7,642	7,504
Seasonal employees1	603	594	603
Part-time employees	10	17	14
Contractors	508	509	656
Total workforce	8,738	8,762	8,777

Consumers' seasonal workforce peaked at 603 employees during 2020, and 614 employees during 2019 and 2018. Seasonal employees work primarily during the construction season.

At December 31, 2020, unions represented 41 percent of CMS Energy's employees and 44 percent of Consumers' employees. The UWUA represents Consumers' operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. For information about CMS Energy's and Consumers' collective bargaining agreements, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook-Other Outlook and Uncertainties and Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 12, Retirement Benefits.

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. On an annual basis, CMS Energy and Consumers set various safety goals, with their primary measure being the number of recordable incidents. There were 101 recordable incidents in 2020 and 105 recordable incidents in 2019. The target for 2021 is no more than 81 recordable incidents. Over the last ten years, Consumers' OSHA recordable incident rate has decreased by over 53 percent and ranks in the first quartile of its EEI peer group.

In response to the COVID-19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health, safety, and well-being of their co-workers, customers, and communities.

CMS Energy and Consumers have aligned with safety and health guidelines from the CDC, OSHA, and the Michigan Department of Health and Human Services in order to protect their employees, customers, and contractors to ensure the continued delivery of critical energy services. For more information about CMS Energy's and Consumers' response to the COVID-19 pandemic, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Executive Overview.

Within the utility industry, there is strong competition for rare, high-demand talent, including those related to renewable energy generation, technology, and data analytics. In order to address this competition and to be able to meet its human capital needs, CMS Energy and Consumers provide compensation and benefits that are competitive with industry peers. Furthermore, the companies have developed a comprehensive talent strategy, the Talent Roadmap, to attract, develop, and retain highly skilled employees. The strategy focuses on three areas, which are summarized below.

• Cultivating a Purpose-Driven Culture: This goal is aimed at ensuring all co-workers understand how their work drives the companies' key strategic goals. The companies' progress toward a purpose-driven culture is measured through an engagement index and an empowerment index developed from data obtained through an annual employee engagement survey of union and non-union co-workers administered by a third party. For the year ended December 31, 2020, the employee engagement index score was 83 percent, which ranked in the first quartile of U.S. utilities. The employee empowerment index score, which measures the percentage of employees that feel the workplace promotes empowerment, was 63 percent. Each employee empowerment question was individually benchmarked and ranked in the second quartile of high-performing companies. The high-performing benchmark was created by the third party who administered the survey through a targeted sampling of working adults within the U.S. who work for firms with widely respected reputations. CMS Energy and Consumers have a goal to achieve a first-quartile score by 2024.
• Creating a Breakthrough Employee Experience: A breakthrough employee experience is one that instills pride and ownership in one's work. To measure progress toward a breakthrough employee experience, the companies measure employees' satisfaction with people processes, such as performance management and hiring and onboarding new employees. For the year ended December 31, 2020, the employee experience index was 52 percent; the companies have a goal to achieve a score of 80 percent within the next ten years.
• Building Skill Sets at Scale: With an overarching goal of ensuring employees have the right skills to succeed, the companies measure progress in this area through achievement of workforce planning and hiring milestones and through a first-time skill attainment index to evaluate the effectiveness of training. The companies develop skill sets in co-workers through a variety of means, including union apprenticeship programs and yearly trainings for newly required skills. In 2021, the companies will launch a full-scale development program for leaders to enable robust succession planning and improve employee engagement and empowerment.

This talent strategy allows CMS Energy and Consumers to shape employees' experience and enable leaders to coach and develop co-workers, source talent, and anticipate and adjust to changing skill sets in the business environment.

Diversity, Equity, and Inclusion

As a part of the companies' Talent Roadmap, CMS Energy and Consumers also employ a comprehensive diversity, equity, and inclusion strategy designed to embed diversity, equity, and inclusion into all aspects of their business. This is done through embedding standards for diversity, equity, and inclusion into all company processes and ensuring these standards are incorporated into all employee experiences. To measure their success, the companies utilize select questions in the annual engagement survey to create a diversity, equity, and inclusion index. For the year ended December 31, 2020, the diversity, equity, and inclusion index score was 76 percent; the companies have a goal to achieve a score of 78 percent in 2021.

Co-workers are also empowered to engage in employee resource groups and events that encourage candid conversations around diversity, equity, and inclusion. There are seven employee resource groups available to all co-workers; these groups are, by date of origin:

• the Women's Advisory Panel, contributing to the achievement of the corporate strategy by supporting the retention, development, and success of women
• the Minority Advisory Panel, promoting a culture of diversity and inclusion among all racial and ethnic minorities through education, leadership, development, and networking
• the Women's Engineering Network, connecting and empowering women in the science, technology, engineering, and mathematics fields, while building capabilities to support company objectives
• the Veteran's Advisory Panel, supporting former and active military personnel and assisting in recruiting and retaining veterans through career development
• GEN-ERGY, a multigenerational group designed to bridge the gap of learning, networking, and mentoring across the generations of the companies' workforce
• the Pride Alliance of Consumers Energy, promoting an inclusive environment that is safe, supportive, and respectful for lesbian, gay, bi-sexual, and transgender persons and allies
• capABLE, aimed at removing barriers and creating pathways to meaningful work for employees of all abilities

Information About CMS Energy's and Consumers' Executive Officers

Presented in the following table are the company positions held during the last five years for each of CMS Energy's and Consumers' executive officers as of February 1, 2021:

Name, Age, Position(s)	Period
Garrick J. Rochow (age 46)
CMS Energy
President, CEO, and Director	12/2020 - Present
Executive Vice President	1/2020 - 12/2020
Senior Vice President	7/2016 - 1/2020
Vice President	3/2015 - 7/2016
Consumers
President, CEO, and Director	12/2020 - Present
Executive Vice President	1/2020 - 12/2020
Senior Vice President	7/2016 - 1/2020
Vice President	10/2010 - 7/2016
CMS Enterprises
Chairman of the Board, CEO, and Director	12/2020 - Present
Rejji P. Hayes (age 46)1
CMS Energy
Executive Vice President and CFO	5/2017 - Present
Consumers
Executive Vice President and CFO	5/2017 - Present
CMS Enterprises
Executive Vice President, CFO, and Director	5/2017 - Present
EnerBank
Chairman of the Board and Director	10/2018 - Present
Jean-Francois Brossoit (age 53)2
CMS Energy
Senior Vice President	4/2017 - Present
Vice President	11/2016 - 4/2017
Consumers
Senior Vice President	4/2017 - Present
Vice President	11/2016 - 4/2017

Table of Contents
Name, Age, Position(s)	Period
Catherine A. Hendrian (age 52)
CMS Energy
Senior Vice President	4/2017 - Present
Vice President	3/2015 - 4/2017
Director of Human Resources	10/2012 - 3/2015
Consumers
Senior Vice President	4/2017 - Present
Vice President	3/2015 - 4/2017
Director of Human Resources	10/2012 - 3/2015
Brandon J. Hofmeister (age 44)
CMS Energy
Senior Vice President	7/2017 - Present
Consumers
Senior Vice President	7/2017 - Present
Vice President	7/2016 - 7/2017
Executive Director, Policy Research, Analysis, and Public Affairs	6/2015 - 7/2016
Executive Director, Policy Research and Analysis	9/2013 - 6/2015
CMS Enterprises
Senior Vice President	9/2017 - Present
Shaun M. Johnson (age 42)3
CMS Energy
Senior Vice President and General Counsel	5/2019 - Present
Vice President and Deputy General Counsel	4/2016 - 5/2019
Consumers
Senior Vice President and General Counsel	5/2019 - Present
Vice President and Deputy General Counsel	4/2016 - 5/2019
CMS Enterprises
Senior Vice President, General Counsel, and Director	4/2019 - Present
Vice President and General Counsel	10/2018 - 4/2019
EnerBank
Senior Vice President and General Counsel	8/2018 - 6/2020
Venkat Dhenuvakonda Rao (age 50)
CMS Energy
Senior Vice President	9/2016 - Present
Vice President and Treasurer	7/2012 - 9/2016
Consumers
Senior Vice President	9/2016 - Present
Vice President and Treasurer	7/2012 - 9/2016
CMS Enterprises
Director	11/2017 - Present
Senior Vice President	9/2016 - Present
Vice President and Treasurer	7/2012 - 9/2016
EnerBank
Chairman of the Board	9/2016 - 5/2017
Table of Contents
Name, Age, Position(s)	Period
Brian F. Rich (age 46)
CMS Energy
Senior Vice President and Chief Customer Officer	8/2019 - Present
Senior Vice President and Chief Information Officer	7/2016 - 8/2019
Vice President and Chief Information Officer	7/2014 - 7/2016
Consumers
Senior Vice President and Chief Customer Officer	8/2019 - Present
Senior Vice President and Chief Information Officer	7/2016 - 8/2019
Vice President and Chief Information Officer	7/2014 - 7/2016
LeeRoy Wells, Jr. (age 42)
CMS Energy
Senior Vice President	12/2020 - Present
Consumers
Senior Vice President	12/2020 - Present
Vice President	8/2017 - 12/2020
Executive Director, Electric Systems Operations and Maintenance	12/2015 - 8/2017
Glenn P. Barba (age 55)
CMS Energy
Vice President, Controller, and CAO	2/2003 - Present
Consumers
Vice President, Controller, and CAO	1/2003 - Present
CMS Enterprises
Vice President, Controller, and CAO	11/2007 - Present

Prior to joining CMS Energy and Consumers, Mr. Hayes was executive vice president and CFO for

ITC Holdings Corp., a non‑affiliated company, from May 2014 through November 2016. Mr. Hayes started with ITC Holdings Corp. in 2012 as vice president of finance and treasurer.

Prior to joining CMS Energy and Consumers, Mr. Brossoit was vice president of manufacturing operations for United Technologies Corp., a non‑affiliated company. Mr. Brossoit started with United Technologies Corp. in 2006.

Prior to joining CMS Energy and Consumers, Mr. Johnson was a partner with Dykema Gossett PLLC, a non‑affiliated company, from 2012 to 2016. Mr. Johnson started with Dykema Gossett PLLC in 2005.

There are no family relationships among executive officers and directors of CMS Energy or Consumers. The list of directors and their biographies will be included in CMS Energy's and Consumers' definitive proxy statement for their 2021 Annual Meetings of Shareholders to be held May 7, 2021. The term of office of each of the executive officers extends to the first meeting of each of the Boards of Directors of CMS Energy and Consumers after the next annual election of Directors of CMS Energy and Consumers (to be held on May 7, 2021).

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 incorporatedherein. CMS Energy's and Consumers' annual reports on Form 10‑K, quarterly reports on Form 10‑Q, current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Exchange Act are accessible free of charge on CMS Energy's website. These reports are available soon after they are electronically filed with the SEC. Also on CMS Energy's website are CMS Energy's and Consumers':

• Corporate Governance Principles
• Articles of Incorporation
• Bylaws
• Charters and Codes of Conduct (including the Charters of the Audit Committee, Compensation and Human Resources Committee, Finance Committee, and Governance, Sustainability and Public Responsibility Committee, as well as the Employee, Board of Directors, EnerBank, and Third Party Codes of Conduct)

CMS Energy will provide this information in print to any stockholder who requests it.

The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The address iswww.sec.gov.

Item 1A. Risk Factors

CMS Energy and Consumers are exposed to a variety of factors, often beyond their control, that are difficult to predict and that involve uncertainties that may materially adversely affect CMS Energy's or Consumers' business, liquidity, financial condition, or results of operations. Additional risks and uncertainties not presently known or that management believes to be immaterial may also adversely affect CMS Energy or Consumers. The risk factors described in the following sections, 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.

Investment/Financial Risks

CMS Energy depends on dividends from its subsidiaries to meet its debt service obligations.

Due to its holding company structure, CMS Energy depends on dividends from its subsidiaries to meet its debt service and other payment obligations. If sufficient dividends were not paid to CMS Energy by its subsidiaries, CMS Energy might not be able to generate the funds necessary to fulfill its payment obligations.

Consumers' ability to pay dividends or acquire its own stock from CMS Energy is limited by restrictions contained in Consumers' preferred stock provisions and potentially by other legal restrictions, such as certain terms in its articles of incorporation and FERC requirements.

CMS Energy has indebtedness that could limit its financial flexibility and its ability to meet its debt service obligations.

The level of CMS Energy's present and future indebtedness could have several important effects on its future operations, including, among others, that:

• a significant portion of CMS Energy's cash flow from operations could be dedicated to the payment of principal and interest on its indebtedness and would not be available for other purposes

• covenants contained in CMS Energy's existing debt arrangements, which require it to meet certain financial tests, could affect its flexibility in planning for, and reacting to, changes in its business
• CMS Energy's ability to obtain additional financing for working capital, capital expenditures, acquisitions, and general corporate and other purposes could become limited
• CMS Energy could be placed at a competitive disadvantage to its competitors that are less leveraged
• CMS Energy's vulnerability to adverse economic and industry conditions could increase
• CMS Energy's future credit ratings could fluctuate

CMS Energy's ability to meet its debt service obligations and to reduce its total indebtedness will depend on its future performance, which will be subject to general economic conditions, industry cycles, changes in laws or regulatory decisions, and financial, business, and other factors affecting its operations, many of which are beyond its control. CMS Energy cannot make assurances that its businesses will continue to generate sufficient cash flow from operations to service its indebtedness, which could require

CMS Energy to sell assets or obtain additional financing.

CMS Energy and Consumers have financing needs and could be unable to obtain bank financing or access the capital markets.

CMS Energy and Consumers rely on the capital markets, as well as on bank syndications, to meet their financial commitments and short-term liquidity needs not otherwise funded internally.

Disruptions in the capital and credit markets, or the inability to obtain required FERC authorization for issuances of securities including debt, could adversely affect CMS Energy's and Consumers' access to liquidity needed for their businesses. Any liquidity disruption could require CMS Energy and Consumers to take measures to conserve cash including, but not limited to, deferring capital expenditures, changing commodity purchasing strategies to avoid collateral-posting requirements, and reducing or eliminating future share repurchases, dividend payments, or other discretionary uses of cash.

Entering into new financings is subject in part to capital market receptivity to utility industry securities in general and to CMS Energy's and Consumers' securities in particular. CMS Energy and Consumers continue to explore financing opportunities to supplement their respective financial strategies. These potential opportunities include refinancing and/or issuing new debt, issuing CMS Energy preferred stock and/or common equity, or entering into commercial paper, bank financing, and leasing arrangements. CMS Energy and Consumers cannot guarantee the capital markets' acceptance of their securities. CMS Energy may also, from time to time, repurchase (either in open market transactions or through privately negotiated transactions), redeem, or otherwise retire its outstanding debt. Such activities, if any, will depend on prevailing market conditions, contractual restrictions, and other factors. The amounts involved may or may not be material.

Certain of CMS Energy's and Consumers' securities and those of their affiliates are rated by various credit rating agencies. A reduction or withdrawal of one or more of its credit ratings could have a material adverse impact on CMS Energy's or Consumers' ability to access capital on acceptable terms and maintain commodity lines of credit, could increase their cost of borrowing, and could cause CMS Energy or Consumers to reduce capital expenditures. If either or both were unable to maintain commodity lines of credit, CMS Energy or Consumers might have to post collateral or make prepayments to certain suppliers under existing contracts. Further, since Consumers provides dividends to CMS Energy, any adverse developments affecting Consumers that result in a lowering of its credit ratings could have an adverse effect on CMS Energy's credit ratings.

Market performance and other changes could decrease the value of employee benefit plan assets, which then could require substantial funding.

The performance of various markets affects the value of assets that are held in trust to satisfy future obligations under CMS Energy's and Consumers' pension and postretirement benefit plans. CMS Energy and Consumers have significant obligations under these plans and hold significant assets in these trusts. These assets are subject to market fluctuations and will yield uncertain returns, which could fall below CMS Energy's and Consumers' forecasted return rates. A decline in the market value of the assets or a change in the level of interest rates used to measure the required minimum funding levels could significantly increase the funding requirements of these obligations. Also, changes in demographics, including an increased number of retirements or changes in life expectancy assumptions, could significantly increase the funding requirements of the obligations related to the pension and postretirement benefit plans.

Industry/Regulatory Risks

Changes to ROA could have a material adverse effect on CMS Energy's and Consumers' businesses.

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 of Consumers' sales, with certain exceptions. The proportion of Consumers' electric deliveries under the ROA program and on the ROA waiting list is over ten percent. Consumers' rates are regulated by the MPSC, while alternative electric suppliers charge market-based rates, putting competitive pressure on Consumers' electric supply. If the ROA limit were increased or if electric generation service in Michigan were deregulated, it could have a material adverse effect on CMS Energy and Consumers.

CMS Energy and Consumers are subject to rate regulation, which could have an adverse effect on financial results.

CMS Energy and Consumers are subject to rate regulation. Consumers' electric and gas retail rates are set by the MPSC and cannot be changed without regulatory authorization. If rate regulators fail to provide adequate rate relief, it could have a material adverse effect on Consumers or Consumers' plans for making significant capital investments.

Orders of the MPSC could limit recovery of costs of providing service. These orders could also result in adverse regulatory treatment of other matters. For example, MPSC orders could prevent or curtail Consumers from shutting off non‑paying customers or could prevent or limit the implementation of a gas revenue mechanism.

FERC authorizes certain subsidiaries of CMS Energy to sell electricity at market-based rates. Failure of these subsidiaries to maintain this FERC authority could have a material adverse effect on CMS Energy's and Consumers' liquidity, financial condition, and results of operations. Transmission rates are also set by FERC.

The various risks associated with the MPSC and FERC regulation of CMS Energy's and Consumers' businesses, which include the risk of adverse decisions in any number of rate or regulatory proceedings before either agency, as well as judicial proceedings challenging any agency decisions, could have a material adverse effect on CMS Energy and Consumers.

Utility regulation, state or federal legislation, and compliance could have a material adverse effect on CMS Energy's and Consumers' businesses.

CMS Energy and Consumers are subject to, or affected by, extensive utility regulation and state and federal legislation. If it were determined that CMS Energy or Consumers failed to comply with applicable laws and regulations, they could become subject to fines, penalties, or disallowed costs, or be required to implement additional compliance, cleanup, or remediation programs, the cost of which could be material. CMS Energy and Consumers cannot predict the impact of new laws, rules, regulations, principles, or practices by federal or state agencies, or challenges or changes to present laws, rules, regulations, principles, or practices and the interpretation of any adoption or change. Furthermore, any state or federal legislation concerning CMS Energy's or Consumers' operations could also have a material adverse effect.

FERC, through NERC, oversees reliability of certain portions of the electric grid. CMS Energy and Consumers cannot predict the impact of FERC orders regarding electric system reliability.

Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could negatively impact CMS Energy and Consumers.

CMS Energy and Consumers are required to make judgments regarding the potential tax effects of various financial transactions and results of operations in order to estimate their obligations to taxing authorities. The tax obligations include income taxes, real estate taxes, sales and use taxes, employment-related taxes, and ongoing issues related to these tax matters. The judgments include determining reserves for potential adverse outcomes regarding tax positions that have been taken and may be subject to challenge by the IRS and/or other taxing authorities. Unfavorable settlements of any of the issues related to these reserves or other tax matters at CMS Energy or Consumers could have a material adverse effect. Additionally, changes in federal, state, or local tax rates or other changes in tax laws could have adverse impacts.

CMS Energy and its subsidiaries, including Consumers and EnerBank, must comply with the Dodd-Frank Act and its related regulations, which are subject to change and could involve material costs or affect operations.

Regulations that are intended to implement the Dodd-Frank Act have been and are still being adopted and modified by the appropriate agencies. The Dodd-Frank Act added a new Section 13 to the Bank Holding Company Act. Known, together with its implementing regulations, as the Volcker Rule, it generally restricts certain banking entities (such as EnerBank) and their subsidiaries or affiliates from engaging in proprietary trading activities and from owning equity in or sponsoring any private equity funds or hedge funds (or certain other private issuing entities). The activities of CMS Energy and its subsidiaries (including EnerBank) have not been and are not expected to be materially affected by the Volcker Rule; however, they are restricted from engaging in proprietary trading, investing in third‑party hedge or private equity funds (and certain other private issuing entities), and sponsoring these funds (and entities) in the future unless CMS Energy qualifies for an exemption from the rule. CMS Energy and its subsidiaries are also subject to certain ongoing compliance requirements pursuant to the regulations. CMS Energy cannot predict the full impact of the Volcker Rule, including any impact resulting from changes to implementing regulations, on CMS Energy's or EnerBank's operations or financial condition.

All companies that directly or indirectly control an FDIC-insured bank are required to serve as a source of financial strength for that institution. As a result, CMS Energy could be called upon by the FDIC to infuse additional capital into EnerBank to the extent that EnerBank fails to satisfy its capital requirements. In addition, CMS Energy is contractually required (i) to make cash capital contributions to EnerBank in the event that EnerBank does not maintain required minimum capital ratios and (ii) to provide EnerBankfinancial support, in an amount and duration as may be necessary for EnerBank to meet the cash needs of its depositors and other operations.

In addition, the Dodd-Frank Act provides for regulation by the Commodity Futures Trading Commission of certain commodity-related contracts. Although CMS Energy, Consumers, EnerBank, and certain subsidiaries of CMS Enterprises qualify for an end-user exception from mandatory clearing of commodity-related swaps, these regulations could affect the ability of these entities to participate in these markets and could add additional regulatory oversight over their contracting activities.

CMS Energy and Consumers could incur substantial costs to comply with environmental requirements.

CMS Energy and Consumers are subject to costly and stringent environmental regulations that will likely require additional significant capital expenditures for CCR disposal and storage, cooling water intake equipment, effluent treatment, and PCB remediation. In addition, regulatory action on PFAS at the state and/or federal level could cause CMS Energy and Consumers to further test and remediate some sites if PFAS is present at certain levels. Present and reasonably anticipated state and federal environmental statutes and regulations will continue to have a material effect on CMS Energy and Consumers.

CMS Energy and Consumers have interests in fossil-fuel-fired power plants and other types of power plants that produce greenhouse gases. Federal and state environmental laws and rules, as well as international accords and treaties, could require CMS Energy and Consumers to install additional equipment for emission controls, undertake heat-rate improvement projects, purchase carbon emissions allowances, curtail operations, invest in generating capacity with fewer carbon dioxide emissions, or take other significant steps to manage or lower the emission of greenhouse gases.

The following risks related to climate change, emissions, and environmental regulations could also have a material adverse impact on CMS Energy and Consumers:

• litigation originated by third parties against CMS Energy or Consumers due to CMS Energy's or Consumers' greenhouse gas or other emissions or CCR disposal and storage
• impairment of CMS Energy's or Consumers' reputation due to their greenhouse gas or other emissions and public perception of their response to potential environmental regulations, rules, and legislation
• extreme weather conditions, such as severe storms or flooding, that may affect customer demand, company operations, or assets

Consumers retired seven smaller coal-fueled electric generating units in 2016. Consumers may encounter environmental conditions that will need to be addressed in a timely fashion with state and federal environmental regulators as facilities and equipment on these sites are taken out of service.

Consumers expects to collect fully from its customers, through the ratemaking process, expenditures incurred to comply with environmental regulations, but cannot guarantee this outcome. If Consumers were unable to recover these expenditures from customers in rates, CMS Energy or Consumers could be required to seek significant additional financing to fund these expenditures.

For additional information regarding compliance with environmental regulations, see Item 1. Business- CMS Energy and Consumers Environmental Strategy and Compliance and Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Outlook-Consumers Electric Utility Outlook and Uncertainties and Consumers Gas Utility Outlook and Uncertainties.

CMS Energy's and Consumers' businesses could be affected adversely by any delay in meeting environmental requirements.

A delay or failure by CMS Energy or Consumers to obtain or maintain any necessary environmental permits or approvals to satisfy any applicable environmental regulatory requirements or install emission or pollution control equipment could:

• prevent the construction of new facilities
• prevent the continued operation and sale of energy from existing facilities
• prevent the suspension of operations at existing facilities
• prevent the modification of existing facilities
• result in significant additional costs

CMS Energy and Consumers expect to incur additional substantial costs related to remediation of legacy environmental sites.

Consumers expects to incur additional substantial costs related to the remediation of its former MGP sites and other response activity costs at a number of other sites under NREPA and CERCLA. Consumers believes these costs should be recoverable in rates, but cannot guarantee that outcome.

Business/Operations Risks

There are risks associated with Consumers' substantial capital investment program planned for the next ten years.

Consumers' planned investments include the construction or acquisition of electric generation, electric and gas infrastructure, conversions and expansions, environmental controls, electric grid modernization technology, and other electric and gas investments to upgrade delivery systems, as well as decommissioning of older facilities. The success of these capital investments depends on or could be affected by a variety of factors that include, but are not limited to:

• effective pre-acquisition evaluation of asset values, future operating costs, potential environmental and other liabilities, and other factors beyond Consumers' control
• effective cost and schedule management of new capital projects
• availability of qualified construction personnel
• changes in commodity and other prices
• governmental approvals and permitting
• operational performance
• changes in environmental, legislative, and regulatory requirements
• regulatory cost recovery

It is possible that adverse events associated with these factors could have a material adverse effect on Consumers.

CMS Energy and Consumers could be affected adversely by legacy litigation and retained liabilities.

The agreements that CMS Energy and Consumers enter into for the sale of assets customarily include provisions whereby they are required to:

• retain specified preexisting liabilities, such as for taxes, pensions, or environmental conditions
• indemnify the buyers against specified risks, including the inaccuracy of representations and warranties that CMS Energy and Consumers make
• make payments to the buyers depending on the outcome of post-closing adjustments, litigation, audits, or other reviews, including claims resulting from attempts by foreign or domestic governments to assess taxes on past operations or transactions

Many of these contingent liabilities can remain open for extended periods of time after the sales are closed. Depending on the extent to which the buyers might ultimately seek to enforce their rights under these contractual provisions, and the resolution of any disputes concerning them, there could be a material adverse effect on CMS Energy's or Consumers' liquidity, financial condition, and results of operations.

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.

Consumers is exposed to risks related to general economic conditions in its service territories.

Consumers' electric and gas utility businesses are affected by the economic conditions impacting the customers they serve. If the Michigan economy becomes sluggish or declines, Consumers could experience reduced demand for electricity or natural gas that could result in decreased earnings and cash flow. In addition, economic conditions in Consumers' service territory affect its collections of accounts receivable and levels of lost or stolen gas.

Consumers is exposed to changes in customer usage that could impact financial results.

Technology advances, government incentives and subsidies, and recent regulatory decisions could increase the cost effectiveness of customer-owned methods of producing electricity and managing energy use resulting in reduced load, cross subsidization, and increased costs.

Customers could also reduce their consumption through demand-side energy conservation and energy waste reduction programs.

CMS Energy's and Consumers' energy sales and operations are affected by seasonal factors and varying weather conditions from year to year.

CMS Energy's and Consumers' utility operations are seasonal. The consumption of electric energy typically increases in the summer months, due primarily to the use of air conditioners and other cooling equipment, while peak demand for natural gas typically occurs in the winter due to colder temperatures and the resulting use of natural gas as heating fuel. Accordingly, CMS Energy's and Consumers' overall results may fluctuate substantially on a seasonal basis. Mild temperatures during the summer cooling season and winter heating season as well as the impact of extreme weather events on Consumers' system could have a material adverse effect.

CMS Energy and Consumers are subject to information security risks, risks of unauthorized access to their systems, and technology failures.

In the regular course of business, CMS Energy and Consumers handle a range of sensitive confidential security and customer information. In addition, CMS Energy and Consumers operate in a highly regulated industry that requires the continued operation of sophisticated information and control technology systems and network infrastructure. Despite implementation of security measures, technology systems, including disaster recovery and backup systems, are vulnerable to failure, cyber crime, unauthorized access, and being disabled. These events could impact the reliability of electric generation and electric and gas delivery and also subject CMS Energy and Consumers to financial harm. Cyber crime, which includes the use of malware, computer viruses, and other means for disruption or unauthorized access against companies, including CMS Energy and Consumers, is increasing in frequency, scope, and potential impact. While CMS Energy and Consumers have not been subject to cyber crime incidents that have had a material impact on their operations to date, their security measures in place may be insufficient to prevent a major cyber incident in the future. If technology systems, including disaster recovery and backup systems, were to fail or be breached, CMS Energy and Consumers might not be able to fulfill critical business functions, and sensitive confidential and proprietary data could be compromised. In addition, because CMS Energy's and Consumers' generation, transmission, and distribution systems are part of an interconnected system, a disruption caused by a cyber incident at another utility, electric generator, system operator, or commodity supplier could also adversely affect CMS Energy or Consumers.

A variety of technological tools and systems, including both company-owned IT and technological services provided by outside parties, support critical functions. The failure of these technologies, including backup systems, or the inability of CMS Energy and Consumers to have these technologies supported, updated, expanded, or integrated into other technologies, could hinder their business operations. A breach or failure of technology, including disaster recovery or backup systems, could also have a negative impact on CMS Energy's banking subsidiary, EnerBank.

CMS Energy's and Consumers' businesses have liability risks.

Consumers' electric and gas delivery systems, power plants, gas infrastructure including storage facilities, wind energy or solar equipment, and energy products, and the independent power plants owned in whole or in part by CMS Energy could be involved in incidents, failures, or accidents that result in injury, loss of life, or property loss to customers, employees, or the public. Although CMS Energy and Consumers have insurance coverage for many potential incidents (subject to deductibles, limitations, and self-insurance amounts that could be material), depending upon the nature or severity of any incident, failure, or accident, CMS Energy or Consumers could suffer financial loss, reputational damage, and negative repercussions from regulatory agencies or other public authorities.

CMS Energy and Consumers are subject to risks that are beyond their control, including but not limited to natural disasters, civil unrest, terrorist attacks and related acts of war, cyber incidents, vandalism, and other catastrophic events.

Natural disasters, severe weather, wars, terrorist acts, civil unrest, vandalism, theft, cyber incidents, pandemics, and other catastrophic events could result in severe damage to CMS Energy's and Consumers' assets beyond what could be recovered through insurance policies (which are subject to deductibles and limits), could require CMS Energy and Consumers to incur significant upfront costs, and could severely disrupt operations, resulting in loss of service to customers. There is also a risk that regulators could, after the fact, conclude that Consumers' preparedness or response to such an event was inadequate and take adverse actions as a result.

Energy risk management strategies might not be effective in managing fuel and electricity pricing risks, which could result in unanticipated liabilities to CMS Energy and Consumers or increased volatility in their earnings.

CMS Energy and Consumers are exposed to changes in market prices for natural gas, coal, electric capacity, electric energy, emission allowances, gasoline, diesel fuel, and RECs. CMS Energy and Consumers manage commodity price risk using established policies and procedures, and they may use various contracts to manage this risk, including swaps, options, futures, and forward contracts. No assurance can be made that these strategies will be successful in managing CMS Energy's and Consumers' risk or that they will not result in net liabilities to CMS Energy or Consumers as a result of future volatility.

A substantial portion of Consumers' operating expenses for its electric generating plants and vehicle fleet consists of the costs of obtaining these commodities. The contracts associated with Consumers' fuel for electric generation and purchased power are executed in conjunction with the PSCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its positions in these commodities. If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.

Natural gas prices in particular have been historically volatile. Consumers routinely enters into contracts for natural gas to mitigate exposure to the risks of demand, market effects of weather, and changes in commodity prices associated with the gas distribution business. These contracts are executed in conjunction with the GCR mechanism, which is designed to allow Consumers to recover prudently incurred costs associated with its natural gas positions. If the MPSC determined that any of these contracts or related contracting policies were imprudent, recovery of these costs could be disallowed.

CMS Energy and Consumers do not always hedge any or all of the exposure of their operations from commodity price volatility. Furthermore, the ability to hedge exposure to commodity price volatility depends on liquid commodity markets. As a result, to the extent the commodity markets are illiquid, CMS Energy and Consumers might not be able to execute their risk management strategies, which could result in larger unhedged positions than preferred at a given time. To the extent that unhedged positions exist, fluctuating commodity prices could have a negative effect on CMS Energy and Consumers. Changes in laws that limit CMS Energy's and Consumers' ability to hedge could also have a negative effect on CMS Energy and Consumers.

Consumers might not be able to obtain an adequate supply of natural gas or coal, which could limit its ability to operate its electric generation facilities or serve its natural gas customers.

Consumers has natural gas and coal supply and transportation contracts in place for the natural gas and coal it requires for its electric generating capacity. Consumers also has interstate transportation and supply agreements in place to facilitate delivery of natural gas to its customers. Apart from the contractual and monetary remedies available to Consumers in the event of a counterparty's failure to perform under any of these contracts, there can be no assurances that the counterparties to these contracts will fulfill their obligations to provide natural gas or coal to Consumers. The counterparties under the agreements could experience financial or operational problems that inhibit their ability to fulfill their obligations to Consumers. In addition, counterparties under these contracts might not be required to supply natural gas or coal to Consumers under certain circumstances, such as in the event of a natural disaster or severe weather.

If Consumers were unable to obtain its supply requirements, it could be required to purchase natural gas or coal at higher prices or implement its natural gas curtailment program filed with the MPSC.

Unplanned outages or maintenance could be costly for CMS Energy or Consumers.

Unforeseen outages or maintenance of the electric and gas delivery systems, power plants, gas infrastructure including storage facilities and compression stations, wind energy or solar equipment, and energy products owned in whole or in part by CMS Energy or Consumers may be required for many reasons. When unplanned outages occur, CMS Energy and Consumers will not only incur unexpected maintenance expenses, but may also have to make spot market purchases of electric and gas commodities that may exceed CMS Energy's or Consumers' expected cost of generation or gas supply, be forced to curtail services, or retire a given asset if the cost or timing of the maintenance is not reasonable and prudent. Unplanned generator outages could reduce the capacity credit CMS Energy or Consumers receives from MISO and could cause CMS Energy or Consumers to incur additional capacity costs in future years.

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 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. This is an 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. 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. Additionally, EnerBank could experience slower lending growth, higher loan write-offs, and increased loan modifications.

CMS Energy and Consumers cannot predict how the COVID‑19 pandemic will impact CMS Energy and Consumers. 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.

General Risk Factors

CMS Energy and Consumers are exposed to counterparty risk.

Adverse economic conditions or financial difficulties experienced by counterparties with whom CMS Energy and Consumers do business could impair the ability of these counterparties to pay for CMS Energy's and Consumers' services and/or fulfill their contractual obligations, including performance and payment of damages. CMS Energy and Consumers depend on these counterparties to remit payments and perform contracted services in a timely fashion. Any delay or default in payment orperformance of contractual obligations could have a material adverse effect on CMS Energy and Consumers.

Volatility and disruptions in capital and credit markets could have a negative impact on CMS Energy's and Consumers' lenders, vendors, contractors, suppliers, customers, and other counterparties, causing them to fail to meet their obligations. Adverse economic conditions could also have a negative impact on the loan portfolio of CMS Energy's banking subsidiary, EnerBank.

CMS Energy and Consumers are exposed to significant reputational risks.

CMS Energy and Consumers could suffer negative impacts to their reputations as a result of operational incidents, violations of corporate policies, regulatory violations, inappropriate use of social media, or other events. Reputational damage could have a material adverse effect and could result in negative customer perception and increased regulatory oversight.

A work interruption or other union actions could adversely affect Consumers.

Unions represent 44 percent of Consumers' employees. Consumers' union agreements expire in 2025. If these employees were to engage in a strike, work stoppage, or other slowdown, Consumers could experience a significant disruption in its operations and higher ongoing labor costs.

Failure to attract and retain an appropriately qualified workforce could adversely impact CMS Energy's and Consumers' results of operations.

In some areas, competition for skilled employees is high and if CMS Energy and Consumers were unable to match skill sets to future needs, they could encounter operating challenges and increased costs. These challenges could include a lack of resources, loss of knowledge, and delays in skill development. Additionally, higher costs could result from the use of contractors to replace employees, loss of productivity, and safety incidents. Failing to train replacement employees adequately and to transfer internal knowledge and expertise could adversely affect CMS Energy's and Consumers' ability to manage and operate their businesses.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Descriptions of CMS Energy's and Consumers' properties are found in the following sections of Item 1.

Business, all of which are incorporated by reference in this Item 2:

• General-CMS Energy
• General-Consumers
• Business Segments-Consumers Electric Utility-Electric Utility Properties
• Business Segments-Consumers Gas Utility-Gas Utility Properties
• Business Segments-Enterprises Segment-Non-Utility Operations and Investments- Independent Power Production

Item 3. Legal Proceedings

For information regarding CMS Energy's and Consumers' significant pending administrative and judicial proceedings involving regulatory, operating, transactional, environmental, and other matters, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

CMS Energy, Consumers, and certain of their affiliates are also parties to routine lawsuits and administrative proceedings incidental to their businesses involving, for example, claims for personal injury and property damage, contractual matters, various taxes, and rates and licensing.

Item 4. Mine Safety Disclosures

Not applicable.

Part II

Item 5. Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

CMS Energy

CMS Energy's common stock is traded on the New York Stock Exchange under the symbol CMS. Market prices for CMS Energy's common stock and related security holder matters are contained in Item 6. Selected Financial Data, which is incorporated by reference herein. At January 15, 2021, the number of registered holders of CMS Energy's common stock totaled 28,083, based on the number of record holders.

For additional information regarding securities authorized for issuance under equity compensation plans, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 13, Stock-Based Compensation and Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. For additional information regarding dividends and dividend restrictions, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 5, Financings and Capitalization.

Comparison of Five-year Cumulative Total Return

2015

2016

2017

2018

2019

2020

CMS Energy

S&P 500 IndexDow Jones Utility Index

S&P 400 Utilities Index

Five-Year Cumulative Total ReturnCompany/Index CMS Energy S&P 500 Index

2015

2016

2017

2018

2019

2020

Dow Jones Utility Index S&P 400 Utilities Index

100 $ 100 100 100

119 $ 112 118 127

139 $ 136 134 141

151 $ 130 137 151

196 $ 195
171 203
174 177
173 149

These cumulative total returns assume reinvestments of dividends.

Consumers

Consumers' common stock is privately held by its parent, CMS Energy, and does not trade in the public market.

Issuer Repurchases of Equity Securities

Presented in the following table are CMS Energy's repurchases of equity securities for the three months ended December 31, 2020:

Period

October 31, 2020 November 1, 2020 to

November 30, 2020 December 1, 2020 to

235 63.92

December 31, 2020 Total

623 59.48

1,264

61.69

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

Unregistered Sales of Equity Securities

None.

October 1, 2020 to

406 $ 63.78

Total Number of	Maximum Number of
Shares Purchased as	Shares That May Yet Be
Total Number	Part of Publicly	Purchased Under Publicly
of Shares Average Price	Announced Plans or	Announced Plans or
Purchased1 Paid per Share	Programs	Programs
-	-
-	-
-	-
-	-

Item 6. Selected Financial Data

CMS Energy Corporation

2020	2019	2018	2017	2016
Operating revenue (in millions)	($)	6,680	6,845	6,873	6,583	6,399
Income from equity method investees (in millions)	($)	5	10	9	15	13
Net income (in millions)	($)	752	682	659	462	553
Income (loss) attributable to noncontrolling interests
(in millions)	($)	(3)	2	2	2	2
Net income available to common stockholders (in
millions)	($)	755	680	657	460	551
Average common shares outstanding (in millions)	285.0	283.0	282.2	280.0	277.9
Earnings per average common share
- Basic	($)	2.65	2.40	2.33	1.64	1.99
- Diluted	($)	2.64	2.39	2.32	1.64	1.98
Cash provided by operations (in millions)	($)	1,276	1,790	1,703	1,705	1,629
Capital expenditures, excluding assets placed under
finance lease (in millions)	($)	2,317	2,104	2,074	1,665	1,672
Total assets (in millions)	($)	29,666	26,837	24,529	23,050	21,622
Long-term debt, excluding current portion
(in millions)	($)	13,634	11,951	10,615	9,123	8,640
Non‑current portion of finance leases and other
financing (in millions)	($)	56	76	69	91	110
Cash dividends declared per common share	($)	1.63	1.53	1.43	1.33	1.24
Market price of common stock at year-end	($)	61.01	62.84	49.65	47.30	41.62
Book value per common share at year-end	($)	19.02	17.67	16.78	15.77	15.23
Total employees at year-end	8,837	8,789	8,625	7,952	7,800
Electric Utility Statistics
Sales (billions of kWh)	35	37	38	37	38
Customers (in thousands)	1,866	1,848	1,831	1,826	1,805
Average sales rate per kWh	(¢)	11.74	11.64	11.78	11.98	11.63
Gas Utility Statistics
Sales and transportation deliveries (bcf)	360	391	386	352	358
Customers (in thousands)1	1,804	1,793	1,784	1,776	1,772
Average sales rate per mcf	($)	7.60	7.44	7.44	7.51	7.31
50

Excludes off-system transportation customers.

Consumers Energy Company

2020	2019	2018	2017	2016
Operating revenue (in millions)	($)	6,189	6,376	6,464	6,222	6,064
Net income (in millions)	($)	816	743	705	632	616
Net income available to common stockholder (in
millions)	($)	814	741	703	630	614
Cash provided by operations (in millions)	($)	1,218	1,601	1,449	1,715	1,681
Capital expenditures, excluding assets placed under
finance lease (in millions)	($)	2,170	2,085	1,822	1,632	1,656
Total assets (in millions)	($)	25,399	23,699	22,025	21,099	19,946
Long-term debt, excluding current portion
(in millions)	($)	7,742	7,048	6,779	5,561	5,253
Non‑current portion of finance leases and other
financing (in millions)	($)	56	76	69	91	110
Total preferred stock (in millions)	($)	37	37	37	37	37
Number of preferred stockholders at year-end	922	968	1,017	1,056	1,095
Total employees at year-end	8,230	8,253	8,121	7,496	7,366
Electric Utility Statistics
Sales (billions of kWh)	35	37	38	37	38
Customers (in thousands)	1,866	1,848	1,831	1,826	1,805
Average sales rate per kWh	(¢)	11.74	11.64	11.78	11.98	11.63
Gas Utility Statistics
Sales and transportation deliveries (bcf)	360	391	386	352	358
Customers (in thousands)1	1,804	1,793	1,784	1,776	1,772
Average sales rate per mcf	($)	7.60	7.44	7.44	7.51	7.31
51

Excludes off-system transportation customers.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management's Discussion and Analysis of Financial Condition and Results of Operations 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, 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 primarily 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 and maintaining 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 additional external funding.

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 increase in deliveries to residential customers. It has also experienced increased 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 anorder 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 in Item 1A. Risk Factors and throughout this Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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 53 percent.

In response to the COVID-19 pandemic, CMS Energy and Consumers have issued a response plan that is focused on the health, safety, and well-being of their co-workers, customers, and communities.

CMS Energy and Consumers have aligned with safety and health guidelines from the CDC, OSHA, and the Michigan Department of Health and Human Services in order to 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
• worked with local health departments and hospital systems to begin administering vaccinations to essential front-line employees
• when necessary, sequestered employees with critical roles at generating plants, gas compression facilities, and electric control rooms
• implemented a 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 ten-day work remote period for employees who return from personal travel to heavily 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

In response to the pandemic, CMS Energy and Consumers initially suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers. CMS Energy and Consumers slowly began resuming shut-offs of service for non-payment in late July 2020 for commercial and industrial customers and in October 2020 for residential customers. CMS Energy and Consumers remain committed to assisting customers impacted by the pandemic. During 2020, Consumers provided $12 million to help Michigan residents and small businesses who had experienced difficulty paying their energy bill due to the pandemic. Additionally, in December 2020, Consumers donated another $3 million to agencies that provide energy bill assistance to low-income households.

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 a cost-efficient mix of renewable energy and energy waste reduction and demand response programs
• targeted infrastructure investment to reduce maintenance costs and improve reliability and safety
• supply chain optimization
• information and control system efficiencies
• employee and retiree health care cost sharing
• workforce productivity enhancements

In addition, Consumers' gas commodity costs declined by 66 percent from 2010 through 2020, 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 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 21 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 30 percent since 2012
• reduced landfill waste disposal by over 1.5 million tons since 1992
• reduced methane emissions by 17 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. Presented in the following illustration are Consumers' reductions in these emissions (Consumers began tracking mercury emissions in 2007):

SO2,NOx,andPMEmissions(Tons)

)sbL( snoissimE yrucreM

Sulfur Dioxide (SO2)

Nitrogen Oxide (NOx)

Mercury

Particulate Matter (PM)

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 and 2020 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 25 percent combined renewable energy and energy waste reduction through 2020
• 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. The Clean Energy Plan will also allow Consumers to achieve a breakthrough goal of at least 50 percent combined renewable energy and energy waste reduction by 2030.

In February 2020, Consumers announced a goal of achieving net-zero carbon emissions from its electric business by 2040. This 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. Consumers expects to reduce carbon emissions of its owned generation by more than 90 percent from its 2005 levels by 2040 through execution of its Clean Energy Plan. The remaining emissions will be offset through alternative measures including, but not limited to, carbon sequestration, landfill methane emission capture, and large-scale tree planting.

Presented in the following illustration is Consumers' 2020 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:

13%

22%

Renewables (nameplate capacity)

Coal

Gas

Pumped storage and battery

Oil and gas peaking plants

Nuclear

Energy waste reduction

The remaining emissions will be offset by purchasing and/or producing renewable natural gas.

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; since 2017, Consumers reduced its water usage by over 880 million gallons cumulatively
• to enhance, restore, or protect 5,000 acres of land; since 2017, Consumers enhanced, restored, or protected over 4,600 acres of land cumulatively
• to reduce the amount of waste taken to landfills by 35 percent; compared to 2017, Consumers reduced its waste to landfills by 54 percent in 2020

CMS Energy, through CMS Enterprises, continues to pursue further opportunities for the development of renewable generation projects. In July 2020, CMS Enterprises purchased an ownership interest in Aviator Wind, a 525-MW wind generation project in Coke County, Texas. The project was completed and became operational in September 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.

In 2020, CMS Energy's net income available to common stockholders was $755 million, and diluted EPS were $2.64. This compares with net income available to common stockholders of $680 million and diluted EPS of $2.39 in 2019. In 2020, the benefits from gas and electric rate increases and lower operating and maintenance expenses were offset partially by higher depreciation and property taxes reflecting higher capital spending, lower gas sales due primarily to unfavorable weather, and higher donations. 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 a decline in electric deliveries to commercial and industrial customers as a result of the COVID-19 pandemic. Over the next five years, Consumers expects weather-normalized electric and gas deliveries to remain stable relative to 2020. This outlook reflects the effects of energy waste reduction programs offset largely by modest growth in electric and gas demand.

Performance: Impacting the Triple Bottom Line

CMS Energy and Consumers remain committed to achieving world class performance while delivering hometown service and positively impacting the triple bottom line of people, planet, and profit. During 2020, CMS Energy and Consumers:

• realized over $100 million in cost reductions by leveraging the Consumers Energy Way and through other initiatives
• named a Chief Diversity Officer responsible for setting and monitoring the companies' diversity, equity, and inclusion strategy
• completed a 90-mile gas pipeline construction project to upgrade gas pipelines and infrastructure throughout three Michigan counties
• announced a new parental leave policy for employees, allowing six months of paid leave to mothers and four months of paid leave to a nonbirthing parent
• pledged to join five other energy companies in facilitating the construction of a Midwest electric vehicle charging network

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.

Presented in the following illustration are planned capital expenditures of $13.2 billion that Consumers expects to make from 2021 through 2025:

Other electric supply $0.8 billion

Clean generation $2.4 billion

Gas infrastructure

$5.3 billion

Electric distribution $4.7 billion

Of this amount, Consumers plans to spend $10.0 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, reduce energy waste on those systems, and facilitate its clean energy transition. The gas infrastructure projects comprise $5.3 billion to sustain deliverability, enhance pipeline integrity and safety, and reduce methane emissions. The electric distribution projects comprise $4.7 billion to strengthen circuits and substations, replace poles, and interconnect clean energy resources. Consumers also expects to spend $2.4 billion for new clean generation, which includes investments in wind, solar, and hydro electric generation resources, and $0.8 billion for other electric supply projects. 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 and a projected twelve-month period ending September 30, 2021. In May 2020, Consumers reduced its requested annual rate increase to $229 million. In September 2020, the MPSC approved a settlement agreement authorizing an annual rate increase of $144 million, based on a 9.9 percent authorized return on equity. As part of that agreement, Consumers agreed not to file a new gas rate case prior to December 2021. The MPSC also approved the continuation of a revenue decoupling mechanism, which annually reconciles 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 and a projected twelve-month period ending December 31, 2021. In July 2020, Consumers reduced its requested annual rate increase to $230 million. In December 2020, the MPSC approved an annual rate increase of $90 million, based on a 9.9 percent authorized return on equity. This increase reflects a $36 million refund to customers of regulatory tax liabilities associated with the remeasurement of Consumers' deferred income taxes as a result of the TCJA; excluding the impacts of this refund, the order resulted in a $126 million increase in annual rates. The order also approved the recovery of $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. Additionally, the order approved the method of recovering amounts earned under the financial compensation mechanism approved by the MPSC in Consumers' IRP. This mechanism allows Consumers to earn a return on payments made under PPAs approved by the MPSC after January 1, 2019.

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.

Results of Operations

CMS Energy Consolidated Results of Operations

In Millions, Except Per Share Amounts

Years Ended December 31

2020

Net Income Available to Common Stockholders Basic Earnings Per Average Common Share Diluted Earnings Per Average Common Share

2019 2018

$ $ $

755 2.65 2.64

$ $ $

680 2.40 2.39

$ 657
$ 2.33
$ 2.32

In Millions

Years Ended December 31 Electric utility

2020

2019

Change

2019

2018

Change

554 $

509 $

45 $

509 $

535 $ (26)

Gas utility Enterprises EnerBank

261

233

169 64

34 (1)

38 11

Corporate interest and other

(154)

(144)

(10)

(144)

(119) (25)

Net Income Available to Common

Stockholders

755

680

657

$ 23

Presented in the following table are specific after-tax changes to net income available to common stockholders for 2020 versus 2019:

In Millions

Year Ended December 31, 2019

$ 680

Consumers electric utility and gas utility Electric sales

$ 16

Gas sales (39)

Gas rate increase 105

Lower corporate and IT expenses 20

Lower service restoration costs 16

Higher depreciation and amortization (36)

Voluntary revenue refund2 (21)

Absence of 2019 gain on sale of electric transmission assets, net of voluntary gain

sharing (13)

$ 73

EnerBank 9

Year Ended December 31, 2020

$ 755

See Note 3, Regulatory Matters and Note 22, Asset Sale and Exit Activities.

See Note 3, Regulatory Matters.

For specific after-tax changes to net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations- Results of Operations-CMS Energy Consolidated Results of Operations, in theForm 10‑K for the fiscalyear ended December 31, 2019, filed February 6, 2020.

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 2020 versus 2019 (amounts are presented pre-tax, with the exception of income tax changes):

Reasons for the change

Electric rate increase, including return on higher renewable capital spending 19

Lower distribution, transmission, generation, and compression expenses 21

Lower OPEB expenses 19

Gain on sale of electric transmission assets in 2020, net of voluntary gain sharing1 10

Higher donations (22)

Higher property tax, reflecting higher capital spending (21)

Other (1)

Enterprises 3

Corporate interest and other (10)

In Millions

Year Ended December 31, 2019

509

Electric deliveries1 and rate increases

Higher sales due primarily to favorable weather and sales mix, offset partially by lowerdeliveries to commercial and industrial customers 24

Voluntary revenue refund2 (16)

Lower service restoration costs 21

Gain on sale of transmission assets in 2020, net of voluntary gain sharing3 14

Higher mutual insurance distribution 7

Absence of 2019 gain on sale of transmission assets, net of voluntary gain sharing (17)

Retention benefits related to D.E. Karn4 (10)

Lower maintenance and other operating expenses 13

Depreciation and amortization

Increased plant in service, reflecting higher capital spending General taxes

(26)

Higher property tax, reflecting higher capital spending Other income, net of expenses

(12)

Higher donations (19)

Interest charges Income taxes

(4) (4)

Higher production tax credits attributable primarily to Cross Winds® Energy Park 7

Lower other income taxes 12

Year Ended December 31, 2020

19 554

Deliveries to end-use customers were 35.4 billion kWh in 2020 and 36.8 billion kWh in 2019.

See Note 3, Regulatory Matters.

Reasons for the change

Rate increase, including return on higher renewable capital spending

$ 26

Higher energy waste reduction program revenues 19

Lower other revenues (6)

Maintenance and other operating expenses

Lower corporate and IT expenses 17

Lower distribution, transmission, and generation expenses 13

Higher energy waste reduction program costs (19)

Absence of favorable 2019 litigation settlement (8)

Voluntary separation plan expenses (6)

Lower OPEB expenses 13

Higher other income, net of expenses 2

Lower tax expense due primarily to research and development tax credits5 7

Higher electric utility pre-tax earnings (7)

3	See Note 3, Regulatory Matters and Note 22, Asset Sale and Exit Activities.
4	See Note 22, Asset Sale and Exit Activities.
5	See Note 14, Income Taxes.

For detailed changes to the electric utility's net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Consumers Electric Utility Results of Operations, in theForm 10‑K

for the fiscal year ended December 31, 2019, filed February 6, 2020.

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 2020 versus 2019 (amounts are presented pre-tax, with the exception of income tax changes):

In Millions

Year Ended December 31, 2019

233

Gas deliveries1 and rate increases Rate increase

$ 141

Lower sales due primarily to unfavorable weather (73)

Disallowance of incremental gas purchased during the Ray Compressor Station fire3 (7)

Higher other revenues 20

Maintenance and other operating expenses

Lower corporate and IT expenses 10

Voluntary separation plan expenses (4)

Increased plant in service, reflecting higher capital spending General taxes

(22)

Higher property tax, reflecting higher capital spending Lower other general taxes

(16)

(14)

Lower OPEB expenses 12

Lower other income, net of expenses (4)

Interest charges Income taxes

(3) (19)

Higher gas utility pre-tax earnings (7)

Higher other income taxes (1)

Year Ended December 31, 2020

(7) 261

Deliveries to end-use customers were 283 bcf in 2020 and 313 bcf in 2019.

See Note 3, Regulatory Matters.

Reasons for the change

Voluntary revenue refund2 (12)

Lower energy waste reduction program revenues (3)

Lower distribution, transmission, and compression expenses 15

Lower energy waste reduction program costs 3

Lower maintenance and other operating expenses 3

Depreciation and amortizationOther income, net of expenses

Higher donations (11)

Lower tax expense due primarily to research and development tax credits4 1

See Note 4, Contingencies and Commitments-Consumers Gas Utility Contingencies.

See Note 14, Income Taxes.

For detailed changes to the gas utility's net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Consumers Gas Utility Results of Operations, in theForm 10‑K forthe fiscal year ended December 31, 2019, filed February 6, 2020.

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 2020 versus 2019:

In Millions

Year Ended December 31, 2019	$	33
Reason for the change
Higher earnings due primarily to improved receivables management and DIG operations	$	11
Income tax benefit due to restoring previously sequestered alternative minimum tax
credits1	4
Absence of 2019 gain on sale of transmission equipment	(12)
Year Ended December 31, 2020	$	36

See Note 14, Income Taxes.

For detailed after-tax changes to the enterprises segment's net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Enterprises Results of Operations, in theForm 10‑K forthe fiscal year ended December 31, 2019, filed February 6, 2020.

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 2020 versus 2019:

In Millions

Year Ended December 31, 2019	$	49
Reason for the change
Higher earnings due primarily to growth in consumer lending	$	25
Implementation of new credit losses standard1	(16)
Year Ended December 31, 2020	$	58

See Note 2, New Accounting Standards.

For detailed after-tax changes to EnerBank's net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-EnerBank Results of Operations, in theForm 10‑K for the fiscal

year ended December 31, 2019, filed February 6, 2020.

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 2020 versus 2019:

In Millions

Year Ended December 31, 2019	$	(144)
Reasons for the change
Absence of 2019 accrual for legacy legal obligation	$	22
Income tax benefit due to restoring previously sequestered alternative minimum tax
credits1	5
Higher fixed charges due to higher debt	(16)
Loss on early extinguishment of debt	(12)
Absence of 2019 tax benefits recognized as a result of asset sales	(4)
Other	(5)
Year Ended December 31, 2020	$	(154)

See Note 14, Income Taxes.

For detailed after-tax changes to corporate interest and other's net income available to common stockholders for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Results of Operations-Corporate Interest and Other Results of

Operations, in theForm 10‑K for the fiscal year ended December 31, 2019, filed February 6, 2020.

Cash Position, Investing, and Financing

At December 31, 2020, CMS Energy had $185 million of consolidated cash and cash equivalents, which included $17 million of restricted cash and cash equivalents. At December 31, 2020, Consumers had $35 million of consolidated cash and cash equivalents, which included $15 million of restricted cash and cash equivalents.

Operating Activities

Presented in the following table are specific components of net cash provided by operating activities for 2020 versus 2019:

In Millions

CMS Energy, including Consumers Year Ended December 31, 2019

$ 1,790

Higher net income 70

Higher contributions to postretirement benefit plans, primarily to pension plans (702)

Favorable impact of changes in core working capital,2 due primarily to extended payment terms for vendors in 2020 and higher vendor payments in 2019, offset partially by lower customer receipts

due to lower electric and gas deliveries 50

Unfavorable impact of changes in other assets and liabilities, due primarily to higher property tax payments, a payment to settle litigation, and higher energy waste reduction spending in excess of collections, offset partially by the absence of 2019 refunds to customers related to the TCJA and

self-implemented electric rates (67)

Consumers

Reasons for the change

Non‑cash transactions1 194

Favorable impact of changes in core working capital,2 due primarily to extended payment terms for vendors in 2020 and higher vendor payments in 2019, offset partially by lower customer receipts

due to lower electric and gas deliveries 40

Unfavorable impact of changes in other assets and liabilities, due primarily to higher property tax payments and higher energy waste reduction spending in excess of collections, offset partially by lower income taxes payments to CMS Energy and the absence of 2019 refunds to customers

related to the TCJA and self-implemented electric rates (7)Year Ended December 31, 2020

$ 1,218

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

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

Reasons for the change

Non‑cash transactions1 135

Year Ended December 31, 2020

$ 1,276

Year Ended December 31, 2019

$ 1,601

Higher net income 73

Higher contributions to postretirement benefit plans, primarily to pension plans (683)

For specific components of net cash provided by operating activities for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Cash Position, Investing, and Financing-Operating Activities, in theForm 10‑K for the fiscal year endedDecember 31, 2019, filed February 6, 2020.

Investing Activities

Presented in the following table are specific components of net cash used in investing activities for 2020 versus 2019:

In Millions
CMS Energy, including Consumers
Year Ended December 31, 2019	$ (2,816)
Reasons for the change
Higher capital expenditures	(213)
Changes in EnerBank notes receivable, reflecting growth in consumer lending	(256)
Lower purchases of notes receivable by EnerBank	326
Higher proceeds from sale of EnerBank notes receivable in 2020	130
Lower proceeds from sale of transmission equipment in 20201	(39)
Other investing activities	1
Year Ended December 31, 2020	$ (2,867)
Consumers
Year Ended December 31, 2019	$ (2,137)
Reasons for the change
Higher capital expenditures	(85)
DB SERP investment in note receivable - related party	(5)
Lower proceeds from sale of transmission equipment in 20201	(19)
Year Ended December 31, 2020	$ (2,246)

See Note 22, Asset Sale and Exit Activities

For specific components of net cash used in investing activities for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Cash Position, Investing, and Financing-Investing Activities, in theForm 10‑K for the fiscal year ended

December 31, 2019, filed February 6, 2020.

Financing Activities

Presented in the following table are specific components of net cash provided by financing activities for 2020 versus 2019:

In Millions

CMS Energy, including Consumers

Year Ended December 31, 2019	$	1,008
Reasons for the change
Higher debt issuances	1,028
Higher debt retirements	(725)
Lower borrowings of certificates of deposit at EnerBank	(215)
Higher repayments under Consumers' commercial paper program	(83)
Higher issuances of common stock, primarily the settlement of equity forward sale contracts	241
Higher payments of dividends on common stock	(31)
Higher debt prepayment costs	(51)
Proceeds from the sale of membership interest in VIE to tax equity investor	417
Contribution from noncontrolling interest	31
Other financing activities	(1)
Year Ended December 31, 2020	$	1,619
Consumers
Year Ended December 31, 2019	$	508
Reasons for the change
Higher debt issuances	961
Higher debt retirements	(545)
Higher repayments under Consumers' commercial paper program	(83)
Borrowings from CMS Energy	307
Lower stockholder contribution from CMS Energy	(25)
Higher payments of dividends on common stock	(45)
Higher debt prepayment costs	(35)
Other financing activities, primarily higher debt issuance costs	(8)
Year Ended December 31, 2020

$ 1,035

For specific components of net cash provided by financing activities for 2019 versus 2018, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Cash Position, Investing, and Financing-Financing Activities, in theForm 10‑K for the fiscal year ended

December 31, 2019, filed February 6, 2020.

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

Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements- Note 5, Financings and Capitalization-Dividend Restrictions. For the year ended December 31, 2020, Consumers paid $637 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 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 additional external funding. For more information on CMS Energy's and Consumers' financing transactions, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 5, 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 debt covenants, business, results of operations, financial condition, capital investment program, liquidity, and cash flows.

CMS Energy will make a change in method of tax accounting in its 2020 tax return to take advantage of IRS tax guidance that allows certain costs to maintain, replace, or improve electric assets to be deducted as repairs for tax purposes. Under this guidance, the costs can be deducted immediately rather than capitalized and depreciated over a 20-year period. This change will allow CMS Energy to claim accelerated one-time federal tax deductions of approximately $975 million upon initial adoption, with favorable ongoing annual deductions thereafter, placing CMS Energy in a net operating loss carryforward position until 2023.

In 2020, CMS Energy entered into an equity offering program under which it may sell shares of its common stock having an aggregate sales price of up to $500 million in privately negotiated transactions, in "at the market" offerings, through forward sales transactions, or otherwise.

CMS Energy has entered into forward sales transactions under this program, which 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 orshares. 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 these forward sale contracts, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 5, Financings and Capitalization-Issuance of Common Stock.

At December 31, 2020, CMS Energy had $532 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 December 31, 2020, there were no commercial paper notes outstanding under this program. For additional details on CMS Energy's and Consumers' secured revolving credit facilities and commercial paper program, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 5, Financings and Capitalization.

Certain of CMS Energy's and Consumers' credit agreements contain covenants that require CMS Energy and Consumers to maintain certain financial ratios, as defined therein. At December 31, 2020, no default had occurred with respect to any financial covenants contained in CMS Energy's and Consumers' credit agreements. CMS Energy and Consumers were each in compliance with these covenants as of December 31, 2020, as presented in the following table:

Credit Agreement	Limit	Actual
CMS Energy, parent only
Debt to Capital1	< 0.70 to 1.0	0.58 to 1.0
Consumers
Debt to Capital2	< 0.65 to 1.0	0.49 to 1.0

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

Applies to Consumers' revolving credit agreements and letter of 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 2021 and beyond.

CMS Energy is also 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 December 31, 2020. In addition, EnerBank has access to contingent funding sources, including the Discount Window and a $50 million uncommitted federal funds line of credit. Each month, EnerBank pledges a subset of its eligible loans to the Federal Reserve to ensure a seamlessborrowing capability should the need arise. At December 31, 2020, there were no outstanding borrowings under EnerBank's contingent funding sources.

Contractual Obligations: Presented in the following table are CMS Energy's and Consumers' contractual obligations. The table excludes all amounts classified as current liabilities on CMS Energy's and Consumers' consolidated balance sheets, other than the current portion of long-term debt, leases, and other financing.

In Millions

Payments Due

Less Than One to ThreeDecember 31, 2020

TotalOne YearYearsThree to Five YearsMore Than Five Years

CMS Energy, including Consumers Long-term debt

15,272 $

1,486 $

1,748 $

1,493 $ 10,545

Interest payments on long-term debt Finance leases and other financing Operating leases

183

30 77

AROs

1,971

50 1,816

Deferred investment tax credit Environmental liabilities Long-term payables Purchase obligations

118

19 52

Other1

37 8,898 3,179

6 1,057 1,391

23 1,522 1,136

3 5

370 282

Total contractual obligations Consumers

$ $

Interest payments on long-term debt Finance leases and other financing Operating leases

6,677

281

559

522 5,315

2 27

Deferred investment tax credit Environmental liabilities Purchase obligations

115

10 90

PPAs

MCV PPA Palisades PPA Related-party PPAs2 Other PPAs

2,815 517 318 5,248

349 398 58 252

698 119 116

705 1,063

- 97

- 47

Total PPAs Other1

8,898 $ 2,605

1,057 $ 1,333

1,522 984

1,516 284

$ 4,803 4

Total contractual obligations

28,687

3,130

3,897

2,788

18,872

Long-term contracts for the purchase of commodities and related services, and construction and service agreements. The commodities and related services include natural gas and coal and associated transportation.

Long-term PPAs from certain affiliates of CMS Enterprises.

12,563

499

962

880 10,222

2 34

115

10 90

Total PPAs

1,516 4,803

42,388

4,540

5,549

4,373

$ 27,926

Long-term debt

8,197 $

364 $

682 $

363 $ 6,788

183

30 77

AROs

1,908

50 1,753

11 15

589 714 3,693

CMS Energy and Consumers also have recognized non‑current liabilities for which the timing of payments cannot be reasonably estimated. These items, which are excluded from the table above, include regulatory liabilities, deferred income taxes, workers' compensation liabilities, accrued liabilities under renewable energy programs, and other liabilities. Retirement benefits are also excluded from the table above. For details related to benefit payments, see Item 8. Financial Statements and Supplementary Data -Notes to the Consolidated Financial Statements-Note 12, Retirement Benefits.

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 December 31, 2020, these contracts have an aggregate sales price of $58 million, maturing through 2022. For additional details on the companies' indemnity and guarantee arrangements, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, Contingencies and Commitments-Guarantees. For additional details on letters of credit and CMS Energy's forward sales contracts, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 5, Financings and Capitalization.

Capital Expenditures: Over the next five years, Consumers expect to make substantial capital investments. Consumers may revise its forecasts of capital expenditures periodically due to a number of factors, including environmental regulations, business opportunities, market volatility, economic trends, and the ability to access capital. Presented in the following table are Consumers' estimated capital expenditures, including lease commitments, for 2021 through 2025:

In Billions

2021

2022

2023

2024

2025

Total

Consumers

Electric utility operations Gas utility operations Total Consumers

1.4 $ 1.1

1.8 $ 1.2

1.6 $ 1.1

1.5 $ 1.0

1.6 $ 7.9 0.9 5.3

2.5

3.0

2.7

2.5

$ 13.2

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; Item 1A. Risk Factors; Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements- Note 3, Regulatory Matters; and Note 4, Contingencies and Commitments.

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 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 provides the foundation for Consumers' goal to achieve net-zero carbon emissions from its electric business 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. Consumers is required to file a new IRP by June 2021.

Specifically, the Clean Energy Plan provides for:

• the retirement of the D.E. Karn 1 & 2 coal-fueled generating units, totaling 460 MW, in 2023
• the potential retirement of the J.H. Campbell 1 & 2 coal-fueled generating units, totaling 540 MW, in 2031 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.

As a result of the 2019 request for proposals, in December 2020, Consumers entered into a 25-year PPA under which it will purchase 140 MW of renewable capacity, energy, and RECs from a solar generating facility to be constructed in Calhoun County, Michigan. The facility is expected to be operational in 2022. Also, in January 2021, Consumers entered into an agreement to purchase a solar generating facility under development in Michigan, with capacity of up to 150 MW. Consumers expects to take full ownership and begin commercial operation of the project in 2022. Both of these agreements are 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 that the MPSC approved in February 2021. 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 and construction of a 150-MW wind generation project in Gratiot County, Michigan; the project became operational in December 2020
• purchase of a wind generation project under development, with capacity of up to 166 MW, in Hillsdale, Michigan; Consumers expects to take full ownership and begin commercial operation of the project in early 2021

In December 2020, Consumers entered into an agreement to purchase a wind generation project under development, with capacity of up to 201 MW, in Gratiot County, Michigan. Consumers expects to take full ownership and begin commercial operation of the project in 2022. The agreement is subject to MPSC approval.

The MPSC also approved the 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.

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 gradually eased restrictions. In October 2020, the Michigan Supreme Court issued an opinion that limits the governor's authority to issue executive orders relating to the COVID-19 pandemic. Subsequently, the Michigan Department of Health and Human Services issued emergency orders maintaining and then increasing restrictions on indoor gatherings. Most recent orders have resulted in stepped-up enforcement of remote work in lieu of in-person work when possible and restrictions on certain entertainment venues and indoor dining at restaurants. Presently, most businesses are now open at limited capacity and with safety measures in place.

During the period from April 1, 2020 through December 31, 2020, a period covering the majority of the pandemic to date, weather-normalized electric deliveries were approximately five percent lower than deliveries during the same period in 2019, due mainly to a decline in deliveries to commercial and industrial customers of approximately 13 percent. This decline, however, was offset partially by an increase of approximately seven percent in deliveries to residential customers. Consumers cannot predict the long-term impact of the COVID-19 pandemic.

In response to the pandemic, Consumers initially suspended shut-offs of service for non-payment and extended payment protection plans for low-income and senior customers. Consumers slowly began resuming shut-offs of service for non-payment in late July 2020 for commercial and industrial customers and in October 2020 for residential 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 next five years, Consumers expects weather-normalized electric deliveries to remain stable relative to 2020. 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 of Consumers' sales, with certain exceptions. At December 31, 2020, electric deliveries under the ROA program were at the ten‑percent limit. Of Consumers' 1.9 million electric customers, fewer than 300, or 0.02 percent, purchased electric generation service under the ROA program.

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. 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. In December 2020, the Michigan Court of Appeals issued a decision in response to the Michigan Supreme Court's procedural remand upholding the MPSC's procedure for determining capacity obligations of electric providers under the 2016 Energy Law. The Michigan Court of Appeals also held that the 2016 Energy Law's provision for the MPSC to implement a local clearing requirement does not constitute an unlawful delegation of the Michigan Legislature's authority.

In September 2020, ABATE and another intervenor filed a complaint against the MPSC in the U.S. District Court for the Eastern District of Michigan challenging the constitutionality of a local clearing requirement. The complaint requests the federal court to issue a permanent injunction prohibiting the MPSC from implementing a local clearing requirement on individual electric providers. In

December 2020, Consumers filed a motion to intervene and defend the local clearing requirement in that federal litigation; this motion was granted in January 2021.

Electric Rate Matters: Rate matters are critical to Consumers' electric utility business. For additional details on rate matters, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

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. In February 2021, the MPSC approved a settlement agreement that decreases depreciation expense by $9 million annually based on December 31, 2019 balances. The new depreciation rates will be reflected in rates determined in Consumers' next-filed electric rate case.

PSCR Plan: Consumers submitted its 2021 PSCR plan to the MPSC in September 2020 and, in accordance with its proposed plan, self-implemented the 2021 PSCR charge beginning in January 2021. In January 2021, Consumers filed an amendment to its plan with the MPSC and will self-implement a new 2021 PSCR charge beginning in May 2021.

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 $260 million from 2021 through 2025 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. In October 2020, in response to a court-ordered remand due to litigation, the EPA proposed a revised CSAPR rule to reflect updated emission reductions from electric generating units in 12 states, including Michigan. The EPA intends to finalize the rule by March 2021, and has made provisions for program implementation by May 2021, with continued emission reductions through 2024. Consumers is evaluating its emission compliance strategy for existing units based on the proposed number of allowances allocated to Michigan for 2021 through 2024.

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, in May 2020, the EPA finalized changes to the supporting analysis used to enact 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 emission limits in its renewable operating permits, which have 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. Additionally,the State of Michigan has convened industry workgroups to seek implementation and control strategy ideas for statewide compliance of the 2015 ozone standard. In August 2020, the EPA proposed to retain the 2015 NAAQS for ozone without revision, and finalized this regulatory decision in December 2020. 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 these rules in conjunction with other EPA and EGLE rulemakings, litigation, executive orders, treaties, 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 would require new coal-fueled generating units to meet a highly efficient steam cycle performance standard. If finalized, 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. However, the D.C. Circuit Court of Appeals vacated and remanded this rule to the EPA in January 2021. Consumers cannot evaluate the potential impact of the remand until the EPA acts and any additional appeals are extinguished.

In 2015, a group of 195 countries, including the U.S., finalized the Paris Agreement, which governs carbon dioxide reduction measures beginning in 2020. While the U.S. withdrew from the Paris Agreement, it has taken the necessary steps to rejoin the Paris Agreement in 2021. At this time, Consumers does not expect any adverse changes to its environmental strategy as a result of these events.

In September 2020, Michigan's Governor signed an executive order creating the Michigan Healthy Climate Plan, which outlines goals for Michigan to achieve economy-wide net-zero greenhouse gas emissions and to be carbon neutral by 2050. The executive order aims for a 28-percent reduction below 2005 levels of greenhouse gas emissions by 2025. Consumers has already surpassed the 28-percent reduction milestone for its owned electric generation and previously announced, in February 2020, a goalof achieving net-zero carbon emissions from its electric business by 2040. The order directs EGLE to develop and oversee an action plan for achieving these goals. In addition, the Governor established the Council on Climate Solutions, an advisory group of key stakeholders to be appointed by the Governor that will assist EGLE in implementing the plan. These goals are aspirational in nature and any changes in law or regulation to achieve these goals would need to be approved by Michigan Legislature or the relevant regulatory agency. The MPSC has requested comments from utilities and other stakeholders on how the Governor's goal should be incorporated into future IRP filings. 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.

Litigation, international treaties, executive orders, 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, where applicable, 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 seek to reduce 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 surface waters. The EPA published a final rule in October 2020, with an effective date of December 2020, revising the 2015 guidelines related to the discharge of certain wastewater streams from electric generating units. The rule also allows for extension of the compliance deadline from the end of 2023 to the end of 2025, upon approval by EGLE through the NPDES permitting process. Consumers does not expect any adverse changes to its environmental strategy as a result of these revisions to the rule.

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 Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, 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 $8 million of retention benefit costs in 2021; this expense will be deferred as a regulatory asset. In its order in Consumers' 2020 electric rate case, the MPSC approved deferred accounting treatment for these costs. For additional details on this program, see Note 22, Asset Sale and 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.

The impact of the COVID-19 pandemic on weather-normalized gas deliveries during 2020 was not material. 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 next five years, Consumers expects weather-normalized gas deliveries to remain stable relative to 2020. 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 Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

GCR Plan: Consumers submitted its 2021-2022 GCR plan to the MPSC in December 2020 and, in accordance with its proposed plan, expects to self-implement the 2021-2022 GCR charge beginning in April 2021.

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 Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, 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 2019, Consumers released its Methane Reduction Plan, which 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 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 offset by purchasing and/or producing renewable natural gas.

There is increasing interest at the federal, state, and local levels involving potential regulation of greenhouse gases or its sources. Such regulation, if adopted, may involve requirements to reduce methane emissions from Consumers' gas utility operations and carbon dioxide emissions from natural gas customer 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 25 percent combined renewable energy and energy waste reduction through 2020

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 maximum energy waste reduction incentive for 2021. Consumers cannot predict the ultimate financial impact of the pandemic on its 2021 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 1,480 MW of capacity, and to pursue opportunities for the development of renewable generation projects.

In July 2020, CMS Enterprises purchased an ownership interest in Aviator Wind, a 525-MW wind generation project in Coke County, Texas. The project was completed and became operational in September 2020. Of the project's 525-MW nameplate capacity, 420 MW has been committed under long-term PPAs. For additional details, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 21, Variable Interest Entities.

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
• indemnity and environmental remediation obligations at Bay Harbor, including an inability to renew an NPDES permit
• 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 Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, 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 $2.9 billion at December 31, 2020. The 12-month rolling average net default rate on loans held by EnerBank was 1.1 percent at December 31, 2020. For additional details regarding EnerBank's loan portfolio, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 8, Notes Receivable.

EnerBank's loan portfolio was funded primarily by certificates of deposit of $2.8 billion at

December 31, 2020. With its loan portfolio funded by certificates of deposit, EnerBank has not had to relyon 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 2021. Over the next five years, EnerBank expects lending growth of approximately seven percent annually. For additional details regarding EnerBank's capital and liquidity, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations-Capital Resources and Liquidity

In response to the COVID-19 pandemic, and consistent with FDIC guidance, EnerBank offered new payment accommodations for current qualifying 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 year ended December 31, 2020, CMS Energy and Consumers recorded an after-tax charge of $9 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 Contracts: The UWUA represents Consumers' operating, maintenance, construction, and customer contact center employees. The USW represents Zeeland plant employees. The UWUA and USW agreements expired and new agreements were ratified in 2020. The new agreements ratified in 2020 provide the following:

• three-percent pay increases to operating, maintenance, and construction employees and the same annual increase through 2024
• three-and-a-half-percent pay increases to customer contact center employees
• three-percent pay increases to Zeeland Plant employees and the same annual increase through 2024

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 Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 3, Regulatory Matters and Note 4, Contingencies and Commitments.

Critical Accounting Policies and Estimates

The following information is important to understand CMS Energy's and Consumers' results of operations and financial condition. For additional accounting policies, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 1, Significant Accounting Policies.

In the preparation of CMS Energy's and Consumers' consolidated financial statements, estimates and assumptions are used that may affect reported amounts and disclosures. CMS Energy and Consumers use accounting estimates for asset valuations, unbilled revenue, depreciation, amortization, financial and derivative instruments, employee benefits, stock-based compensation, the effects of regulation, indemnities, contingencies, and AROs. Actual results may differ from estimated results due to changes in the regulatory environment, regulatory decisions, lawsuits, competition, and other factors. CMS Energy and Consumers consider all relevant factors in making these assessments.

Accounting for the Effects of Industry Regulation: Because Consumers has regulated operations, it uses regulatory accounting to recognize the effects of the regulators' decisions on its financial statements. Consumers continually assesses whether future recovery of its regulatory assets is probable by considering communications and experience with its regulators and changes in the regulatory environment. If Consumers determined that recovery of a regulatory asset were not probable, Consumers would be required to write off the asset and immediately recognize the expense in earnings.

Contingencies: CMS Energy and Consumers make judgments regarding the future outcome of various matters that give rise to contingent liabilities. For such matters, they record liabilities when they are considered probable and reasonably estimable, based on all available information. In particular,

CMS Energy and Consumers are participating in various environmental remediation projects for which they have recorded liabilities. The recorded amounts represent estimates that may take into account such considerations as the number of sites, the anticipated scope, cost, and timing of remediation work, the available technology, applicable regulations, and the requirements of governmental authorities. For remediation projects in which the timing of estimated expenditures is considered reliably determinable, CMS Energy and Consumers record the liability at its net present value, using a discount rate equal to the interest rate on monetary assets that are essentially risk-free and have maturities comparable to that of the environmental liability. The amount recorded for any contingency may differ from actual costs incurred when the contingency is resolved. For additional details, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 4, Contingencies and Commitments.

Derivative Instruments: CMS Energy and Consumers account for certain contracts as derivative instruments. If a contract is a derivative and does not qualify for the normal purchases and sales exception, it is recorded on the consolidated balance sheets at its fair value. At CMS Energy, if the derivative is accounted for as a cash flow hedge, unrealized gains and losses from changes in the fair value of the derivative are recognized in AOCI and subsequently recognized in earnings when the hedged transactions impact earnings. If the derivative is accounted for as a fair value hedge, changes in the fair value of the derivative and changes in the fair value of the hedged item due to the hedged risk are recognized in earnings. For the FTRs at Consumers, changes in fair value are deferred as regulatory assets or liabilities.

The criteria used to determine if an instrument qualifies for derivative accounting or for an exception from derivative accounting are complex and often require judgment in application. Changes in business strategies or market conditions, as well as a requirement to apply different interpretations of the derivative accounting literature, could result in changes in accounting for a single contract or groups of contracts,which could have a material impact on CMS Energy's and Consumers' financial statements. For additional details on CMS Energy's and Consumers' derivatives and how the fair values of derivatives are determined, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 6, Fair Value Measurements.

Income Taxes: The amount of income taxes paid by CMS Energy is subject to ongoing audits by federal, state, and foreign tax authorities, which can result in proposed assessments. An estimate of the potential outcome of any uncertain tax issue is highly judgmental. CMS Energy believes adequate reserves have been provided for these exposures; however, future results may include favorable or unfavorable adjustments to the estimated tax liabilities in the period the assessments are made or resolved or when statutes of limitation on potential assessments expire. Additionally, CMS Energy's judgment as to the ability to recover its deferred tax assets may change. CMS Energy believes the valuation allowances related to its deferred tax assets are adequate, but future results may include favorable or unfavorable adjustments. As a result, CMS Energy's effective tax rate may fluctuate significantly over time. For additional details, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 14, Income Taxes.

Pension and OPEB: CMS Energy and Consumers provide retirement pension benefits to certain employees under non‑contributory DB Pension Plans, and they provide postretirement health and life benefits to qualifying retired employees under an OPEB Plan.

CMS Energy and Consumers record liabilities for pension and OPEB on their consolidated balance sheets at the present value of the future obligations, net of any plan assets. The calculation of the liabilities and associated expenses requires the expertise of actuaries, and requires many assumptions, including:

• life expectancies
• discount rates
• expected long-term rate of return on plan assets
• rate of compensation increases
• expected health care costs

A change in these assumptions could change significantly CMS Energy's and Consumers' recorded liabilities and associated expenses.

Presented in the following table are estimates of costs (credits) and cash contributions through 2023 for the DB Pension Plans and OPEB Plan. Actual future costs and contributions will depend on future investment performance, discount rates, and various factors related to the participants of the DB PensionPlans and OPEB Plan. CMS Energy and Consumers will, at a minimum, contribute to the plans as needed to comply with federal funding requirements.

In Millions

DB Pension Plans

OPEB Plan

Cost (Credit)

Contribution

Cost (Credit)

Contribution

CMS Energy, including Consumers 2021 2022 2023

17 $ 7

(8)

- - -

(113) $

(113) (107)

Consumers1 2021 2022 2023

19 $ 10

(5)

- - -

(105) $

(105)

(99)

- - - - - -

Consumers' pension and OPEB costs are recoverable through its general ratemaking process.

Lowering the expected long-term rate of return on the assets of the DB Pension Plans by 25 basis points would increase estimated pension cost for 2021 by $7 million for both CMS Energy and Consumers. Lowering the PBO discount rates by 25 basis points would increase estimated pension cost for 2021 by $5 million for both CMS Energy and Consumers.

Pension and OPEB plan assets are accounted for and disclosed at fair value. Fair value measurements incorporate assumptions that market participants would use in pricing an asset or liability, including assumptions about risk. Development of these assumptions may require judgment.

For additional details on postretirement benefits, including the fair value measurements for the assets of the DB Pension Plans and OPEB Plan, see Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-Note 12, Retirement Benefits.

Unbilled Revenues: 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. For additional information on unbilled revenues, see Item 8. Financial Statements and Supplementary Data- Notes to the Consolidated Financial Statements-Note 16, Revenue.

New Accounting Standards

There are no new accounting standards issued but not yet effective that are expected to have a material impact on CMS Energy's or Consumers' consolidated financial statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

CMS Energy and Consumers are exposed to market risks including, but not limited to, changes in interest rates, commodity prices, and investment security prices. They may enter into various risk management contracts to mitigate exposure to these risks, including swaps, options, futures, and forward contracts. CMS Energy and Consumers enter into these contracts using established policies and procedures, underthe direction of an executive oversight committee consisting of certain officers and a risk committee consisting of those and other officers and business managers.

The following risk sensitivities illustrate the potential loss in fair value, cash flows, or future earnings from financial instruments, assuming a hypothetical adverse change in market rates or prices of ten percent. Potential losses could exceed the amounts shown in the sensitivity analyses if changes in market rates or prices were to exceed ten percent.

Long-Term Debt: CMS Energy and Consumers are exposed to interest-rate risk resulting from issuing fixed-rate and variable-rate debt instruments. CMS Energy and Consumers use a combination of these instruments, and may also enter into interest-rate swap agreements, in order to manage this risk and to achieve a reasonable cost of capital.

Presented in the following table is a sensitivity analysis of interest-rate risk on CMS Energy's and Consumers' debt instruments, which includes the effects of interest-rate swaps (assuming an adverse change in market interest rates of ten percent):

In Millions

December 31

2020 2019

Fixed-rate financing-potential loss in fair value

CMS Energy, including Consumers Consumers

634 $ 558

372355

The fair value losses in the above table could be realized only if CMS Energy and Consumers transferred all of their fixed-rate financing to other creditors. The annual earnings exposure related to variable-rate financing was immaterial for both CMS Energy and Consumers at December 31, 2020 and 2019, assuming an adverse change in market interest rates of ten percent.

Notes Receivable: CMS Energy is exposed to interest-rate risk resulting from EnerBank's fixed-rate installment loans. EnerBank provides primarily unsecured, fixed-rate installment loans throughout the U.S. to finance home improvements.

Presented in the following table is a sensitivity analysis of interest-rate risk on EnerBank's notes receivable, which includes the effects of interest-rate swaps (assuming an adverse change in market interest rates of ten percent):

$ 61

The fair value losses for CMS Energy in the above table could be realized only if EnerBank's loans were sold to other parties. The annual earnings exposure related to variable-rate interest receipts at EnerBank was immaterial at December 31, 2020 and 2019. For additional details on financial instruments, see

Item 8. Financial Statements and Supplementary Data-Notes to the Consolidated Financial Statements-

Note 7, Financial Instruments.

In Millions
December 31	2020	2019
Notes receivable-potential loss in fair value	$	77

Item 8. Financial Statements and Supplementary Data

Index to Financial Statements

CMS Energy Consolidated Financial Statements ...............................................................................92

Consolidated Statements of Income ....................................................................................................92

Consolidated Statements of Comprehensive Income ..........................................................................93

Consolidated Statements of Cash Flows .............................................................................................94

Consolidated Balance Sheets .............................................................................................................. 96

Consolidated Statements of Changes in Equity .................................................................................. 98

Consumers Consolidated Financial Statements .................................................................................. 100

Consolidated Statements of Income .................................................................................................... 100

Consolidated Statements of Comprehensive Income .......................................................................... 101

Consolidated Statements of Cash Flows ............................................................................................. 102

Consolidated Balance Sheets .............................................................................................................. 104

Consolidated Statements of Changes in Equity .................................................................................. 106

Notes to the Consolidated Financial Statements ................................................................................. 107

Reports of Independent Registered Public Accounting Firm ..............................................................

CMS Energy ..................................................................................................................................... Consumers ........................................................................................................................................

1:	Significant Accounting Policies ..............................................................................................	107
2:	New Accounting Standards .....................................................................................................	110
3:	Regulatory Matters ..................................................................................................................	111
4:	Contingencies and Commitments ............................................................................................	117
5:	Financings and Capitalization .................................................................................................	124
6:	Fair Value Measurements ........................................................................................................	131
7:	Financial Instruments ..............................................................................................................	134
8:	Notes Receivable .....................................................................................................................	135
9:	Plant, Property, and Equipment ...............................................................................................	138
10:	Leases and Palisades Financing ..............................................................................................	142
11:	Asset Retirement Obligations ..................................................................................................	147
12:	Retirement Benefits .................................................................................................................	149
13:	Stock-Based Compensation .....................................................................................................	159
14:	Income Taxes ..........................................................................................................................	163
15:	Earnings Per Share-CMS Energy .........................................................................................	167
16:	Revenue ...................................................................................................................................	168
17:	Other Income and Other Expense ...........................................................................................	172
18:	Cash and Cash Equivalents .....................................................................................................	172
19:	Reportable Segments ...............................................................................................................	173
20:	Related-Party Transactions-Consumers ...............................................................................	177
21:	Variable Interest Entities .........................................................................................................	178
22:	Asset Sale and Exit Activities .................................................................................................	180
23:	Quarterly Financial and Common Stock Information (Unaudited) ........................................	181
182
182
186

CMS Energy Corporation

Consolidated Statements of Income

In Millions, Except Per Share Amounts

Years Ended December 31

2020

2019

2018

Fuel for electric generation Purchased and interchange power Purchased power - related parties Cost of gas sold

375

493 528

75 81

Maintenance and other operating expenses Depreciation and amortization

1,403

1,448 1,417

General taxes

359

333 303

Interest income

4 7 11

Allowance for equity funds used during construction Income from equity method investees

Nonoperating retirement benefits, net Other income

118

Other expense

(62)

(13) (48)

Interest Charges

Interest on long-term debt Interest expense - related parties Other interest expense

483

439 412

Total interest charges

561

519

458

Income Before Income Taxes Income Tax Expense

885

829

774

133

147

115

Income (Loss) Attributable to Noncontrolling Interests

(3)

2 2

Net Income Available to Common Stockholders

Basic Earnings Per Average Common Share Diluted Earnings Per Average Common Share

$ $

755

680

$ 657

2.65 $ 2.64

2.40 $ 2.33 2.39 2.32

The accompanying notes are an integral part of these statements.

Operating Revenue

6,680 $

6,845 $ 6,873

Operating Expenses

1,492

1,496 1,613

577

769 836

1,048

992 933

Total operating expenses

5,318

5,606 5,711

Operating Income

1,362

1,239 1,162

Other Income (Expense)

Interest income - related parties

Total other income

109 70

Allowance for borrowed funds used during construction

(2)

(4)

(3)

Net Income

752

682

659

CMS Energy Corporation

Consolidated Statements of Comprehensive Income

In Millions

Years Ended December 31

2020

2019 2018

Net loss arising during the period, net of tax of $(4), $(3), and $(1) Settlement arising during the period, net of tax of $- for all periods Prior service credit adjustment, net of tax of $- for all periods Amortization of net actuarial loss, net of tax of $1 for all periods Amortization of prior service credit, net of tax of $-, $-, and $(1)

(15)

(7) (4)

(1) - (1)

(1)

(2) (1)

Derivatives

Unrealized loss on derivative instruments, net of tax of $(2), $(1), and $- Reclassification adjustments included in net income, net of tax of $- for all periods

Other Comprehensive Loss

Comprehensive Income

2 (13) 739

(8) (4)

674 655

Comprehensive Income (Loss) Attributable to Noncontrolling Interests

(3)

2 2

Comprehensive Income Attributable to CMS Energy

742

672

$ 653

The accompanying notes are an integral part of these statements.

Net Income

752 $

682

$ 659

Retirement Benefits Liability

5 3 4

(4)

(3) (2)

CMS Energy Corporation

Consolidated Statements of Cash Flows

Years Ended December 31

2020

2019

In Millions 2018

Net income

752 $

682 $ 659

Depreciation and amortization

1,048

992 933

Deferred income taxes and investment tax credits Bad debt expense

67 54

Other non‑cash operating activities and reconciling adjustments Postretirement benefits contributions

(712)

(10) (252)

Accounts and notes receivable and accrued revenue Inventories

(12)

45 15

Accounts payable and accrued rate refunds

(69) 22

Net cash provided by operating activities

1,276

1,790 1,703

Cash Flows from Investing Activities

Capital expenditures (excludes assets placed under finance lease) Increase in EnerBank notes receivable

Purchase of notes receivable by EnerBank Proceeds from DB SERP investments

(657) (17)

(401) (307)
- - 146
Proceeds from sale of EnerBank notes receivable Proceeds from sale of transmission equipment Cost to retire property and other investing activities
197 58
67 97
Net cash used in investing activities
(2,867)
(2,816)
- - (146) (2,606)
Cash Flows from Financing Activities
Proceeds from issuance of debt Retirement of debt
3,179
(2,010)
2,151 (1,285)
2,767 (1,870)
Increase in EnerBank certificates of deposit Decrease in notes payable
(90)
(7) (73)
Issuance of common stock, net of issuance costs Payment of dividends on common and preferred stock Debt prepayment costs
(467)
(436) (407)
Proceeds from the sale of membership interest in VIE to tax equity investor Contribution from noncontrolling interest
417
31
- -
- -
Other financing costs
(51) (50) (61)
Cash and Cash Equivalents, Including Restricted Amounts, Beginning of
Period
28 157
175 204
Cash and Cash Equivalents, Including Restricted Amounts, End of
Period
$
185
$
157
$ 175
Cash Flows from Operating Activities
Adjustments to reconcile net income to net cash provided by operating activities
170
150 182
(22)
(58) 22
Cash provided by (used in) changes in assets and liabilities
28
44 14
Other current and non‑current assets and liabilities
(120)
(53) 54
(2,317)
(2,104) (2,074)
(343) (225)

(131) (132)

416

631 513

253

12 41

(59)

(8) (36)

Net cash provided by financing activities

1,619

1,008 874

Net Increase (Decrease) in Cash and Cash Equivalents, Including

Restricted Amounts

(18) (29)

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CMS Energy Corporation published this content on 15 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 March 2021 20:40:04 UTC.

Market Closed - Nyse Other stock markets 01:30:02 18/05/2024 am IST			5-day change	1st Jan Change
63.24 ^USD	+0.14%		+0.02%	+8.90%

14/05	BMO Capital Adjusts Price Target on CMS Energy to $71 From $68	MT
09/05	Argus Research Adjusts Price Target on CMS Energy to $70 From $68	MT

BMO Capital Adjusts Price Target on CMS Energy to $71 From $68	14/05	MT
Argus Research Adjusts Price Target on CMS Energy to $70 From $68	09/05	MT
Barclays Raises CMS Energy's Price Target to $59 From $57	29/04	MT
Wolfe Research Adjusts Price Target on CMS Energy to $64 From $62	26/04	MT
BMO Capital Adjusts Price Target on CMS Energy to $68 From $67	26/04	MT
Wells Fargo Adjusts CMS Energy Price Target to $66 From $64	26/04	MT
CMS Energy posts higher first-quarter profit helped by robust demand, lower costs	25/04	RE
CMS Energy's Q1 Adjusted Net Income Rises, Operating Revenue Falls; 2024 Non-GAAP Earnings Outlook Reaffirmed	25/04	MT
Transcript : CMS Energy Corporation, Q1 2024 Earnings Call, Apr 25, 2024	25/04
Earnings Flash (CMS) CMS ENERGY Reports Q1 Revenue $2.18B, vs. Street Est of $2.45B	25/04	MT
Earnings Flash (CMS) CMS ENERGY Posts Q1 EPS $0.97, vs. Street Est of $0.92	25/04	MT
CMS Energy Corporation Reports Earnings Results for the First Quarter Ended March 31, 2024	25/04	CI
CORRECTION : --Morgan Stanley Adjusts CMS Energy's Price Target to $57 From $56, Keeps Equalweight Rating	23/04	MT
Morgan Stanley Adjusts CMS Energy's Price Target to $30 From $29, Keeps Overweight Rating	23/04	MT
CMS Energy Keeps Quarterly Dividend at $0.515 Per Share, Payable May 31 to Shareholders of Record on May 15	23/04	MT
Cms Energy Corporation Declares Quarterly Dividend on Common Stock, Payable on May 31, 2024	22/04	CI
BMO Capital Adjusts CMS Energy Price Target to $67 From $64	22/04	MT
Scotiabank Adjusts CMS Energy's Price Target to $66 From $67	22/04	MT
KeyBanc Adjusts CMS Energy Price Target to $66 From $65	19/04	MT
BMO Capital Adjusts CMS Energy Price Target to $64 From $63	17/04	MT
Barclays Adjusts CMS Energy's Price Target to $57 From $58	12/04	MT
North American Morning Briefing : Investors on -2-	05/04	DJ
UBS Downgrades CMS Energy to Neutral From Buy, $65 Price Target	04/04	MT
Barclays Raises Price Target on CMS Energy to $58 From $57, Maintains Equalweight Rating	14/03	MT
JPMorgan Adjusts Price Target on CMS Energy to $66 From $65, Maintains Overweight Rating	13/03	MT

	1st Jan change	Capi.
CMS ENERGY CORPORATION	+8.90%	18.86B
ACWA POWER COMPANY	+79.19%	89.77B
ABU DHABI NATIONAL ENERGY COMPANY	-17.14%	88.77B
NATIONAL GRID PLC	+7.37%	53.87B
E.D.F.	-.--%	51.55B
SEMPRA	+4.56%	49.15B
ENGIE	-0.93%	41.53B
EON SE	+4.53%	38.04B
PUBLIC SERVICE ENTERPRISE GROUP, INC.	+21.91%	36.97B
RWE AG	-15.71%	28.61B

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